1. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Selling Hospitality Chapter 4 The New World of Buying: Changing Perceived Value has Reshaped Buying Decisions

2. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Selling Hospitality Buyers command the majority of the power, and successful sellers learn to give them what they want: value, as the buyers define it.

3. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Forces Changing Customers’ Perception of Value Products/services are becoming commodities. Technology advances impact on the sales process. Customer is barraged and short of time. Quality of products and services quickly rises to meet rising consumer expectations.

4. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Evolution of Excitement Attributes to Threshold Attributes Customer satisfaction High Low Performance relative to competition LowHigh Excitement attribute

5. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Evolution of Excitement Attributes to Threshold Attributes Customer satisfaction High Low Performance relative to competition LowHigh Excitement attribute Performance attribute

6. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Evolution of Excitement Attributes to Threshold Attributes Customer satisfaction High Low Performance relative to competition LowHigh Excitement attribute Performance attribute Threshold attribute

7. Copyright © 2006 Thomson Delmar Learning All Rights Reserved What Are the Consequences of Value Shifts? If customers perceive products to be interchangeable with others (a commodity), why doesn’t the lowest price always win?

8. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Value Defined Value = Benefits minus Cost

9. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Value Defined Value = Benefits minus Cost Reduce cost by making it easier for the buyer to acquire the product.

10. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Value Defined Value = Benefits minus Cost Reduce cost by making it easier for the buyer to acquire the product. Increase benefits through the sales process.

11. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Value Defined Value = Benefits minus Cost Reduce cost by making it easier for the buyer to acquire the product. Increase benefits through the sales process. Lower costs by removing the cost of exchange.

12. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Three Types of Value Buyers Intrinsic value buyers see the product as a commodity and place value on the lowest price. They see little value in interacting with a salesperson. Extrinsic value buyers seek solutions to complex problems. Quality product is a foundation for value. They are willing to invest time and effort (costs) with the salesperson in return for advice, customization, and problem-solving capabilities. Strategic value buyers want to create synergies that only partnerships and alliances can provide.

13. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Remember In sales negotiations, you are not negotiating with XYZ Corporation, you are negotiating with people. Understanding of buyer motives is important.

14. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Types of Buyer Motives Emotional Rational Hybrid or combination of both

15. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Need Satisfaction Buying Process Traditionally salespeople have viewed the exchange process from their own perspective— the selling process. The smarter way is to include the buyer’s perspectives— the buying/selling process.

16. Copyright © 2006 Thomson Delmar Learning All Rights Reserved The Buying Process Recognition of needs Evaluation of options Resolution of concerns Logistics of acquisition Implementation