Marketing chapter 5a sales knowledge customers,products,technologies

Chapter Sales Knowledge: Customers, Products, Technologies McGraw-Hill/Irwin ABC’s of Selling, 10/e Copyright © 2009 by The McGraw-Hill Companies, Inc All rights reser 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 5-2 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 5-3 The Tree of Business Life: Knowledge vic Et h ic al r Se T T T T T TT T T T T Builds True e Relationships T I C 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 not care how much you know until they know how much you care 5-4 Sources of Sales Knowledge   Sales training Experience 5-5 Sources of Sales Knowledge  Sales Training – effort put forth by employer to provide the opportunity for the salesperson to receive job-related attitudes, concepts, rules, and skills that result in improved performance  Education, Reading, and Word-of-mouth 5-6 Sources of Sales Knowledge  Experience – the critical source  Selling is a skill developed through experience 5-7 Knowledge Builds Relationships Knowledge increases a salesperson’s confidence, and, Knowledge increases a buyer’s confidence in the salesperson Thorough knowledge about your product is needed to gain the buyer’s confidence More knowledge, more confidence mean more relationships, and… More relationships mean more sales 5-8 Know Your … 5-9 Know Your Customers  Find out all you can 5-10 Summary of Major Selling Issues  Company knowledge includes information on a firm’s: History  Development practices  Procedures  Products  Distribution  Promotion  Pricing  5-48 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 5-49 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 5-50 Chapter Appendix Sales Arithmetic and Pricing 5-51 Types of Prices      List price – standard price charged to customers Net price – after allowance for all discounts Zone price – based on geographical location FOB shipping point – buyer pays transportation charges – title transfers FOB destination – seller pays all shipping costs 5-52 Discounts Lower the Price  Quantity discounts Noncumulative – one-time  Cumulative     Cash – ex 2/10 Net 30 Trade – Wholesaler / Retailer Consumer 5-53 Exhibit B: Types and Examples of Discounts 5-55 Resellers: Markup and Profit       Markup Gross profit Net profit Channel-of-distribution markup Markup arithmetic Return on investment 5-56 What Is the Percent Markup? $1.00 = cost to retailer $1.00 = dollar markup $2.00 = selling price 5-57 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 5-58 What Is the Percent Markup?, cont… $1.00 = cost to retailer $1.00 = dollar markup $2.00 = selling price • Selling price = 50% • Cost = 100% • We use selling price in calculating the percent of markup 5-59 What Is Markup?   Markup is the dollar amount added to the product cost to determine its selling price Markup is often expressed as a percentage 5-60 Exhibit C: Example of Markup on Selling Price in Channel of Distribution 5-61 Exhibit E: Profit Forecaster for Granola Bars Shown to Buyer Total stores Deal dates Regular cost per dozen Less allowance ($.53) Deal cost per dozen Feature price Cases purchased Total investment Total gross sales Total gross profit Return on investment (ROI) a cases per store b 500 x 15.24 = $7,620 c 500 x 12 = 6,000; 6000x $1.39 = $8,340 3-Day Special 2-Week Special Normal 100 June – June 30 $21.60 - 6.36 $15.24 1.39 500a $7,620b $8,340c $720d 9.0%e 100 100 $21.60 - 6.36 $15.24 1.39 1,000 $15,240 $22,680 $7,440 49% $21.60 $21.60 2.19f 1,500 $32,400 $39,420 $7,020 22%g d $8,340 - $7,620 = $720 $720 ÷ $7,620 = 9.0% f $21.60 ÷ 12 @ case = $1.80 (regular cost) g $7,020 ÷ $32,400 = 22% e 5-63 Organizations: Value and ROI  Value analysis    Product cost compared to true value Unit costs ROI is listened to 5-64 ... 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... 5-4 Sources of Sales Knowledge   Sales training Experience 5-5 Sources of Sales Knowledge  Sales Training – effort put forth by employer to provide the opportunity for the salesperson to receive... of Sales Knowledge  Experience – the critical source  Selling is a skill developed through experience 5-7 Knowledge Builds Relationships Knowledge increases a salesperson’s confidence, and, Knowledge