ABC s of Selling 10th Edition. Charles M. Futrell
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1 ABC s of Selling 10th Edition Charles M. Futrell
2 Chapter 5 Sales Knowledge: Customers, Products, Technologies McGraw-Hill/Irwin ABC s of Selling, 10/e Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
3 5 Chapter 5-3
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 Know Your Resellers Advertising Aids Salespeople Sales Promotion Generates Sales What s It Worth? Pricing Your Product Know Your Competition, Industry, and Economy 5-4
5 Main Topics, cont... Personal Computers and Selling Knowledge of Technology Enhances Sales and Customer Service Sales: Internet and the World Wide Web Global Technology Provides Service Technology Etiquette 5-5
6 The Tree of Business Life: T T T T T T T T T T T Builds Relationships Knowledge 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 5-6
7 Sources of Sales Knowledge Sales training Experience 5-7
8 Knowledge Builds Relationships Knowledge increases a salesperson s Knowledge increases a confidence in salesperson More knowledge to more sales and more 5-8
9 Find out all you can Know Your Customers 5-9
10 Know Your Company General Company Information Company growth and accomplishment Policies and procedures Production facilities Service facilities 5-10
11 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 5-11
12 Know Your Resellers Understand the channel of distribution Know as much about each channel member as possible Likes and dislikes of each channel member s customers Product lines and the assortment each one carries When each member sees salespeople Distribution, promotion, and pricing policies What quantity of which product each channel member has purchased in the past 5-12
13 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 5-13
14 Exhibit 5-2: Advertising and Sales Promotion Information the Salesperson Provides the Buyer 5-14
15 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 5-15
16 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 presell customers between sales calls 5-16
17 Sales Promotion Generates Sales Consumer sales promotion Trade sales promotion Point-of-purchase (POP) displays Shelf positioning Shelf facings Premiums 5-17
18 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 5-18
19 Exhibit 5-4: Examples of Prices and Discounts Salespeople Discuss in Their Sales Presentations 5-19
20 Know Your Competition, Industry, and Economy Understand products, policies, and practices 5-20
21 Personal Computers and Selling 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 5-21
22 Exhibit 5-6: Top 10 PC Applications 5-22
23 Knowledge of Technology Enhances Sales and Customer Service Personal Productivity Contact management Calendar management Automated sales plans, tactics, and ticklers Geographic information systems Computer-based presentations 5-23
24 Knowledge of Technology Enhances Sales and Customer Service, cont Communications with Customers and Employer Word processing Fax capabilities and support Customer Order Processing and Service Support Salespeople's mobile offices GPS and PDA 5-24
25 Exhibit 5-8: Salespeople Rely on Mobile Technology to Serve Their Customers GPS Device Cell Phone PDA 5-25
26 Sales: Internet and the World Wide Web The Internet The World Wide Web Web page Links Surfing the Internet 5-26
27 Exhibit 5-9: Web Sites Can Provide Valuable Information to Salespeople 5-27
28 Global Technology Provides Service Increased worldwide interaction 5-28
29 Technology Etiquette Netiquette etiquette on the internet Cell Phones Voice Mail Faxes Speakerphones and Conference Calls 5-29
30 Summary of Major Selling Issues Company knowledge includes information on a firm s: History Development practices Procedures Products Distribution Promotion Pricing 5-30
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 5-31
32 Summary of Major Selling Issues, cont 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 5-32
33 Chapter 5 Appendix Sales Arithmetic and Pricing 5-33
34 Types of Prices List price price Net price after Zone price based on geographical location FOB shipping point pays FOB destination pays 5-34
35 Discounts Lower the Price Quantity discounts Noncumulative Cumulative Cash Trade Consumer 5-35
36 Exhibit A: Various Promotional Allowances Available to Resellers 5-36
37 Exhibit B: Types and Examples of Discounts Skip video Video Help 5-37
38 5-38
39 Resellers: Markup and Profit Markup Gross profit Net profit Channel-of-distribution markup Markup arithmetic Return on investment 5-39
40 What Is the Percent Markup? $1.00 = cost to retailer $1.00 = dollar markup $2.00 = selling price 5-40
41 What Is the Percent Markup?, cont It depends on whether you use Selling Price, or Cost Dollar markup is divided by either selling price or cost to retailer Selling price = 50% Cost = 100% We use selling price in calculating the percent of markup 5-41
42 What Is Markup? Markup is the amount added to the product cost to determine its selling price Markup is often expressed as a 5-42
43 Exhibit C: Example of Markup on Selling Price in Channel of Distribution 5-43
44 Exhibit D: Example of Using Unit Cost 5-44
45 Exhibit E: Profit Forecaster for Granola Bars Shown to Buyer 3-Day Special 2-Week Special Normal Total stores Deal dates Regular cost per dozen Less allowance ($.53) Deal cost per dozen Feature price Cases purchased Total investment Total gross sales Total gross profit Return on investment (ROI) 100 June 1 June 30 $ $ a $7,620 b $8,340 c $720 d 9.0% e 100 $ $ ,000 $15,240 $22,680 $7,440 49% 100 $21.60 $ f 1,500 $32,400 $39,420 $7,020 22% g a 5 cases per store b 500 x = $7,620 c 500 x 12 = 6,000; 6000x $1.39 = $8,340 Skip video Video Help d $8,340 - $7,620 = $720 e $720 $7,620 = 9.0% f $21.60 case = $1.80 (regular cost) g $7,020 $32,400 = 22% 5-45
46 5-46
47 Organizations: Value and ROI Value analysis Product cost compared to true value Unit costs ROI is listened to 5-47
48 Video Help The video should start automatically. If it does not, you must move the mouse to the middle of the screen. When a hand icon appears the video is ready. Click once anywhere on the screen to start video. Click once during playback to pause/unpause video. Press the space bar twice to stop video and continue presentation. When video is over, click the next arrow to continue presentation. Video One Video Two 5-48
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