1. CHAPTER 7
Product-Selling Strategies that Add Value

2. Learning Objectives Describe positioning as a product-selling strategy
Explain the cluster of satisfactions concept
Discuss product-positioning options
Explain how to sell your product with a price strategy
Explain how to sell your product with a value-added strategy
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3. Positioning and Differentiation
Positioning involves:
Those decisions and activities intended to create and maintain a certain concept of the firm’s product in the customer’s mind
Differentiation refers to:
Your ability to separate yourself and your product from that of your competitors
It is the key to building and maintaining a competitive advantage
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4. Creating a Value Proposition
The set of benefits and values the company promises to deliver to customers to satisfy their needs
A well-informed customer will usually choose the product that offers the most value
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5. Porsche Value Proposition
See the Website
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6. The Cluster of Satisfactions Concept
Products are problem-solving tools
People buy products if they fulfill a problem-solving need
Today’s better educated and more demanding customers are seeking a cluster of satisfactions
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7. Product-Selling Model
FIGURE
7.1
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8. Product-Positioning Options
Applies to both new and existing products
May be necessary to reposition products several times
Salespeople have an important and expanding role in differentiating products
Direct and personalized form of communication must be used
Mass advertising often fails to position a complex product
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9. Product-Positioning Options
Position new versus established products
Position with price strategies
Position with value added
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10. Competitive Analysis
Value-added product-selling strategy is enhanced when based on a comprehensive analysis of the competitive situation including:
The product
Its attributes
The benefits it offers
Table 7.1, on the next slide, provides a template for competitive product analysis
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11. Competitive Analysis Worksheet
TABLE
7.1
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12. Product Life Cycle Stages
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13. Selling New versus Mature Products
Nature and extent of each stage in product life cycle determined by:
Product’s perceived advantage over available substitutes
Product’s benefits and importance of needs met by product
Full spectrum of competitive activity
Changes in technology, fashion, and/or demographics
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14. Product-Selling Strategies for Positioning
FIGURE
7.2
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15. New and Emerging Products: IntraLinks
Provides financial services industry with secure transmission of highly confidential information across the Internet
First sale was to J.P. Morgan for $50,000
Value proposition focused on:
Faster, more secure document transfer
Translated into improved customer service and cost savings
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16. IntraLinks See the Website
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17. Mature and Established Products: New York Life
150-year-old insurance company
Product portfolio recently expanded
When competing products enter the market, agents adopt new strategies
Copies products offered by competitors
Objective is to create in customer’s mind that it is a solid, strong, and solvent company
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18. New York Life Insurance
See the Website
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19. Selling Products with a Price Strategy
Pricing decisions must be made at each stage of the life cycle
Setting price can be a complex process
First step is to determine pricing objectives:
Some firms set prices to maximize profits
Others set a market share objective
Pricing strategies reflect a product’s position in the marketplace
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20. Transactional Selling Tactics that Emphasize Low Price
Quantity discount: lower price for high quantity or dollar amount
Seasonal discount: price adjusted by time of year
Promotional allowance: price linked to special promotion or advertising campaign
Trade/functional discounts: given to wholesalers for special services
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21. Consequences of Low Price Tactics
High/low involvement buyers?
High emotional involvement with brand
Low-involvement buyers focus on price
Importance of quality?
Role of price-quality relationship in sale
Importance of service?
Many buyers, particularly business-to-business, rank service above absolute price
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22. E-commerce and Price
Transaction orientation: online sales persons mostly transaction oriented, little value added
Buyers often well informed: online buyers visit a number of websites
Adding value: again, adding value is very important
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23. Value-Added Selling Progressive marketers add value with intangibles
Increased service and courtesy
Prompt deliveries, more innovations
Value-added approaches yield unique niche and competitive edge
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24. The Total Product Concept
FIGURE
7.3
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25. Four Product Dimensions: Generic Product
Generic product: basic product you are selling, describes product category (such as hotels, MP3 players, or insurance)
Example: Every Ritz-Carlton hotel offers guest rooms, meeting rooms, and other basic hotel services.
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26. Four Product Dimensions: Expected Product
Expected product: everything that meets the customer’s minimal expectations beyond generic product
Example: Every Ritz-Carlton offers not only guest rooms, but the rooms are upscale and luxurious.
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27. Four Product Dimensions: Value-Added Product
Value-added product: salesperson offers customers more than they expect
Example: Every Ritz-Carlton recalls your newspaper preference, wake-up time, and that you require wireless Internet access.
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28. Four Product Dimensions: Potential Product
Potential product: what remains to be done, what is possible, anticipating customers’ future needs
Example: Every Ritz-Carlton plans to offer complete services for business meetings.
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29. Ritz-Carlton See the Website
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30. Value Creation Investments for . . .
Transactional buyers
Involves emphasis on eliminating costs, avoiding delays
Consultative buyers
Involves custom-tailored solutions to deliver more real benefits
Strategic alliance buyers
Requires leveraging the full assets of the company; investments go well beyond the sales force
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31. Key Concept Discussion Questions
Describe positioning as a product-selling strategy
Discuss product-positioning options
Explain the cluster of satisfactions concept
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

32. Key Concept Discussion Questions
Explain how to sell your product with a price strategy
Explain how to sell your product with a value-added strategy
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

33. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2010 Pearson Education, Inc.  
Publishing as Prentice Hall
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