Title: Overview of Sales Marketing Management for Technical Products
1Overview of Sales / MarketingManagement for
Technical Products
- City University of Hong Kong
- Engineers in Society ( EE3014 )
Calvin CHUI 13 March, 2009
2Contents
- Section 1
- Marketing
- Product
- Price
- Delivery
- Quality
- Section 2
- Personal Selling
- Selling Process
- Communication
- Professional Selling
- QA
3Section 1
4References
- 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
5Marketing
- 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
6Marketing Four Ps
- Product
- Price
- Promotion
- Placement
7Marketing - 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
8Marketing - 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
9Case iPhone 3G
- Please apply marketing Four Ps on Apples iPhone
3G
Source www.apple.com
10Marketing 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
11Product
- 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
12Product - 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
13Example - Packaging
- Functions of the product package
- To attract target customers
- To identify the product
- To keep the product together
14Example - Packaging
- Functions of the product package
- To provide a description of the product function
- To protect the product
15Product - 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
16Price
- 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
17Price - 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)
18Price - 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
19Price - 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
20Price - 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
21Price - 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
22Delivery
- 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
23Delivery - 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
24Delivery - 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
25Delivery 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
26Delivery 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
27Quality
- 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
28Quality
- 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)
29Quality
- 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?
30Quality
- 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?
31Quality 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)
32Quality Customer Satisfaction
- Kanos model of customer satisfaction
Customer Satisfaction
Delight
excitement
performance
Immediatehappiness
unspoken
Actual Product Performance
Notunhappy
basic
expressed
expected
Disappointed
33Quality 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
34Section 2
35Contents
- Personal Selling
- Selling Process
- Communication
- Professional Selling
- Discussion
36References
- 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
37Personal 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
38Personal 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
39Personal 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
40Selling 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
41Selling 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
42Selling 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
43Selling 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?
44Selling 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
45Selling 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
46Communication
- Communication is the process of delivering a
message from one person or group to another
- Communication is how people exchange meaningful
information
47Communication Process
A Communication Process Model
48Communication 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
49Communication - 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
50Communication - 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
51Communication - 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
52Develop 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
53Professional 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
54Professional 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?
55Professional 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!
56Professional 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
57QA
58Thank You !