Test 2 Flashcards
Categories of Business Consumers
Producers
Re-sellers
Governments
Institutions
Type of Producer
Original Equipment Manufacturers (OEMs)
Types of Re-sellers
Wholesalers
Retailers
Types of Governments
Federal
State
Municipal
County
Types of Institutions
Unions Foundations Civic Clubs Nonprofits Churches Other
Types of Demand in Business Markets
Derived
Inelastic
Joint
Fluctuating
Derived Demand
Demand for business products results from demand for consumer products.
Inelastic Demand
A change in price will not significantly affect the demand for product.
Joint Demand
Multiple items are used together in final product. Demand for one item affects all.
Fluctuating Demand
Demand for business products is more volatile than for consumer products.
Features of a Consumer Buyer (6)
- Purchase for household consumption
- Decisions made by individuals
- Purchase based on brand or personal recommendation
- Emotional buyers
- May make quick decisions
- Purchase consumer goods/services
Features of an Organizational Buyer (5)
- Decisions made by several people
- Purchase based on technical specification and product expertise
- Rational buyers
- May make lengthy decisions
- Purchase complex goods/services
Types of Business Buying Situations
New-task Buy
Straight Re-buy
Modified Re-buy
Systems Selling
New-task Buy
Salespeople rely on consultative selling skills
Straight Re-buy
Salespeople constantly monitor satisfaction
Modified Re-buy
Salespeople provide service and anticipate changes
Systems Selling
Salespeople bundle products and focus on service
Steps in the Buying Process
Need Awareness Evaluation of Solutions Resolution of Problems Purchase Implementation
Need Awareness
Create value by determining problems and identifying solutions
Evaluation of Solutions
Create value by providing useful information
Resolution of Problems
Salespeople can overcome objections to purchase
Purchase
Create value by arranging financing or supervising delivery and installation
Implementation
Timely delivery, superior installation, accurate invoicing, and follow-up contact by the salesperson
Buyer Resolution Theory
A purchase is made only after the prospect has answered 5 buying decision questions
5 Buying Decision Questions
Why should I buy? What should I buy? Where should I buy? What's a fair price? When should I buy?
Promotional Strategy for Buying Decision Question:
Why should I buy?
Advertising
Promotional Strategy for Buying Decision Question:
What should I buy?
Advertising
Promotional Strategy for Buying Decision Question:
Where should I buy?
Advertising, PR, Sales
Promotional Strategy for Buying Decision Question:
What’s a fair price?
Sales, Sales Promotion
Promotional Strategy for Buying Decision Question:
When should I buy?
Sales, Sales Promotion
Features of Hedonic Motivation
Personal gratification
Emotional satisfaction
Rewarding experience
Features of Utilitarian Motivation
Practical application
Accomplish things
Maintain status quo
4 shopping activities
Acquisitional Shopping
Epistemic Shopping
Experiential Shopping
Impulsive Shopping
Acquisitional Shopping
specific, intended purpose
Epistemic Shopping
acquiring knowledge
Experiential Shopping
providing relaxation and fun
Impulsive shopping
desire for immediate self-fulfillment
Types of Promotions for Shopping Activities
Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-Of-Purchase Promotion
Group Influences, from specific to general
Customer Roles Reference Groups Social Class Culture and Subculture
Sources of Prospects
Referrals, Directories, Trade Shows/Publications, Telemarketing, Direct Response, Sales Letters, Websites, Computerized Databases, Cold Calling, Networking, Educational Seminars, Non-Sales Employees
Referrals
Prospect recommended by current satisfied customer
Directories
Includes company info and key contacts
Telemarketing
the practice of marketing goods and services through telephone contact
Purposes of Telemarketing
- Identify buyers and contact lists
- Qualify prospects
- Verify sales leads
- Conduct follow-ups
Direct Response
features inquiry cards or information requests via mail or telephone
Sales Letters
send sales letters to decision makers, then follow up
Use of Websites
cost-effective way for sales professionals to: • Project personal image • Present product information • Generate leads from visitors • Establish e-mail lists
Computerized Databases
In-House
Purchase Databases
Commercial Lists
Cold Calling
Calling prospects without referrals
Networking
Making personal connections
3 types of networking
- Within organization
- Within industry
- Outside industry
Educational Seminars
Provide opportunity to showcase product without pressuring to buy
5 Networking Guidelines
- Meet as many people as possible
- Tell them what you do
- Don’t do business
- Offer business card/contact info
- Edit contacts/conduct followups
Consultative Sales Presentation Steps
Need Discovery
Selection of the Solution
Need Satisfaction through informing, persuading, and/or reminding
Servicing the sale
Types of questions
Survey
Probing
Confirmation
Need-Satisfaction
Survey Questions
Information gathering questions designed to obtain knowledge
Not used for factual information one could acquire from other sources prior to the sales call
Probing questions
Help to uncover and clarify the prospect’s buying problem and circumstances
Help the salesperson and customer gain a mutual understanding of why a problem is important
Ex.“Tell me how A/V problems can negatively affect
your sales meeting.
Confirming questions
Verify accuracy and assure a mutual understanding of information exchanged
Ex.“Do I understand you correctly that airport transportation is a key factor in selecting a hotel?”
Need-Satisfaction Questions
Designed to move the sales process toward commitment and action
Focus on specific benefits
Ex.“If I told you I could offer the key features you are looking for in a hotel along with a 10% discount on rooms and meal charges, would you be comfortable giving me a verbal commitment to move forward?”
3 types of presentation strategies
Persuasive
Informative
Reminder
Persuasive presentations
To influence the prospect’s beliefs, attitudes, or behavior and to encourage buyer action
Used when a need is identified
Shift from rational to emotional appeals
Informative presentations
Emphasizes facts
Commonly used to introduce new products and
services
Stress clarity, simplicity, and directness - avoid
information overload
Reminder Presentations
Also known as “reinforcement presentations”
Maintains product awareness and benefits
Good when working with repeat customers
Often part of service after the sale
Benefits of demonstration (5)
Improved communication and retention Proof of buyer benefits Feeling of ownership Quantifying the solution Value proposition revisited
Guidelines for presentations that create value
Creativity, Customization, Setting, Appropriate sales tools, One idea at a time, Sensory appeal, Balance of telling showing and involvement. REHEARSE.
Selling tools for effective demonstrations (7)
Cost/benefit analysis Product demonstration Plant Tour Catalogs/brochures Article reprints Presentation folders Computer-based tools
7 steps of planning for a negotiation
- Gather information
- Decide on team vs. individual negotiations for both seller and buyer
- Understand the value of what you are offering
- Determine your goals and financial objectives
- Prepare an agenda
- Review adaptive selling styles
- Use the Negotiations Worksheet
5 Negotiating tips
Leave room to compromise
Look for a win-win solution for both parties
Slow down and be patient
Negotiate with limited authority
Concede slowly and ask for something in return
5 common types of buyer concerns
Need for the product Product itself Source of the product Timing Price
8 methods for negotiating buyer concerns
- Direct Denial
- Indirect Denial
- Questions
- Superior Benefit
- Demonstrations
- Trial Offer
- Third-party testimony
- Postpone method
Direct Denial
Refute prospect’s opinion or belief
Indirect Denial
Acknowledge prospects as partly right
Questions
Convert problem into need-satisfaction question
Superior Benefit
Acknowledge prospect has valid concern and focus on superior benefit
Superior benefits should outweigh specific customer concerns
Demonstrations
Discuss competitive advantages of your product.
Overcome skepticism
Trial Offer
Prospect tries product without purchase commitment
Third-party testimony
Neutral third-party testimony adds credibility
Postpone Method
Postpone answers to client concerns until later in dialogue
5 tactics of buyers trained in formal negotiation
Budget limitation tactic Take-it-or-leave-it tactic Let’s-split-the-difference tactic “If . . . .then” tactic “Sell low now, make profits later” tactic
Buyer Anxiety can be due to:
Loss of options
Fear of making a mistake
Social or peer pressures
Emotional stress
Closing Clues
Verbal cues: questions, recognitions, requirements
Nonverbal cues: facial expression, prospect nods, leans, examines product literature intently
Types of specific closing methods
Trial close, Summary-of-benefits, Assumptive, Special concession, Multiple options, Balance sheet, Management, Direct appeal, Combination
Trial close
Made at opportune time
Assumptive Close
Subtle way to ask for decision, assuming customer will buy
Comes near the end of the presentation
Direct Appeal Close
Ask for the order in a straightforward manner
Summary of benefits close
Reemphasize value-added buyer benefits - then ask
for the order
Special concessions close
Extra incentive for acting now
Sample inducements
Multiple Options Close
Present several options to customer
Balance Sheet Close
Outlines reasons to buy and not to buy
Management Close
Involve senior executives or sales manager
Impending event close
Requires knowing the needs of the prospects well enough to turn their objections into your selling points
3 parts of customer service
Follow-through on promises/assurances
Follow-up with on-going communication
Expansion selling for additional solutions and needs
Customer Attrition Causes
50%-70%: poor service
12%-15%: product dissatisfaction
10%-15%: price
6 strategies for handling complaints
Let customers disclose feelings Carefully listen to customer It doesn’t matter whether the complaint is real or perceived Do not alibi or blame others Share your view of problem’s cause Decide on action to remedy
Full-Line Selling
Suggest related products/services to customer
Provides value-added service
Guidelines for Full-Line Selling
Plan during pre-approach
First satisfy primary need
Suggest products to build bundle
4 benefits of bundling
Customer receives added value
Complementary products and services
Generates additional revenue
Difficult for competitors to overcome
Cross-Selling
Selling products not related to those already sold to established customer
Buyers like single-source convenience
Most effective when salesperson/customer enjoy true partnership
Up-Selling
Effort to sell better quality product
