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CHAPTER7Product-SellingStrategiesthat

AddValueLearningObjectivesDescribepositioningasaproduct-sellingstrategyExplaintheclusterofsatisfactionsconceptDiscussproduct-positioningoptionsExplainhowtosellyourproductwithapricestrategyExplainhowtosellyourproductwithavalue-addedstrategy7-2Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-2PositioningandDifferentiationPositioninginvolves:Thosedecisionsandactivitiesintendedtocreateandmaintainacertainconceptofthefirm’sproductinthecustomer’smindDifferentiationrefersto:YourabilitytoseparateyourselfandyourproductfromthatofyourcompetitorsItisthekeytobuildingandmaintainingacompetitiveadvantage7-3Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-3CreatingaValuePropositionThesetofbenefitsandvaluesthecompanypromisestodelivertocustomerstosatisfytheirneedsAwell-informedcustomerwillusuallychoosetheproductthatoffersthemostvalue7-47-4Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-4PorscheValueProposition7-5SeetheWebsiteCopyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-5TheClusterof

SatisfactionsConceptProductsareproblem-solvingtoolsPeoplebuyproductsiftheyfulfillaproblem-solvingneedToday’sbettereducatedandmoredemandingcustomersareseekingaclusterofsatisfactions7-6Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-6Product-SellingModel7-7FIGURE7.1Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-7Product-PositioningOptionsAppliestobothnewandexistingproductsMaybenecessarytorepositionproductsseveraltimesSalespeoplehaveanimportantandexpandingroleindifferentiatingproductsDirectandpersonalizedformofcommunicationmustbeusedMassadvertisingoftenfailstopositionacomplexproduct7-8Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-8Product-PositioningOptionsPositionnewversusestablishedproductsPositionwithpricestrategiesPositionwithvalueadded7-9Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-9CompetitiveAnalysisValue-addedproduct-sellingstrategyisenhancedwhenbasedonacomprehensiveanalysisofthecompetitivesituationincluding:TheproductItsattributesThebenefitsitoffers

Table7.1,onthenextslide,providesatemplateforcompetitiveproductanalysis7-10Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-10CompetitiveAnalysisWorksheet7-11TABLE7.1Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-11ProductLifeCycleStages7-12Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-12SellingNewversus

MatureProductsNatureandextentofeachstageinproductlifecycledeterminedby:Product’sperceivedadvantageoveravailablesubstitutesProduct’sbenefitsandimportanceofneedsmetbyproductFullspectrumofcompetitiveactivityChangesintechnology,fashion,and/ordemographics7-13Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-13Product-SellingStrategies

forPositioning7-14FIGURE7.2Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-14NewandEmergingProducts:

IntraLinksProvidesfinancialservicesindustrywithsecuretransmissionofhighlyconfidentialinformationacrosstheInternetFirstsalewastoJ.P.Morganfor$50,000Valuepropositionfocusedon:Faster,moresecuredocumenttransferTranslatedintoimprovedcustomerserviceandcostsavings7-15Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-15IntraLinks7-16SeetheWebsiteCopyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-16MatureandEstablishedProducts:

NewYorkLife150-year-oldinsurancecompanyProductportfoliorecentlyexpandedWhencompetingproductsenterthemarket,agentsadoptnewstrategiesCopiesproductsofferedbycompetitorsObjectiveistocreateincustomer’smindthatitisasolid,strong,andsolventcompany7-17Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-17NewYorkLifeInsurance7-18SeetheWebsiteCopyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-18SellingProductswith

aPriceStrategyPricingdecisionsmustbemadeateachstageofthelifecycleSettingpricecanbeacomplexprocessFirststepistodeterminepricingobjectives:SomefirmssetpricestomaximizeprofitsOtherssetamarketshareobjectivePricingstrategiesreflectaproduct’spositioninthemarketplace7-19Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-19TransactionalSellingTacticsthatEmphasizeLowPriceQuantitydiscount:lowerpriceforhighquantityordollaramountSeasonaldiscount:priceadjustedbytimeofyearPromotionalallowance:pricelinkedtospecialpromotionoradvertisingcampaignTrade/functionaldiscounts:giventowholesalersforspecialservices7-20Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-20Consequencesof

LowPriceTacticsHigh/lowinvolvementbuyers?HighemotionalinvolvementwithbrandLow-involvementbuyersfocusonpriceImportanceofquality?Roleofprice-qualityrelationshipinsaleImportanceofservice?Manybuyers,particularlybusiness-to-business,rankserviceaboveabsoluteprice

7-21Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-21E-commerceandPriceTransactionorientation:onlinesalespersonsmostlytransactionoriented,littlevalueadded Buyersoftenwellinformed:onlinebuyersvisitanumberofwebsitesAddingvalue:again,addingvalueisveryimportant7-22Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-22Value-AddedSellingProgressivemarketersaddvaluewithintangiblesIncreasedserviceandcourtesyPromptdeliveries,moreinnovationsValue-addedapproachesyielduniquenicheandcompetitiveedge7-23Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-23TheTotalProductConcept7-24FIGURE7.3Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-24FourProductDimensions:

GenericProductGenericproduct:basicproductyouareselling,describesproductcategory(suchashotels,MP3players,orinsurance)Example:EveryRitz-Carltonhoteloffersguestrooms,meetingrooms,andotherbasichotelservices.7-25Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-25FourProductDimensions:

ExpectedProductExpectedproduct:everythingthatmeetsthecustomer’sminimalexpectationsbeyondgenericproductExample:EveryRitz-Carltonoffersnotonlyguestrooms,buttheroomsareupscaleandluxurious.7-26Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-26FourProductDimensions:

Value-AddedProductValue-addedproduct:salespersonofferscustomersmorethantheyexpectExample:EveryRitz-Carltonrecallsyournewspaperpreference,wake-uptime,andthatyourequirewirelessInternetaccess.7-27Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-27FourProductDimensions:

PotentialProductPotentialproduct:whatremainstobedone,whatispossible,anticipatingcustomers’futureneedsExample:EveryRitz-Carltonplanstooffercompleteservicesforbusinessmeetings.7-28Copyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-28Ritz-Carlton7-29SeetheWebsiteCopyright©2021PearsonEducation,Inc.PublishingasPrenticeHall7-29ValueCreationInvestmentsfor...TransactionalbuyersInvolvesemphasisoneliminatingcosts,avoidingdelaysConsultativebuyersInvolvescustom-tailoredsolutionstodelivermorerealbenefitsStrategicalliancebuyersRequiresleveragingthefullassetsofthecompany;investmentsgowellbeyondthesalesforce7-30Copyright©

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