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Overview of Sales Marketing Management for Technical Products

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Title: Overview of Sales Marketing Management for Technical Products


1
Overview of Sales / MarketingManagement for
Technical Products
  • City University of Hong Kong
  • Engineers in Society ( EE3014 )

Calvin CHUI 13 March, 2009
2
Contents
  • Section 1
  • Marketing
  • Product
  • Price
  • Delivery
  • Quality
  • Section 2
  • Personal Selling
  • Selling Process
  • Communication
  • Professional Selling
  • QA

3
Section 1
4
References
  • Cyr, Donald G., Gary, Douglas A., Marketing Your
    Product, Self-Counsel Press, 2003, pp. 53-58,
    79-83
  • Jackson, Ralph W., Sales and Sales Management,
    Prentice Hall, 1996, pp. 50-65
  • Kotler P., Principles of Marketing, Prentice
    Hall, 1994, pp. 6-11, 535-539
  • Louis E. Boone, David L. Kurtz, Contemporary
    Marketing Wired, The Dryden Press, 1998,
    pp.47-49
  • Tony P., Strategic Marketing An Introduction
    New York Routledge, 2000, pp.47-48

5
Marketing
  • Marketing is not only a sale selling and
    promotion but in the new sense of satisfying
    customer needs
  • Marketing is a social and managerial process by
    which individuals and groups obtain what they
    need and want through creating and exchanging
    products and value with others

6
Marketing Four Ps
  • Product
  • Price
  • Promotion
  • Placement

7
Marketing - Product Price
  • Product
  • The product management and product marketing
    aspects of marketing deal with the specifications
    of the actual goods or service, and how it
    related to the end-users needs and wants
  • Price
  • This refers to the process of setting a price for
    a product, including discounts

8
Marketing - Promotion Placement
  • Promotion
  • This includes advertising, sales promotion,
    publicity, and personal selling, and refers to
    the various methods of promoting the product,
    brand, or company
  • Placement
  • Placement or distribution refers to how the
    product gets to the customer for example, point
    of sale placement or retailing

9
Case iPhone 3G
  • Please apply marketing Four Ps on Apples iPhone
    3G

Source www.apple.com
10
Marketing 7Ps ( 3 more)
  • People
  • Any person coming into contact with customers can
    have an impact on overall satisfaction
  • Process
  • This is the processes involved in providing a
    service and the behavior of people, which can be
    crucial to customer satisfaction
  • Physical Evidence
  • Unlike a product, a service cannot be experienced
    before it is delivered, which makes it intangible

11
Product
  • A successful product must benefit your customers
  • Identify the need of your customers
  • Understand your customers perceived needs
  • E.g. Sofa is not just a chairor a piece of
    furniture itprovides comfort as well
    asreflecting personality andlifestyle

Source www.yanhodesign.com
12
Product - Product Value
  • Interest Value
  • The pleasure derived from using the product
  • Identity
  • Personality and lifestyle
  • Risk
  • Possibility and importance of a bad purchase
  • Packaging
  • Minor in the past important in today
  • Protection, attraction, transportation and
    promotion

13
Example - Packaging
  • Functions of the product package
  • To attract target customers
  • To identify the product
  • To keep the product together

14
Example - Packaging
  • Functions of the product package
  • To provide a description of the product function
  • To protect the product

15
Product - Product Value
  • Branding
  • Name, symbol, or design to identify your products
    from those of your competitors
  • Helps customer identify your product
  • Protect your product features from imitation
  • Build a corporate image
  • Example A BMWs new Mini, you could get a bigger
    car at lower price, but that would be
    zero-prestige low-priced car. People will pay
    more for the small Mini instead. This is luxury
    defined, being able to pay extra for style

16
Price
  • Pricing is an ongoing concern
  • Pricing relates to industry supply and demand
  • Pricing relates to customer perception of the
    product benefits
  • Todays pricing strategies need to combine hard
    data from an activity-based cost system with soft
    data from marketing

17
Price - Price Structure
  • Unit Cost (Total Variable Costs Fixed Costs)
    / Units Sold
  • Total Variable Costs 10,000
  • Fixed Costs 10,000
  • United Sold 5,000
  • then Unit Cost 4.0 per unit
  • Fixed cost represents the overhead expenses that
    dont change with the volume of work (e.g rent,
    depreciation, insurance and administrative
    expenses)
  • Variable cost represents expenses that can change
    based on the volume of work (e.g. material,
    labor, overtime pay and commission on sales)

18
Price - Price Structure
  • Markup
  • Selling Price Unit Cost (Unit Cost x Rate of
    Return)
  • Selling Price 4.0 (4.0 x 15)
  • Selling price 4.60
  • Markup (Unit Price Unit Cost) / Unit Cost x
    100
  • Markup (4.6 4.0) / 4.0 x 100
  • then Markup 15

19
Price - Price Structure
  • Margin
  • Selling Price Unit Cost / (1 Desired Return
    on Sales)
  • Selling Price 4.0 / (1 13)
  • Selling Price 4.6
  • Margin (Unit Price Unit Cost) / Price x
    100
  • Margin (4.6 4.0) / 4.6 x 100
  • then Margin 13

20
Price - Pricing Strategy
  • Profit Maximization
  • Setting a price level to attain the highest
    possible current profit
  • Market Share
  • Pay attention to your competition and set your
    price to obtain market share
  • Of course this would happen when competitive
    products are similar and where the market is
    price sensitive

21
Price - Pricing Strategy
  • Obtain ROI (Return on Investment)
  • Establish a price that will provide a certain
    percentage return on investment
  • Such as 10 percent ROI after tax
  • Price Skimming
  • Setting a high price to maximize early cash
    recovery before catering to moreprice sensitive
    segment of themarket

22
Delivery
  • Bring your product to your target customer or
    market
  • Make your product available at a time and place
    that is convenient to your target customer
  • Make it easy for your customer to buy

23
Delivery - Methods
  • Producer - Customer
  • The simplest and most direct marketing channel
  • From producer to customer
  • Open markets fish markets, meat and fresh
    produce markets and flea markets
  • Door-to-door
  • Trade shows
  • Street vending
  • Product inserts
  • Internet

24
Delivery - Methods
  • Producer - Retailer - Customer
  • Department stores
  • Manufacturers sales representative
  • Independent salesperson who distributes products
    to retailers
  • Producer - Wholesaler - Retailer - Customer
  • Small producers sell to wholesalers who then sell
    to small retailers
  • This approach allows indirect contact between
    thousands of producers and retailers
  • Producer - Agent - Wholesaler - Retailer -
    Customer
  • Agents main function is to bring buyers and
    sellers together

25
Delivery Distribution Consideration
  • Customer
  • Number of customers
  • When we have a large number of customers, we may
    need a go-between (or middleman) to serve them
  • Purchasing patterns
  • If customers buy on a frequent basis, a greater
    number of go-betweens is required. E.g. drinks
    and sundries
  • Geographic dispersion
  • Producers may set up their own sales outlets in
    densely populated areas, but use go-betweens in
    less concentrated areas

26
Delivery Distribution Consideration
  • Product Characteristics
  • Perish-ability
  • Perishable products suitable for direct or short
    distribution route to the end user
  • E.g. fresh produce and fashionable goods
  • Product Value
  • Products of high value or custom-made products
    are generally sold directly to the customer
  • Convenience Goods
  • Products such as staples, impulse goods, and
    emergency supplies require a go-between to give
    the product maximum exposure

27
Quality
  • Todays customers have high expectations and they
    are managing their consumption more carefully
  • The customer defines quality, not the
    manufacturer. If you know what your customers
    want and what influences them, youve got the
    competitive edge
  • Customer demand more than just a fair price they
    are seeking added value. Value is the customers
    perception of the balance between the quality of
    goods or services that a firm provides and their
    price.
  • Example Lexus and Infiniti are in vogue because
    they emphasize quality and value

28
Quality
  • Quality consists of the capacity to satisfy
    wants(Edwards C.D., The Meaning of Quality,
    Quality Progress, Oct. 1968)
  • Quality is the degree to which a specific product
    conforms to a design or specification(Gilmore
    H.L., Product Conformance Cost Quality
    Progress, June 1974)
  • Quality is the degree of excellence at an
    acceptable price and the control of variability
    at an acceptable cost(Broh R.A., Managing
    Quality for Higher Profits, McGraw Hill 1982)

29
Quality
  • Product Quality
  • Performance
  • How well a product performs the task it was
    designed to do?
  • Durability
  • How long the product will last?
  • Features
  • What special features does the product have which
    makes it superior to competitive offering?
  • Reliability
  • Can one expect the same kind of quality every
    time that the product is used?
  • Fit and finish
  • Does the product look and feel like a quality
    product?

30
Quality
  • Service Quality
  • Tangibles
  • Do the physical facilities, equipment and
    appearance of personnel associated with the
    service promote confidence in the quality of the
    service?
  • Reliability
  • Is there evidence of an ability to perform the
    promised service properly the first time?
  • Competence
  • Do the personnel possess knowledge and skill and
    have they an ability to convey trust and
    confidence?
  • Communication
  • Are customers kept informed about the service
    offered in the language they can understand? Do
    the providers of the service listen to what the
    customers have to say?

31
Quality Customer Satisfaction
  • Quality is usually referred to several critical
    dimensions that can be identified and measured,
    such as number of defects, durability and
    reliability
  • Quality also includes the intangible components
    of customer satisfaction, the ability of a good
    or service to meet or exceed buyer needs and
    expectations
  • Quality is what your customer says it is not
    what you say it is. To find out about your
    quality, ask your customer. (Feigenbaum A.V.,
    Quality Management Consultant)

32
Quality Customer Satisfaction
  • Kanos model of customer satisfaction

Customer Satisfaction
Delight
excitement
performance
Immediatehappiness
unspoken
Actual Product Performance
Notunhappy
basic
expressed
expected
Disappointed
33
Quality Customer Satisfaction
  • Kanos model explains that for some customer
    attributes, customer satisfaction is dramatically
    increased with only a small improvement in
    performance, while for other customer attributes,
    customer satisfaction is increased only a small
    amount even when the product performance is
    greatly improved

34
Section 2
35
Contents
  • Personal Selling
  • Selling Process
  • Communication
  • Professional Selling
  • Discussion

36
References
  • Brooks, William T., Sales Techniques, New York
    McGraw-Hill Professional, 2004, pp. 2-3, 15-36
  • Jackson, Ralph W., Sales and Sales Management,
    Prentice Hall, 1996, pp. 50-65
  • Kotler P., Principles of Marketing, Prentice
    Hall, 1994, pp. 6-11, 535-539

37
Personal Selling
  • Introduction
  • Personal selling is a promotional method in which
    one party (e.g., salespeople) uses skills and
    techniques for building personal relationships
    with another party (e.g., customer) that results
    in both parties obtaining value
  • In many business activities, the salespeople is
    the only individual contact the customer. As a
    result, the salespeoples action and behavior can
    significantly affect the companys image

38
Personal Selling
  • Perception
  • People think salespeople possess traits, such as
    aggressive, arrogant and greedy
  • Salespeople only want to make a quick sale, by
    the result to increase their commission
  • Salespeople are NOT willing to invest on long
    term project

39
Personal Selling
  • Todays Salespeople
  • The most successful salespeople are those who
    work hard to understand their customers needs
    with the ultimate goal of ensuring that
    customers needs are satisfied at a high level 

40
Selling Process
  • The selling process is a set of activities
    undertaken to successfully obtain an order and
    building long-term customer relations
  • Prospecting and Qualifying
  • Pre-call planning
  • Approach
  • Presentation and demonstration
  • Product evaluation
  • Selection and negotiation
  • Closing
  • Follow-up

41
Selling Process
  • Prospecting and Qualifying
  • Identify potential customer
  • Gather sufficient information about the market
    and individual prospects
  • Pre-call planning
  • Do your research about a prospective customer
    prior to making a sales call
  • Approach
  • Engaging your customer
  • Build trust and build rapport

42
Selling Process
  • Presentation and demonstration
  • Present and demonstrate the product benefits
  • Understand customers needs is the key to
    success
  • Product evaluation
  • Help your customer to find out how your product
    or service can solve her problem
  • Selection and negotiation
  • After product approval stage, help your customer
    to make a right choice
  • Work out an agreement thats mutually
    satisfactory for both parties

43
Selling Process - Closing
  • Closing
  • A trial close is not a normal asking for the
    order close, but a test taken to judge if one
    counterpart is ready to close.
  • Some of the common trial close questions are
  • It looks like you really like this, it that
    true?
  • When would be a convenient time to have this
    delivered?
  • If we brought it in where would you set it up?

44
Selling Process - Closing
  • Closing
  • Possible signs that the salespeople should close
    the call
  • When the customer nods approvingly when asking
    about price or credit terms
  • The salespeople should close the call after the
    customer or prospect has asked for updated
    pricing or product samples
  • When the customer / prospective buyer suggests a
    future meeting date to discuss pricing, quality
    and so on.
  • Close asking the customer for the order

45
Selling Process Follow-up
  • Follow-up
  • The follow-up allows the salespeople to assure
    his or her continued interest and to address
    buyer concerns that might have arisen since the
    sale
  • In short, it is done to help ensure customer
    satisfaction

46
Communication
  • Communication is the process of delivering a
    message from one person or group to another
  • Communication is how people exchange meaningful
    information

47
Communication Process
A Communication Process Model
48
Communication Process
  • Encoding
  • process of putting though into symbolic form
  • Decoding
  • process by which the receiver assigns meaning to
    the symbols encoded by the sender
  • Response
  • reactions of the receiver after being exposed to
    the message
  • Feedback
  • part of the receiver response communicated back
    to the sender
  • Noise
  • unplanned static or distortion during the
    communication process which results in the
    receiver getting a different message than the one
    the sender sent

49
Communication - Listening
  • Listening is the process of receiving,
    constructing meaning from, and responding to
    spoken and/or nonverbal messages
  • Listening means hearing something with thoughtful
    attention
  • Effective communication is 2-way
  • depends on speaking and listening
  • If communication is a 2-way process, then
    listening should be considered an active part of
    it

50
Communication - Listening vs. hearing
  • Hearing- physical process natural passive
  • Listening- physical mental process active
    learned process a skill
  • Listening is hard!
  • You must choose to participate in the process of
    listening

51
Communication - Listening Facts
  • We listen at 125-250 wpm, think at 1000-3000 wpm
  • 75 of the time we are distracted, preoccupied or
    forgetful
  • 20 of the time, we remember what we hear

WPM Words per minute
52
Develop an Effective Communication
  • Identify the target audience and their
    characteristics
  • Determine the communication objectives and define
    the desired response
  • A message should be constructed in an effective
    content structure
  • Media must be selected
  • Sources must be highly credible

53
Professional Selling
  • Positioning and Timing are the 2 most essential
    components for closing a sale
  • Positioning
  • PPC Personal - - Product - - Company
  • Positioning is the relative ranking or perception
    that prospects and customers have of you, your
    product, and your company relative to your
    competition

54
Professional Selling
  • Positioning personal positioning
  • Dress, style, image
  • Etiquette, manners, timeliness
  • Responsiveness, expertise, knowledge and problem
    solving
  • Examples
  • Are your clothes pressed and clean?
  • Are your samples or sales tools organized and
    spotless?

55
Professional Selling
  • Timing
  • In todays competitive market, you often wont
    know when the customers suddenly and urgently
    need to buy your product or service
  • Getting out in front - you need to be the person
    they think of
  • Your own digital newsletter
  • A quarterly update or special report
  • New product update through email or mail
  • Christmas cards, birthday cards and
  • Periodic telephone communication
  • Your own web site or blogConsistent and
    persistent, but never spam!

56
Professional Selling - Common Errors
  • Talking too much and listening too little
  • Not listening
  • Not asking enough questions
  • Too little pre-call planning
  • Presenting too many features
  • Not creating value
  • Under delivering on promises

57
QA
58
Thank You !
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