1. 9 TH EDITION CHAPTER 12 NEGOTIATING BUYER CONCERNS Manning and Reece

2. 12-2 LEARNING OBJECTIVES Describe common types of buyer concerns Outline general strategies for negotiating buyer concerns Discuss specific methods of negotiating buyer concerns Describe ways to deal with buyers who are trained in negotiating

3. See details Figure 12.1.12-3 SIX-STEP PRESENTATION PLAN 1. APPROACH 2. PRESENTATION 4. NEGOTIATION 3. DEMONSTRATION 6. SERVICE 5. CLOSE

4. 12-4 WIN-WIN STRATEGY NEGOTIATION DEFINED Negotiation Is A Process ”,,,working to reach an agreement that is mutually satisfactory to both buyer and seller. It involves building relationships instead of one-time deals.”

5. See Figure 12.2.12-5 NEGOTIATION PLANNING LEADS TO ACTIONS STRATEGIC PLANNING FOR NEGOTIATING ACTIONS DURING NEGOTIATIONS

6. 12-6 COMMON TYPES OF BUYER CONCERNS NEED FOR PRODUCT PRODUCT ITSELF PRICE PRICE SOURCE OF PRODUCT TIMING TIMING

7. 12-7 NEED FOR PRODUCT Conditioned response: I don’t need the product Conditioned response: I don’t need the product Happy with current product Happy with current product Not convinced of your product’s benefits Not convinced of your product’s benefits

8. 12-8 ABOUT THE PRODUCT Product not established Product not established Product will not be popular Product will not be popular Associates didn’t like the product Associates didn’t like the product Present product/system is satisfactory Present product/system is satisfactory

9. 12-9 SOURCE OF PRODUCT Ways to overcome resistance Ways to overcome resistance --Identify how product solves problems --Superior benefits of your product --Client profits by adding second line --Place trial order to evaluate merits --Recruit champions inside buyer’s firm --Stay visible and connected to client

10. 12-10 PRICE CONCERNS—TRAINED BUYERS Buyers trained in negotiating Buyers trained in negotiating --Budget Limitation Tactic --Take-It-or-Leave-It--Split-the-Difference

11. 12-11 PRICE CONCERNS—LOW PRICE STRATEGY Buyers seeking low price Buyers seeking low price --Sales executives able to apply various discounts --Downside, lower profits and lower commissions

12. 12-12 DEALING WITH PRICE CONCERNS Do add value, stress service Do add value, stress service Don’t make price focal point Don’t make price focal point Don’t apologize for your prices Don’t apologize for your prices Do point out price/quality relation Do point out price/quality relation Explain difference between price and cost Explain difference between price and cost Don’t make concessions too quickly Don’t make concessions too quickly

13. 12-13 PRICE ICEBERG Price is only the tip of the iceberg…remind customer of value-added factors below tip

14. Figure 12.412-14 PRICE VERSUS COST EXAMPLE Note how Canada’s Bombardier positions its CRJ against Airbus.

15. 12-15 CONCERNS RELATED TO TIME Also know as “the stall” Also know as “the stall” Signals conflict Signals conflict Usually customer does not perceive benefits of buying now…or…sees both positive and negative in product Usually customer does not perceive benefits of buying now…or…sees both positive and negative in product

16. See Table 12.112-16 CUSTOMER OBJECTIONS Customer objections are often requests for more information to justify buying decision See Table 12.1 in text for samples

17. 12-17 NEGOTIATING BUYER CONCERNS Anticipate and forestall Anticipate and forestall Know value of your offering Know value of your offering Prepare for negotiations Prepare for negotiations Understand the problem Understand the problem Create alternative solutions Create alternative solutions Find points of agreement Find points of agreement Avoid anger Avoid anger

18. 12-18 SPECIFIC METHODS-1 Direct denial Direct denial --Refute prospects’ opinion or belief --Be firm, not offensive, think win-win Indirect denial Indirect denial --Acknowledge prospects as partly right --Feel-Felt-Found “I understand how you feel” “Others have felt that way” “Until they used the product and found it quite easy and reliable”

19. 12-19 SPECIFIC METHODS-2 Questions Questions --Convert problem into question --Do you agree it’s worth paying a little more for much higher quality? Superior benefit Superior benefit --Acknowledge prospect has valid concern and focus on superior benefit --Superior benefits should outweigh specific customer concerns

20. 12-20 SPECIFIC METHODS-3 Demonstration Demonstration --Discuss competitive advantages of your product --Might also involve physical product demonstrations Trial offer Trial offer --Prospect tries product without purchase commitment

21. 12-21 SPECIFIC METHODS-4 Third-party testimony Third-party testimony --Neutral third-party testimony adds credibility --Almost never triggers client argument Postpone method Postpone method --Postpone answers to client concerns until later in dialog --Explain why you want to postpone

22. Last slide Chapter 12.12-22 APPLICATION: DIGITAL ELECTRONICS Go to a consumer electronics store and ask for help with laptop/notebook PCs Raise a series of concerns and note how salesperson reacts -- Price too high -- Heard that brand “XYZ” is bad -- Maybe its not time to buy