Product-Selling Strategies
that
Add Value
Concepts and Practices
7-2
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
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
7-3
Fuji Xerox Value Proposition
7-4
See the Website
Redefining Products in the Age of
Information
 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
7-5
Product Selling Model
 Today’s product
 Meets and exceeds expectations
 Better quality, larger selection
 Today’s salesperson
 Acts as partner
 More trustworthy, knowledgeable
 Today’s company
 Acts as team to provide
 Delivery, training, credit, service
7-6
Product-Selling Model
FIGURE
7.1
7-7
Competitive Analysis
 Effective selling is based on a comprehensive analysis of
the competitive situation
 Table 7.1, on the next slide, provides a template for
competitive product analysis
7-8
Competitive
Analysis
Worksheet
TABLE
7.1
7-9
Product Life Cycle Stages
7-10
Product Positioning Options
 Position new versus established products
 Position with price strategies
 Position with value added
7-11
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
7-12
Product-Selling Strategies
for Positioning
FIGURE
7.2
7-13
Application: Slipit® Case
 SLIPIT® is a family of lubricating products marketed
since 1939
 Customers range from Otis Elevator to Pennsylvania
House Furniture
 Note how the label reflects benefits that also are used,
in detail, in sales materials and on the Web at slipit.com
7-14
Slipit Case
See the
Website
7-15
Selling Products with
a Price Strategy
 Low-price emphasis
 Consequences of low price tactics
 E-commerce impact on pricing
7-16
Various Forms of Discounts
 Quantity: lower price for high quantity or dollar amount
 Seasonal: price adjusted by time of year
 Promotional allowance: give special price linked to
special promotion or advertising campaign
 Trade/functional discounts: given to wholesalers for
special services
7-17
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
7-18
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
7-19
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
7-20
Value
Added
by Lexus
7-21
The Total Product Concept
FIGURE
7.3
7-22
Four Product Dimensions
Generic Product
 Generic product: basic product you are selling,
describes product category . . . such as hotels,
MP3 players, or insurance
 Example: Every Smith Hotel offers guest rooms,
meeting rooms, and other basic hotel services
7-23
Four Product Dimensions
Expected Product
 Expected product: Everything that meets the
customer’s minimal expectations beyond
generic product
 Example: Every Smith Hotel offers not only
guest rooms—but the rooms are very clean and
spacious
7-24
Four Product Dimensions
Value-Added Product
 Value-added product: Salesperson offers
customers more than they expect
 Example: Every Smith Hotel recalls your
newspaper preference, wake-up time, and that
you require wireless
Internet access
7-25
Four Product Dimensions
Potential Product
 Potential product: What remains to be done,
what is possible, anticipating customers’ future
needs
 Example: Every Smith Hotel plans to offer
complete office support services
7-26
Value Creation 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
7-27