Chapter 7: Product-Selling Strategies That Add Value

Product Positioning
Positioning – decisions and activities intended to create and maintain a certain conception of the
firm’s product in the customer’s mind
 Must be continually modified to match customer’s changing needs and wants
 Requires a marketing strategy aimed at influencing how a particular market segment
perceives a product vs. the competition
 Done well means the product’s name, reputation, and niche are well recognized

Product Differentiation
Differentiation – ability to separate yourself and you
Not how the product is different but how it is sold in store or online, and what type of stores
you are selling too, price point product from that of your competitors
 On quality (products not always going to be good quality), price (lower the market value
when competitive is at the same price point, private label private are often same quality
better brand giving up visuals and packaging, advertising budget is smaller),
convenience, economy, or other factors
 Key to build and maintaining a competitive advantage, often it can be diluted or don’t
change with the customer
 Creates barriers that make it different for the buyer to choose a competing product on
the basis of price

Custom-Fitting and Communicating the Value Proposition

 Value proposition – set of benefits and values the company promises to deliver to customers to
satisfy their needs
Best if quantified
 Especially true with business buyers

 Exam question
3-D Product Solution Selling Model
Satisfactions –the positive benefits that customers seek when making a purchase. Arise from the:
product itself including the quality
company that makes/distributes the product, especially with new clients, brands can become
picky with it come down to what store the brand is sold at, knowing what brands are sold at a
store is needed, a store that is in the same target market, or complimentary brands especially
when the product is place on the store and where the product sits on the shelf
salesperson who sells/services the product
Brand that is easily brand recognized would be benefited to be placed next too as well as a
product is higher cost
Knowledge helps you achieve product differentiation, understand the competition, and prepare
an effective value proposition
 Competitive analysis worksheet can help, knowing direct and indirect competitors, knowing
about the competitors product
 Be careful not to use technical jargon to impress but benefits that result from the technology

Product-Positioning Strategies
Salespeople can:
1) Position new and emerging products versus mature and well-established products, and how
mature products can be worked together with the new products
2) Position products with price strategies, when the best time to place markdown or place the
product strategically, might differ from country to country but prices are often the same reduce
worldwide being that people can easily look up the prices worldwide, customers can abandon a
purchase if they are not going to get a good deal
3) Position products with value-added strategies, helping the client sell the product with
advertising or helping instore on sales training
New versus Welling-Established Products
 Product Life Cycle – stages of a product from the time it is first introduced to the market until
it is taken off the market
As revenue declines, prices might have to be decline and quality might be reducing, maybe a
change in material or textile, using syntheses rather than natural ingredients

New versus Well-Established Products

Nature and extent of each stage are determined by several factors:
1) the product’s perceived advantage over available substitutes (being seen as a higher quality,
or being seen as brand loyal)
2) the product’s benefits and importance of needs it fulfills;
3) competitive activity; and
4) changes in technology, fashion, or demographics. Needs and wants will change and be
different, contiguous change is needed or product will not sell

Selling Products with a Price Strategy

First step in establishing price is to determine the firm’s pricing objective:
 maximize profits
 obtain market share, by cutting the price
 reflect the products position in the product life cycle
 Must be made at each stage of the product life cycle

Transaction Selling Tactics

Basic strategy focuses on meeting competitors price:
 Quantity Discount – a price reduction made to encourage a larger volume purchase than
would otherwise be expected
 Seasonal Discount – adjusting prices up or down during specific times to spur or
acknowledge changes in demand, holiday clearances
 Promotional Allowance – a price reduction given to a customer who participates in an
advertising or sales support program, seen with department stores
 Trade or Functional Discount – a discount given to channel intermediaries to cover the cost
of the services they provide, saves the store on costs
 “Unbundle” features – reduce price with the removal of some elements of the solution,
provided the clothing in a box rather than steamed and on hangers, changing the quality a bit to
be sold at a cheaper price, example would be Costco

Using Low-Price Tactic

 Excessive focus on low prices and discounts can have a negative impact on profits and
commissions
Consider the following
 Selling to high- or low-involvement buyers?
 How important is quality to the buyers?
 How important is service?

Influence of E-Business on Pricing

Salespeople who are involved primarily in transactional selling and add little or no value to the
sales transaction will often not be able to compete with online vendors
 The new economy is reshaping the world of commerce and every buyer has greater choice

Judging Service Quality

1) Tangibles 2) Reliability (beyond the product but about the company itself) 3) Responsiveness
4) Assurance (being able to solve the problem if any) 5) Empathy (more time with clients to
provide solutions to sell the product, or revaluating vendors)
Companies need to review these five dimensions and make sure that they measure up to
customer expectations

Value-Added Strategies
Can add value to their product with:
 Improved knowledge of customer needs, product benefits, and competitive offerings;
 Stronger relationship and partnership building;
 Better use of sales technologies
 delivery, after sale service, innovation
 Offer unique niche, competitive edge
Expected Product- everything that represents the customer’s minimal expectations
Value-Added Product- product that exists when sales people offer the customer more than they
expect
Potential Product-what may remain to be done to a product, that is, what is possible

Summary
 Competitive and dynamic environment requires effective positioning and repositioning
 Customer satisfaction is achieved through the product, the company, and salesperson
 Selling and positioning strategies vary with each stage of the product lifecycle
 Selling strategies that emphasize price can be effective but have their consequences
 A value added strategy considers the total product concept