2. Sales Knowledge: Customers, Products, Technologies Chapter 5 McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

3. 5-3 Chapter 5

4. 5-4 Main Topics  The Tree of Business Life: Knowledge  Sources of Sales Knowledge  Knowledge Builds Relationships  Know Your Customers  Know Your Company  Know Your Product 5 Chapter

5. 5-5 Main Topics  Know Your Resellers  Advertising Aids Salespeople  Sales Promotion Generates Sales  What’s It Worth? Pricing Your Product  Know Your Competition, Industry, and Economy  Personal Computers and Selling 5 Chapter

6. 5-6 Main Topics  Knowledge of Technology Enhances Sales and Customer Service  Sales: Internet and the World Wide Web  Global Technology Provides Service  Technology Etiquette Chapter 5

7. 5-7 The Tree of Business Life: Knowledge The Golden Rule Guided by The Golden Rule:  Be an expert on everything associated with your product(s).  Use wisdom when applying knowledge.  Remember, customers rely on you to truthfully provide knowledge and wisdom.  Realize that people do not care how much you know until they know how much you care. I T C Ethical Service Builds T r u e Relationships T TT TTTT TTTT

8. 5-8 Sources of Sales Knowledge  Sales training  Experience

9. 5-9 Knowledge Builds Relationships  Knowledge increases a salesperson’s confidence.  Knowledge increases a buyer’s confidence in the salesperson.  More knowledge leads to more sales and more relationships.

10. 5-10 Know Your Customers  Find out all you can.

11. 5-11 Know Your Company  General company information:  Company growth and accomplishment  Policies and procedures  Production facilities  Service facilities

12. 5-12 Know Your Product  Product knowledge may include:  Performance data  Physical size and characteristics  How the product operates  Specific features, advantages, and benefits of the product  How well the product is selling in the marketplace

13. 5-13 Know Your Resellers  Understand the channel of distribution.  Know as much about each channel member as possible.

14. 5-14 Advertising Aids Salespeople  Main ingredients of a firm’s promotional effort  Types of Advertising Differ:  National advertising  Retail advertising  Cooperative, or co-op, advertising  Trade advertising  Industrial advertising  Direct-mail advertising  Internet advertising

15. 5-15 Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer

16. 5-16 Why Spend Money on Advertising?  Companies advertise because they hope to:  Increase overall sales and sales of a specific product  Give salespeople additional selling information for sales presentations  Develop leads for salespeople through mail-ins and ad response  Increase cooperation from channel members through co-op advertising and promotional campaigns  Educate the customer about the company’s product

17. 5-17 Why Spend Money on Advertising?, cont…  Inform prospects that a product is on the market and where to buy it.  Reduce cognitive dissonance over the purchase.  Create sales or pre-sell customers between sales calls.

18. 5-18 Sales Promotion Generates Sales  Consumer sales promotion  Trade sales promotion  Point-of-purchase (POP) displays  Shelf positioning  Shelf facings  Premiums  Sales promotion on the Internet

19. 5-19 What’s It Worth? Pricing Your Product  Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for the product.

20. 5-20 Exhibit 5-4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations

21. 5-21 Know Your Competition, Industry, and Economy  Understand competitors’ products, policies, and practices.

22. 5-22 Personal Computers and Selling, Exhibits 5-6 and 5-7  The top 10 PC applications include:  Customer/prospect profile  Lead tracking  Call reports  Sales forecasts  Sales data analysis  Sales presentation  Time/territory management  Order entry  Travel and expense reports  Checking inventory/shipping status

23. 5-23 Knowledge of Technology Enhances Sales and Customer Service  Personal Productivity:  Contact management  Calendar management  Automate sales plans, tactics, and tickets  Geographic information system  Computer-based presentations

24. 5-24 Knowledge of Technology Enhances Sales and Customer Service, cont…  Communications with Customers and Employer:  Word processing  E-mail  Fax capabilities and support  Customer Order Processing and Service Support:  Salespeople's mobile offices

25. 5-25 Exhibit 5-9: 3M’s Salesperson Bob Burr Uses Mobile Technology to Serve His Customers GPS Device Cell Phone PDA

26. 5-26 Sales: Internet and the World Wide Web  The Internet  The World Wide Web:  Web page  Links  Surfing the Internet

27. 5-27 Exhibit 5-10: Web Sites Can Provide Valuable Information to Salespeople

28. 5-28 Global Technology Provides Service  Increased worldwide interaction

29. 5-29 Technology Etiquette  Netiquette – etiquette on the internet  Cell Phones  Voice Mail  Faxes  Speakerphones and Conference Calls

30. 5-30 Summary of Major Selling Issues  Company knowledge includes information on a firm’s:  History  Development practices  Procedures  Products  Distribution  Promotion  Pricing

31. 5-31 Summary of Major Selling Issues, cont…  To reduce conflicts and aid channel members in selling products, manufacturers offer assistance in:  Advertising  Sales promotion aids  Pricing allowances  National, retail, trade, industrial, and direct-mail advertising create demand for products and are powerful selling tools in sales presentations.

32. 5-32  Salespeople should be able to confidently discuss price, discounts, and credit policies with customers.  Success in sales requires knowledge of the many technologies used to sell and service customers. Summary of Major Selling Issues, cont…

33. 5-33 Appendix A: Sales Arithmetic and Pricing Chapter 5

34. 5-34 Types of Prices  List price – standard price  Net price – after discounts  Zone price – based on geographical location  FOB shipping point – buyer pays  FOB destination – seller pays

35. 5-35 Discounts Lower the Price  Quantity discounts:  Non-cumulative  Cumulative  Cash  Trade  Consumer

36. 5-36 Exhibit 5A-1: Various Promotional Allowances Available to Resellers

37. 5-37 Exhibit 5A-2: Types and Examples of Discounts Skip video

38. To pause the video, click on the video screen. To resume play, click on the video screen again. Click outside the video screen twice to advance to the next slide.

39. 5-39 Resellers: Markup and Profit  Markup  Gross profit  Net profit  Channel of distribution markup  Markup arithmetic  Return on investment

40. 5-40 What Is Markup?  Markup is the dollar amount added to the product cost to determine its selling price.  Markup is often expressed as a: percentage

41. 5-41 What Is the Percent Markup? $1.00 = cost to retailer $1.00 = dollar markup $2.00 = selling price

42. 5-42 What Is the Percent Markup?, cont…  It depends on whether you use:  Selling Price, or  Cost  Dollar markup is divided by either selling price or cost to retailer.  Selling price = 50%  Cost = 100%  We use selling price in calculating the percent of markup.

43. 5-43 Exhibit 5A-3: Example of Markup on Selling Price in Channel of Distribution

44. 5-44 Exhibit 5A-4: Example of Using Unit Cost

45. 5-45 Exhibit 5A-5: Profit Forecaster for Granola Bars Shown to Buyer Skip video

46. To pause the video, click on the video screen. To resume play, click on the video screen again. Click outside the video screen twice to advance to the next slide.

47. 5-47 Organizations: Value and ROI  Value analysis  Product cost compared to true value  Unit costs  Return on investment (ROI) is listened to

48. End of Chapter 5 Chapter 5 McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.