Chapter 6 Sales Knowledge
Sources of Sales Knowledge <ul><li>Formal Sales Training – An employer or company provides the opportunity for a salespers...
On Job Sales Experience <ul><li>Selling skill that is developed only through work experience.  </li></ul><ul><li>Sales kno...
On Job Sales Experience (2) <ul><li>Prerequisite Work Requirement: </li></ul><ul><ul><li>Some companies insist on their po...
Knowledge builds Relationship <ul><li>Salesperson must be knowledgeable to be effective in their job.  </li></ul><ul><li>S...
Why do salespeople have to acquire Sales Knowledge? (SK) <ul><ul><li>Knowledge increases confidence among salespeople. </l...
Know your customer <ul><li>Understand your customer – This is vital for the success of the business and increased sales. <...
Know your company <ul><li>To give a favorable image to your prospect : </li></ul><ul><ul><li>The salesperson must be knowl...
Product Knowledge (1) <ul><li>Knowledge about your company and your competitor is a major part of sales knowledge. </li></...
Product Knowledge (2) <ul><li>Product Knowledge includes: </li></ul><ul><li>Information on the product performance capabil...
Product Knowledge (3) <ul><li>Top companies engage: </li></ul><ul><ul><li>In providing their sales force with hands on exp...
Knowing your Resellers (1)  Middlemen/Wholesalers/Distributors ) <ul><li>Know your channel of distribution your company us...
Knowing your Resellers (2)  Middlemen/Wholesalers/Distributors ) <ul><li>Important information required by the producer : ...
Advertising Aids - Salesperson <ul><li>Personal selling, advertising, publicity and sales promotion are the ways of busine...
Advertising  <ul><li>What is Advertising ?  Advertising  Definition.  ...   ADVERTISING  is a paid form of communicating a...
How is advertising handled in a company? <ul><li>Advertising is handled by: </li></ul><ul><ul><li>In house advertising dep...
Types of Advertising(1) <ul><li>There are six basic types of advertising program campaigns:- </li></ul><ul><li>National Ad...
Types of Advertising(2) <ul><li>Retail Advertising  </li></ul><ul><ul><li>This is localized advertising which is confined ...
Types of Advertising(3) <ul><li>Cooperative Advertising </li></ul><ul><li>The cost of advertising is shared by the manufac...
Types of Advertising(4) <ul><li>Trade Advertising(B2B Advertising)  </li></ul><ul><li>Scope of business operation smaller ...
Industrial Advertising <ul><li>Advertising is focused on individuals and organization that purchase products used in manuf...
Direct mail Advertising  <ul><li>Advertising that is sent to the consumer or industrial users by post, door to door by dis...
Why do business engage in advertising? <ul><li>Business engage in advertising to : </li></ul><ul><li>Increase overall sale...
Sales Promotion <ul><li>What is Sales Promotion (SP)? </li></ul><ul><ul><li>Sales Promotion involves activities or materia...
Examples of Sales Promotional Techniques  <ul><li>Examples include:- </li></ul><ul><ul><li>Coupons </li></ul></ul><ul><ul>...
Consumer Sales Promotion Techniques   <ul><li>Price deal : A temporary reduction in the price, such as happy hour  </li></...
Trade Sales Promotion Techniques <ul><li>Trade allowances:  short term incentive offered to induce a retailer to stock up ...
Product Pricing (1)
Product Pricing (2) <ul><li>Price is an important element of a comprehensive marketing strategy for a product.  </li></ul>...
Questions - Pricing <ul><li>Pricing involves asking questions like: </li></ul><ul><li>How much to charge for a product or ...
What a Price should do? <ul><li>A well chosen price should do three things: </li></ul><ul><ul><li>Achieve the financial go...
Definition – Efficient & Effective Price <ul><li>Efficient Price – A price that is very close to the maximum that customer...
Types of Effective Pricing Techniques (1)  <ul><li>Price Lining – Use of a fixed or limited number of prices for all your ...
Types of Effective Pricing Techniques (2) <ul><li>Promotional Pricing – Pricing refers to an instances where pricing is th...
Types of Effective Pricing Techniques (3) <ul><li>Premium Pricing (Prestige Pricing) – The strategy of pricing at or near,...
Types of Effective Pricing Techniques (3) <ul><li>The term Goldilocks pricing is commonly used to describe the practice of...
Types of Effective Pricing Techniques (3) <ul><li>What is Demand based Pricing? </li></ul><ul><li>Demand-based pricing is ...
Business Environment(1)  <ul><li>Consumer Goods  </li></ul><ul><ul><li>successful salesperson understands their competitor...
Business Environment(2) <ul><li>Industrial Goods </li></ul><ul><ul><li>Salesperson selling industrial goods and the indust...
Overview of the Selling Process
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  1. 1. Chapter 6 Sales Knowledge
  2. 2. Sources of Sales Knowledge <ul><li>Formal Sales Training – An employer or company provides the opportunity for a salesperson to receive: </li></ul><ul><ul><li>Job related culture – induce or reform a trainee to be part of the organizational culture of the company. </li></ul></ul><ul><ul><li>Required job skills </li></ul></ul><ul><ul><li>Suitable knowledge </li></ul></ul><ul><ul><li>Right work attitude </li></ul></ul><ul><ul><li>Prepared for any change </li></ul></ul><ul><li>All this factors lead to improved performance in the selling environment. </li></ul>
  3. 3. On Job Sales Experience <ul><li>Selling skill that is developed only through work experience. </li></ul><ul><li>Sales knowledge is obtained from: </li></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Reading </li></ul></ul><ul><ul><li>Formal Training </li></ul></ul><ul><ul><li>Verbal promotion </li></ul></ul><ul><li>But is nothing compared to on the job sales experience the salesperson has. </li></ul>
  4. 4. On Job Sales Experience (2) <ul><li>Prerequisite Work Requirement: </li></ul><ul><ul><li>Some companies insist on their potential employees meet certain standard or have prior working experience. </li></ul></ul><ul><ul><li>Actual work experience gives a person direct feedback on how to manage in a specific selling situation. </li></ul></ul><ul><ul><li>Sales Knowledge gained through sales training and actual work experience benefits the: </li></ul></ul><ul><ul><ul><li>Salesperson </li></ul></ul></ul><ul><ul><ul><li>The Company and its business </li></ul></ul></ul><ul><ul><ul><li>Most of all the customers </li></ul></ul></ul>Relationship Gap
  5. 5. Knowledge builds Relationship <ul><li>Salesperson must be knowledgeable to be effective in their job. </li></ul><ul><li>Selling Knowledge (SK) helps to: </li></ul><ul><ul><li>Increase the salesperson’s confidence </li></ul></ul><ul><ul><li>Helps to forge trust between buyer and salesperson </li></ul></ul><ul><ul><li>Helps to build long term relationship. </li></ul></ul>
  6. 6. Why do salespeople have to acquire Sales Knowledge? (SK) <ul><ul><li>Knowledge increases confidence among salespeople. </li></ul></ul><ul><ul><li>Salesperson confidence increases from the buyer if the salesperson knows both about the business and the product as well. </li></ul></ul><ul><ul><li>The salesperson must gain the confidence of the prospect – the sales presentation be comes more acceptable and believable by the prospect. </li></ul></ul><ul><ul><li>Relationship increases sales – Relationship starts to develop, knowledge in turn brings in increases sales, revenue and good relationship with the seller or salesperson. </li></ul></ul>
  7. 7. Know your customer <ul><li>Understand your customer – This is vital for the success of the business and increased sales. </li></ul><ul><li>Business to Business (B2B) selling also requires asking questions and getting to know the customer better through relationship building. </li></ul>
  8. 8. Know your company <ul><li>To give a favorable image to your prospect : </li></ul><ul><ul><li>The salesperson must be knowledgeable in all aspects of the company and its range of products. </li></ul></ul><ul><ul><li>Company Information includes:- </li></ul></ul><ul><ul><ul><li>The company history </li></ul></ul></ul><ul><ul><ul><li>Policies and procedures, </li></ul></ul></ul><ul><ul><ul><li>Distribution systems, </li></ul></ul></ul><ul><ul><ul><li>Promotional activities </li></ul></ul></ul><ul><ul><ul><li>Pricing practices </li></ul></ul></ul><ul><ul><ul><li>Technology used </li></ul></ul></ul><ul><ul><li>N.B. Knowledge required may vary from company to company and on the complexity of the business operation. </li></ul></ul>
  9. 9. Product Knowledge (1) <ul><li>Knowledge about your company and your competitor is a major part of sales knowledge. </li></ul><ul><li>Become an expert in company’s products. </li></ul><ul><li>Understand how they are manufactured. </li></ul><ul><li>Do your products meet your customer expectation. </li></ul>
  10. 10. Product Knowledge (2) <ul><li>Product Knowledge includes: </li></ul><ul><li>Information on the product performance capability. </li></ul><ul><li>Physical size and characteristics </li></ul><ul><li>Product operation – ease of operation. </li></ul><ul><li>FAB – Features, Advantages and Benefits </li></ul><ul><li>Product Marketability. </li></ul>
  11. 11. Product Knowledge (3) <ul><li>Top companies engage: </li></ul><ul><ul><li>In providing their sales force with hands on experience – giving real life knowledge for future selling. </li></ul></ul><ul><ul><li>Company advertising programs, price discount, promotional allowances, sales strategies and competitor analysis. </li></ul></ul><ul><ul><li>Company Meetings – Most of the time is spent on product information, marketing outcomes strategies, sales revenue evaluation etc. </li></ul></ul>
  12. 12. Knowing your Resellers (1) Middlemen/Wholesalers/Distributors ) <ul><li>Know your channel of distribution your company uses to transport products to the final consumer. </li></ul><ul><li>Knowledge of various operation of each channel member is important for the overall success of the company’s operation and distribution. </li></ul><ul><li>Wholesalers are bulk stockist of products and use the service of various salesperson to reach retailers and small dealers in the country. </li></ul><ul><li>The advent of online B2C E-Commerce and B2B E-Business portals has cut off the middlemen, wholesalers and dealers and gone direct to final consumer, and the various players in the supply chain system. </li></ul><ul><li>Direct Sales, direct marketing and e-procurement system approach are used in Airline Industry, Computer Supply Industry, MNC Components Supply Chain system etc. </li></ul>Business to Consumer (B2C) Business to Business (B2B
  13. 13. Knowing your Resellers (2) Middlemen/Wholesalers/Distributors ) <ul><li>Important information required by the producer : </li></ul><ul><ul><li>Likes & dislikes of each channel suppliers’ customers </li></ul></ul><ul><ul><li>Product line and various assortment available. </li></ul></ul><ul><ul><li>Time, appointment via online system to see salesperson </li></ul></ul><ul><ul><li>Distribution, promotion and pricing policies. </li></ul></ul><ul><ul><li>Past Record of the various channel members showing purchasing track movement. </li></ul></ul>
  14. 14. Advertising Aids - Salesperson <ul><li>Personal selling, advertising, publicity and sales promotion are the ways of business’s promotional efforts. </li></ul><ul><li>Senior marketing manager may resort to a selective approach or combination of any promotional efforts to launch their product or marketing strategy. </li></ul><ul><li>The successful salesperson must know the company’s advertising and sales promotion activities. </li></ul><ul><li>By providing enriched information your sales presentation will be more effective in gaining or closing the sales with the prospect or customer. </li></ul>
  15. 15. Advertising <ul><li>What is Advertising ? Advertising Definition. ... ADVERTISING is a paid form of communicating a message by the use of various media. It is persuasive, informative, and designed to influence purchasing behavior or thought patterns of individual consumer or consumer groups. </li></ul>
  16. 16. How is advertising handled in a company? <ul><li>Advertising is handled by: </li></ul><ul><ul><li>In house advertising department </li></ul></ul><ul><ul><li>The outside advertising agency </li></ul></ul>
  17. 17. Types of Advertising(1) <ul><li>There are six basic types of advertising program campaigns:- </li></ul><ul><li>National Advertising – This type pf advertising is designed to reach all type of users (potential customers) or industrial buyers. </li></ul><ul><li>Focus of these type of advertisement will be shown throughout the country throughout all types media. </li></ul><ul><li>This type of advertisement is generally acceptable by all types group of people regardless of age, ethnicity, religion, urban, sub-urban or rural, beliefs, education, lifestyle etc. </li></ul>
  18. 18. Types of Advertising(2) <ul><li>Retail Advertising </li></ul><ul><ul><li>This is localized advertising which is confined to a particular area or location – state, region, city, town etc. </li></ul></ul><ul><ul><li>Many retail outlets or local business use this form of retail advertising in print form, outside advertising or via local radio or TV to convey their advertising. </li></ul></ul><ul><ul><li>Restricted and more focus to give a more effective edge to advertising – targeting certain segments or group of people, age, sex, lifestyle, income, beliefs etc. </li></ul></ul>
  19. 19. Types of Advertising(3) <ul><li>Cooperative Advertising </li></ul><ul><li>The cost of advertising is shared by the manufacturer or producer and the retailer. </li></ul><ul><li>It is an attractive choice as both parties are able to save cost. </li></ul><ul><li>Allows both parties to jointly promote advertising to achieve their objectives. </li></ul><ul><li>This type of advertising is more likely to be focused on the final consumer. </li></ul>Fif FIFA World Cup 2006
  20. 20. Types of Advertising(4) <ul><li>Trade Advertising(B2B Advertising) </li></ul><ul><li>Scope of business operation smaller than Industrial Advertising. </li></ul><ul><li>Manufacturer advertises directly towards to wholesalers, dealers and retailers. </li></ul><ul><li>Trade advertising is confined to local, regional, national or global. </li></ul><ul><li>The Internet and Electronic Data Interchange (EDI) can act as the advertising media for both parties together </li></ul>
  21. 21. Industrial Advertising <ul><li>Advertising is focused on individuals and organization that purchase products used in manufacturing other products. </li></ul><ul><li>Basically a Business to Business (B2B) advertising process where sales is achieved from business conducted with other business. </li></ul><ul><li>One business is need of unfinished goods to complete the finished goods. </li></ul><ul><li>E.g. Mechanical or Electrical component suppliers advertise to would be buyers of the availability of component. </li></ul>
  22. 22. Direct mail Advertising <ul><li>Advertising that is sent to the consumer or industrial users by post, door to door by distributors. </li></ul><ul><li>Effective way of providing information of the company’s products to consumers and businesses. </li></ul><ul><li>Trial samples, discount coupons and other type incentives. </li></ul><ul><li>More effective and more responsive in getting order from consumers and businesses. </li></ul>
  23. 23. Why do business engage in advertising? <ul><li>Business engage in advertising to : </li></ul><ul><li>Increase overall sales and the sales of specific product. </li></ul><ul><li>Provide salesperson with additional selling information for sales presentation. </li></ul><ul><li>Develop leads for salesperson through mail ins, advert response etc. </li></ul><ul><li>Increase cooperation from channel members (supply chain business players) through co-op advertising and promotional campaigns </li></ul><ul><li>Educate the prospect or customer about the company’s products. </li></ul><ul><li>Be informative to the prospect about product and availability. </li></ul><ul><li>Clear any doubts that may be in the mind of the prospect/buyer or customer or showing any reluctance. </li></ul><ul><li>Create sales or sells (by itself) before a salesperson’s calls the prospect or customer . </li></ul>
  24. 24. Sales Promotion <ul><li>What is Sales Promotion (SP)? </li></ul><ul><ul><li>Sales Promotion involves activities or materials. </li></ul></ul><ul><ul><li>Used in the short term </li></ul></ul><ul><ul><li>Need to be changed now and then </li></ul></ul><ul><ul><li>Does not involve personal selling. </li></ul></ul><ul><ul><li>Can be grouped into Trade and sales promotion. </li></ul></ul><ul><ul><li>Helps to create increased consumer demand. </li></ul></ul><ul><ul><li>S.P is helpful sales tool in company’s promotional effort for a hardworking salesperson. </li></ul></ul>Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions.
  25. 25. Examples of Sales Promotional Techniques <ul><li>Examples include:- </li></ul><ul><ul><li>Coupons </li></ul></ul><ul><ul><li>Discount and Promotional Sales (Seasonal, Monthly, yearly) </li></ul></ul><ul><ul><li>Contests </li></ul></ul><ul><ul><li>Point of purchase displays </li></ul></ul><ul><ul><li>Rebates </li></ul></ul><ul><ul><li>Free Samples (Food items) </li></ul></ul><ul><ul><li>Gift and incentive items </li></ul></ul><ul><ul><li>Free travel – free flight tickets etc. </li></ul></ul>
  26. 26. Consumer Sales Promotion Techniques <ul><li>Price deal : A temporary reduction in the price, such as happy hour </li></ul><ul><li>Loyalty rewards program : Consumers collect points, miles, or credits for purchases and redeem them for rewards. The two most famous examples are Pepsi Stuff and A Advantage (product). </li></ul><ul><li>Cents-off deal : Offers a brand at a lower price. Price reduction may be a percentage marked on the package. </li></ul><ul><li>Price-pack deal : The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra). </li></ul><ul><li>Coupons: coupons have become a standard mechanism for sales promotions. </li></ul><ul><li>Loss leader: the price of a popular product is temporarily reduced in order to stimulate other profitable sales </li></ul><ul><li>Free-standing insert (FSI): A coupon booklet is inserted into the local newspaper for delivery. </li></ul><ul><li>On-shelf couponing : Coupons are present at the shelf where the product is available. </li></ul><ul><li>Checkout dispensers: On checkout the customer is given a coupon based on products purchased. </li></ul><ul><li>On-line couponing: Coupons are available on line. Consumers print them out and take them to the store. </li></ul><ul><li>Rebates: Consumers are offered money back if the receipt and barcode are mailed to the producer. </li></ul><ul><li>Contests/sweepstakes/games: The consumer is automatically entered into the event by purchasing the product. </li></ul><ul><li>Point-of-sale displays: </li></ul><ul><ul><li>Aisle interrupter: A sign the juts into the aisle from the shelf. </li></ul></ul><ul><ul><li>Dangler: A sign that sways when a consumer walks by it. </li></ul></ul><ul><ul><li>Dump bin: A bin full of products dumped inside. </li></ul></ul><ul><ul><li>Glorifier: A small stage that elevates a product above other products. </li></ul></ul><ul><ul><li>Wobbler: A sign that jiggles. </li></ul></ul><ul><ul><li>Lipstick Board: A board on which messages are written in crayon. </li></ul></ul><ul><ul><li>Necker: A coupon placed on the 'neck' of a bottle. </li></ul></ul><ul><ul><li>YES unit: &quot;your extra salesperson&quot; is a pull-out fact sheet. </li></ul></ul>
  27. 27. Trade Sales Promotion Techniques <ul><li>Trade allowances: short term incentive offered to induce a retailer to stock up on a product. </li></ul><ul><li>Dealer loader: An incentive given to induce a retailer to purchase and display a product. </li></ul><ul><li>Trade contest: A contest to reward retailers that sell the most product. </li></ul><ul><li>Point-of-purchase displays : Extra sales tools given to retailers to boost sales. </li></ul><ul><li>Training programs: dealer employees are trained in selling the product. </li></ul><ul><li>Push money: also known as &quot;spiffs&quot;. An extra commission paid to retail employees to push products. </li></ul>
  28. 28. Product Pricing (1)
  29. 29. Product Pricing (2) <ul><li>Price is an important element of a comprehensive marketing strategy for a product. </li></ul><ul><ul><li>The four P’s of the marketing mix are: </li></ul></ul><ul><ul><li>Pricing </li></ul></ul><ul><ul><li>Product Management </li></ul></ul><ul><ul><li>Promotion </li></ul></ul><ul><ul><li>Place. </li></ul></ul><ul><li>It is also a key variable in microeconomic price allocation theory. </li></ul><ul><li>Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: </li></ul><ul><li>Fixed Amount </li></ul><ul><li>Quantity Break </li></ul><ul><li>Promotion or Sales Campaign </li></ul><ul><li>Specific Vendor Quote </li></ul><ul><li>Price prevailing on entry </li></ul><ul><li>Shipment or invoice date </li></ul><ul><li>Combination of multiple orders or lines and many others. </li></ul><ul><li>Automated systems require more setup and maintenance but may prevent pricing errors. </li></ul>
  30. 30. Questions - Pricing <ul><li>Pricing involves asking questions like: </li></ul><ul><li>How much to charge for a product or service? This question is a typical starting point for discussions about pricing, however, a better question for a vendor to ask is - How much do customers value the products, services, and other intangibles that the vendor provides. </li></ul><ul><li>What are the pricing objectives? </li></ul><ul><li>Do we use profit maximization pricing? </li></ul><ul><li>How to set the price?: (cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing) </li></ul><ul><li>Should there be a single price or multiple pricing? </li></ul><ul><li>Should prices change in various geographical areas, referred to as zone pricing? </li></ul><ul><li>Should there be quantity discounts? </li></ul><ul><li>What prices are competitors charging? </li></ul><ul><li>Do you use a price skimming strategy or a penetration pricing strategy? </li></ul><ul><li>What image do you want the price to convey? </li></ul><ul><li>Do you use psychological pricing? </li></ul><ul><li>How important are customer price sensitivity and elasticity issues? </li></ul><ul><li>Can real-time pricing be used? </li></ul><ul><li>Is price discrimination or yield management appropriate? </li></ul><ul><li>Are there legal restrictions on retail price maintenance, price collusion, or price discrimination? </li></ul><ul><li>Do price points already exist for the product category? </li></ul><ul><li>How flexible can we be in pricing? : The more competitive the industry, the less flexibility we have. </li></ul><ul><li>The price floor is determined by production factors like costs (often only variable costs are taken into account), economies of scale, marginal cost, and degree of operating leverage </li></ul><ul><li>The price ceiling is determined by demand factors like price elasticity and price points </li></ul><ul><li>Are there transfer pricing considerations? </li></ul><ul><li>What is the chance of getting involved in a price war? </li></ul><ul><li>How visible should the price be? - Should the price be neutral? (ie.: not an important differentiating factor), should it be highly visible? (to help promote a low priced economy product, or to reinforce the prestige image of a quality product), or should it be hidden? (so as to allow marketers to generate interest in the product unhindered by price considerations). </li></ul><ul><li>Are there joint product pricing considerations? </li></ul><ul><li>What are the non-price costs of purchasing the product? (e.g..: travel time to the store, wait time in the store, disagreeable elements associated with the product purchase - dentist -> pain, fish market -> smells) </li></ul><ul><li>What sort of payments should be accepted? (cash, cheque, credit card, barter) </li></ul>
  31. 31. What a Price should do? <ul><li>A well chosen price should do three things: </li></ul><ul><ul><li>Achieve the financial goals of the firm (e.g.: profitability) </li></ul></ul><ul><ul><li>Fit the realities of the marketplace (will customers buy at that price?) </li></ul></ul><ul><ul><li>Support a product's positioning and be consistent with the other variables in the marketing mix </li></ul></ul><ul><ul><li>price is influenced by the type of distribution channel used, the type of promotions used, and the quality of the product </li></ul></ul><ul><ul><li>price will usually need to be relatively high if manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns </li></ul></ul><ul><ul><li>a low price can be a viable substitute for product quality, effective promotions, or an energetic selling effort by distributors </li></ul></ul>
  32. 32. Definition – Efficient & Effective Price <ul><li>Efficient Price – A price that is very close to the maximum that customers are prepared to pay. </li></ul><ul><li>Effective Price – The price the company receives after accounting for discounts, promotion and other incentives. </li></ul>
  33. 33. Types of Effective Pricing Techniques (1) <ul><li>Price Lining – Use of a fixed or limited number of prices for all your product offerings. </li></ul><ul><ul><li>E.g. Product sold for RM 2.00 only or RM2.00 to RM 5.00 per piece. </li></ul></ul><ul><ul><li>Also known as Two Ringgit Shop or Five Ringgit Shop. </li></ul></ul><ul><ul><li>Price are all fixed – No price change – one ceiling price, for example price range does not exceed RM5.00. </li></ul></ul>
  34. 34. Types of Effective Pricing Techniques (2) <ul><li>Promotional Pricing – Pricing refers to an instances where pricing is the key element of the marketing mix – 4Ps ( price, place, promotion and product). </li></ul><ul><li>The Price/Quality Relationship – This refers to the belief (perception) by most consumers that a high price is sign of good quality. </li></ul>
  35. 35. Types of Effective Pricing Techniques (3) <ul><li>Premium Pricing (Prestige Pricing) – The strategy of pricing at or near, the high end of possible price range. </li></ul><ul><ul><li>Consumer will pay a premium price because: </li></ul></ul><ul><ul><li>The high price is an indication of good quality </li></ul></ul><ul><ul><li>The price paid is worth the money paid. </li></ul></ul><ul><ul><li>The product performance surpasses the customer’s expectation. The customer is very satisfied with the product. </li></ul></ul>
  36. 36. Types of Effective Pricing Techniques (3) <ul><li>The term Goldilocks pricing is commonly used to describe the practice of providing a &quot;gold-plated&quot; version of a product at a premium price. </li></ul><ul><li>This is done in order to make the next lower priced option look more reasonable price. </li></ul><ul><ul><li>E.g.- business class airline seats are good value for money by offering higher price. </li></ul></ul><ul><ul><li>E.g.- A limited edition of particular car with added features and benefits to attract customers who prepared to pay the higher price. </li></ul></ul>Lamborghini Limited Edition MAS Business Class Kelisa Limited Edition
  37. 37. Types of Effective Pricing Techniques (3) <ul><li>What is Demand based Pricing? </li></ul><ul><li>Demand-based pricing is any pricing method that uses consumer demand - based on perceived (apparent) value - as the central element. These include : price skimming, price discrimination and yield management, price points, psychological pricing, bundle pricing, penetration pricing, price lining, value-based pricing, and premium pricing. </li></ul>
  38. 38. Business Environment(1) <ul><li>Consumer Goods </li></ul><ul><ul><li>successful salesperson understands their competitors’ products, policies, and practices as well as their own. </li></ul></ul><ul><ul><li>Must be prepared to explain how the company’s product fair against the competitors – Features, Advantages and Benefits (FAB). </li></ul></ul><ul><ul><li>Must be able assess and compare company’s product against the competitors </li></ul></ul>VS
  39. 39. Business Environment(2) <ul><li>Industrial Goods </li></ul><ul><ul><li>Salesperson selling industrial goods and the industrial buyer are in the same industry. </li></ul></ul><ul><ul><li>Industrial buyer seeks information from salesperson on the economic trends and the industry. </li></ul></ul><ul><ul><li>Salesperson must be knowledgeable on both industry and the economy. </li></ul></ul><ul><ul><li>Salesperson may gather such information:- </li></ul></ul><ul><ul><li>Company Records </li></ul></ul><ul><ul><li>Newspaper </li></ul></ul><ul><ul><li>Radio & Television </li></ul></ul><ul><ul><li>Internet and Information bureau. </li></ul></ul>
  40. 40. Overview of the Selling Process

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