You are on page 1of 73

Prof. A. K.

Biswas 1

Market Opportunities Competitor and
Understanding Understandin
Customer Value & g
Segmenting Customers Competitor
Understanding Understandin
Market & Marketing g
Environment Company
Prof. A. K. Biswas 2

Developing Competitive
Marketing Strategy

Value Proposition,
Positioning Strategy

Developing &
Market Offering:
Product & Price
Designing and
Marketing Channels
Prof. A. K. Biswas 3

Biswas 4 . K.FRAMEWORK OF MARKETING Communicating Market Offering Personal Selling Managing Long Term Customer Value Managing and Measuring Marketing Effort Prof. A.

A.Prof. K. Biswas 5 .

 The actual art of selling has little to do with specific features or products and much more to do with the art of persuasion. K. A. What Is Selling? Essentially. Prof. All occupations require selling skill. Biswas 6 . selling is the process of persuasion.

Biswas 7 . Prof. K. What Is Personal Selling? Personal selling is defined as selling that involves a face-to-face interaction with customers. A.

When Personal Selling Is Important?  In general.  When the products/services are complex and the customers require technical support. K. Biswas 8 . Prof. A.  When customers prefer closer working relationships with suppliers. when there are few customers. when each customer purchase products and services in large quantities.  Furthermore.

Biswas 9 . A. Four Approaches To Selling  There are four distinct ways to sell:  Transaction Selling  Systems Sales  Key Account Management  Strategic Account Relationships Prof. K.

Biswas 10 . asking for orders. convenience. A. Prof. K.  The product is often purchased on the basis of physical attributes. making presentations. Transaction Selling  Transaction selling involves salespersons calling on customers.  The sale is either a one-time exchange or one transaction in a continuing series of exchanges. and making after-sale calls. availability. or price.

A.  The system consists of separate pieces. Prof. Systems Sales  The selling of complex systems require that the transaction approach is supplemented by more concern for customer benefits and integration of system components. Biswas 11 . supplies. parts. K. and services. including individual equipment.

A.) of the supplier become involved in the sales12 Prof. Biswas . in which several departments of functional areas (applications engineering. K. field service. design. etc. Systems Sales The systems sale necessitates the introduction and development of new sales techniques such as team selling.

K. but the heart of the activity remains the sales transaction. Prof. Systems Sales The systems sales differs in size and complexity from the transaction sale. Biswas 13 . A.

across the customer base. not all customers are equal: some customers are more valuable than others. K. Prof. Key Account Management  Senior management in many corporations now realizes that. A. Biswas 14 .

Biswas 15 . A. Customer Potential And Customer Demands The Three Triangles Size of customer Large Medium Small Number of Total sales Amount of customers volume product & service customization Customer Customer potential demands Prof. K.

A. Biswas 16 . K. Key Account Management  The high current (and potential) volume (and profit) customers are the firm’s critical assets. yet they are more important to long-run survival and growth than many of the firm’s fixed assets. Prof.  They are not visible on the firm’s balance sheet.

Key Account Management  Both the high value of. K. Prof. Biswas 17 . this special set of customers suggests that they should be treated differently from the firm’s ‘average customers’.  This compelling rationale has led many firms to the development of key account management programs. and increased competition for. A.

Biswas 18 .  It provides for the development of more complete information and analysis of customer’s strategic realities. A. competitive threats. K. critical needs and buying processes. and optimizes the use of scarce resources. Key Account Management  The key account management both focuses the firm’s attention on those accounts that are especially important for its current and long-run future. Prof. and important supplier firm resources.

Prof. A. the major account responsibility typically rests with a key account manager.  Managers works with colleagues in other functional departments (including the sales force) as leaders in key account teams and have primary responsibility for the long-run health of the relationship. Key Account Management  In key account management. Biswas 19 . K.

 PresentationProf.  Better understanding and management of the key account. Benefits Of Key Account Programs For Supplier Firms  Improved understanding of the key account’s goals. and requirements.of K. A. Biswas a company20 .  Increased key account switching costs.

 Lower costs of securing input products. Benefits For Key Accounts  A single point of contact. Prof. Biswas 21 . K.  Enhanced value  Guaranteed delivery when capacity is short.  Long-term relationship. A.

Key Account Management  Key account management is expensive and difficult. not just a collection of advanced persuasion techniques. Biswas 22 . It can only be used for major customers. Prof. A.  It must be seen as a philosophy of customer commitment. It goes beyond selling and has laid the foundation for strategic account relationship.  Its essence is superior customer responsiveness based on outstanding support systems. K.

strategic K.  Joint product. cannot satisfy the evolving needs for some closer. which can be described asProf. with all of its opportunities and rewards. as well as significant investments and costs. A. more permanent vendor-customer relationships. Biswas account23 . and infrastructure developments have led to even more intimate buyer- seller relationships. service. Strategic Account Relationships  Key account management.

Prof. which enables sharing of intimate technological. design. which involves three forms of interdependence: financial. Biswas 24 . technological and/or design.  Intimacy. A.  Longevity. Strategic Account Relationships  Strategic account relationships must always be based on three attributes:  Importance. which is necessary to protect the intimacy. and operating information. and strategic. K. and to enable the partners to reap the financial rewards.

A.  The relative amount of vendor effort also increases as we move from transaction selling to strategic account selling. Appropriateness Of Different Sales Approaches  The transaction and systems approaches emphasize sales. K. Biswas 25 . Prof. while the key account and strategic relationship approaches emphasize the mutuality of long marriage.

Appropriateness Of
Different Sales

 Given the difference among
the four different sales
approaches in cost and impact,
it is appropriate to consider
which accounts and prospects
might be appropriate for each

Prof. A. K. Biswas 26

Appropriateness Of
Different Sales
The following factors should be
considered for this purpose:
Size of the customer
Sales potential of the customer
Profitability of the customer
Needs of the customer for
product and service
Vendor rewards beyond sales
volume and profits
Prof. A. K. Biswas 27

Customer Centered
 The purpose of business is
creation of customers at a profit.
 Customer being the most
important thing in business,
selling process must be centered
around the customer.
 A seller must, therefore, first
study the decision-making
process the customers go
through. Prof. A. K. Biswas 28

K. A. Biswas 29 . Customer Centered Selling  The key concept of Customer Centered Selling is to learn to analyze where your customers are in the decision cycle and assist in moving them through a decision.  In doing this you must must learn what tactics are appropriate for which part of Prof.

Biswas 30 .Customer Centered Decision Cycle Reconsideration Satisfaction Selection Acknowledgment Customer Investigation Decision Measurement Criteria Prof. A. K.

Biswas 31 . they have no problems either. A. the customers are convinced they not only have no needs.  In this stage of the cycle. Prof. K. Customer Centered Decision Cycle  Satisfaction stage represents the beginning of the customer decision cycle.

 In this stage the customer will admit that he does have particular problems but he does not want to do anything about these problems at this time. Customer Centered Decision Cycle  The acknowledgment stage represents the most critical element of the decision cycle. A. Biswas 32 . K. Prof.

K. A. Biswas 33 . Prof.  Two things keep customers paralyzed in the acknowledgment stage. Customer Centered Decision Cycle  According to some research done in US. about 80% of customers are in this stage.

they will feel no urgency of doing anything about it. K. Prof. A.  The second reason is the fear of change. If the customers do not perceive the problem as a big one. Customer Centered Decision Cycle  The first is the perceived size of the problem. Biswas 34 .

A. Customer Centered Decision Cycle  Often the small problems the customer was facing for sometime mount up until he becomes fed up and begins to look for alternatives.  Sometimes the problem that the customer has been living with somehow become unmanageable. Biswas .  This stage may be Prof. called decision35 K.

they make decisions based on problems. Prof.  Customers do not make decisions based on needs. they immediately move into criteria stage. the more the customers are willing to pay. Biswas 36 .  The bigger the need. the bigger the need. A.  The bigger the problem. K. Customer Centered Decision Cycle  Once the customers cross the first decision point.

Prof. K. Biswas 37 . is the measurement stage. consciously or unconsciously.  The measurement stage provides the customer with the opportunity to move from the vague to the specific. Customer Centered Decision Cycle  The next stage that customers go through in the decision cycle. A.

 First. Prof. Biswas 38 . In this stage. Customer Centered Decision Cycle  Next the customer moves to the investigation stage. he will methodically apply the list of criteria to each and every product under consideration. A. K. the customer is trying to accomplish two things.

Prof. Biswas 39 . various solutions are eliminated based on their ability to meet the prescribed criteria.  At this point in the cycle. K. Customer Centered Decision Cycle  The second task the customers accomplish in this phase of the decision cycle involves the degree to which they will shop out their selection. A.

K. Biswas 40 . Customer Centered Decision Cycle  At the selection stage of the decision cycle. A. the customer must be convinced that the selection he has made in fact addresses all his needs. Prof.

Biswas 41 . sometimes referred to as ‘buyer’s remorse'. Customer Centered Decision Cycle  The customer does not stay in the selection stage for long. Prof. A. The customer moves on and heads on to the reconsideration stage. K.

This process of persuasion is for those who do not necessarily want to be sold. Prof.  Customer Centered Selling process is designed to spell out every move a salesperson need to make to persuade a customer to buy his solution. Customer Centered Selling Cycle  Selling is the process of persuasion. Biswas 42 . K. A.

K. A. Biswas 43 .Customer Centered Selling Cycle Seller Maintenance Research Reconsideration Satisfaction Analysis Close Selection Acknowledgment Customer Investigation Decision Confirmation Solution Measurement Criteria Specification Requirement Prof.

K.  The first type of question that is used in the research stage is background probe. A. It is used to obtain basic information that will allow to learn about a customer’s current situation. Prof. Biswas 44 . Customer Centered Selling Cycle  At the research stage of the selling cycle the objective is to study the customer’s world.

Biswas 45 . K.  The analysis stage can be broken down to three steps which focus on three different types of probes that should be used in sequence. Prof. Customer Centered Selling Cycle  At the analysis stage is the one and only step where the problems are the main focus. A.

If they do. you must get the customer to identify or agree there is a problem. A. resist admitting a problem. Customer Centered Selling Cycle  Identifying Probes: When you are using this first probe.  Most customers. Biswas 46 . they often will not admit to the size of the Prof. early on. K.

 Once a problem has been established. Biswas 47 . Customer Centered Selling Cycle  Developing Probes: The way you develop a problem is to continue to ask questions about it. Prof. A. stop allowing your customers run away from it. This is done by using developing probes. K. You must learn to get the customer to look down the road a bit at his problems.  People do not look at the impact of many of their problems.

Ben Franklin Prof. a horse was lost For want of a horse. A. For Want of a Nail For want of a nail. a battle was lost For want of a battle. a war was lost And all that for want of a nail…. a message was lost For want of a message.. . K. Biswas 48 . a rider was lost For want of a rider. a shoe was lost For want of a shoe.

Prof. K.  The initials of each type of question give the acronym “SPIN”. Biswas 49 . Customer Centered Selling Cycle  Neil Rackham suggests four types of questions that provide a probing sequence which you can use in planning and executing calls to help you to meet your objectives at the research and analysis stage. A.

Customer Centered Selling Cycle SPIN selling is a technique involving a logical sequence of questions about situations. Prof. Biswas 50 . problems. implications. A. and need payoff that salespeople use to uncover the prospect’s implied needs and develop them into explicit needs. K.

Explicit needs are precise specifications of products and augmenting services that resolve the customer’sProf. K. and discomfort with current situations. Customer Centered Selling Cycle Implied needs are vaguely defined areas of discontent. the salesperson develop these implied needs into explicit needs. Biswas 51 . dissatisfaction. A. Through the spin questions.problems.

 This is the confirmation stage. K. but there should be a sense of urgency to make change. the customer should not only be ready for change. Customer Centered Selling Cycle  If the probing sequence has been performed properly. Prof. Biswas 52 . A.

Customer Centered Selling Cycle  If the customer says yes.ability A. The biggest benefit to trial closes is theirProf.  This step represents your first trial close. K. Biswas to flush out53 . you have to understand why the person does not want to move forward and chances are that you will have to move back to the analysis stage once again.  If the customer says no. you have been given the green light to move forward.

 The seller must parallel that position and work with the customer to determine what these requirements would be. Biswas 54 . A. Prof. Customer Centered Selling Cycle  Within the decision cycle. K. the customer quite naturally wants to begin figuring out what it will take to fix his existing problems.

Biswas 55 . K. Customer Centered Selling Cycle  The specification stage is important to the seller because when customers are unclear in communicating their buying criteria. A. they often expose the salesperson as well.  There are two steps at this stage:  Transfer the customer’s requirements over to specifications.  Commit the customer to these Prof.

 This can be done in an effective manner through the use of the concept of FABEC – feature. Customer Centered Selling Cycle  At the solution stage. Biswas 56 . you must tie your product/service recommendation carefully to customer’s needs. A. advantage. Prof. explanation. and confirmation. benefit. K.

K. Prof. and not the feature. are what your customer is using to base a decision on. Customer Centered Selling Cycle  Start with feature or features that address the customer’s most important criteria and stay in that prioritized order.  Bring out the advantage of each of the feature.  The benefit is the specific value to the customer. Biswas 57 . A. The benefits.

Worth By increasing your production output.500. Benefits Our machine will allow you to increase your production output over current levels. A. THE CUSTOMER CENTERED SELLING CYCLE [The Solution Stage] Focus of Sales Presentation Example Features and Advantages Our machine runs twice as fast as your current equipment. K.000.. Prof. Biswas 58 . our machine will enable your firm to increase annual revenue by Rs.

K. it is finally the time to close.  When closing.  The summary close process has four steps. Customer Centered Selling Cycle  With the solution presented. and confirmed. the goal is to close for the highest realistic level of commitment. Prof. explained. A. Biswas 59 .

Biswas 60 .  By confirming benefits. K. Prof. Customer Centered Selling Cycle  Step 1. Confirm Benefits: The first step of the summary close is one last check with your customer to find out whether your solution did everything that he said he wanted it to do. This step forces out any remaining objections which then can be handled appropriately. you are actually trial-closing the customer. A.

 How do you ask for commitment? Do it as simply as possible. K. Ask for Commitment: Your strategy here should be to close for the highest realistic level of commitment. Customer Centered Selling Cycle  Step 2. A. An example: “I would love to have your business. Biswas 61 .” Prof.

A. Discuss Logistics: With the commitment in hand. Prof. you must stay focused and work out the logistics to implement the sale you have just made – for items like delivery. and follow-up. K. Biswas 62 . Customer Centered Selling Cycle  Step 3. training.

Biswas provide all63 .  Reassure him that he has made a wise decision and your company wouldProf. K. Reassure the Customer:  The solution you have recommended may very well cost more than he is already paying. Customer Centered Selling Cycle  Step 4. A.

There are three steps which will help this process.  Review Logistics  Review the Solution  Review the Change Prof. A. Biswas 64 . which can be called Maintenance or Development Stage you need to monitor your sale. These are fairly generic and should apply to whatever solution you and your customer have agreed to. K. Customer Centered Selling Cycle  At this stage.

Prof.  Influence future decision criteria. Biswas 65 . K. do not maintain.  Generate leads and references. A. Customer Centered Selling Cycle  Five simple strategies at the Maintenance or Development Stage:  Develop.  Reassess your understanding of customer needs.  Document the good news.

 Think of negotiation as something which will only be effective after you have done the best possible job of selling. K. A. Prof. Sales Negotiation  Negotiation should never be a substitute for selling.  When you are selling you do not give anything away. Biswas 66 .

Prof.  Consequence issues are to be resolved by discussion and confidence building. Negotiate late. Sales Negotiation  Don’t negotiate early in the selling cycle.  Don’t try to negotiate your way out of consequence issues or non-specific concerns. Biswas 67 . not by bargaining and negotiation. K. A.

A. Biswas 68 . Prof. Sales Negotiation  Focus on areas of maximum leverage: Understand customer decision criteria to focus on areas other than price where you have negotiating leverage. K.

Refine your upper limit in terms of customer expectation and competitive strength. K. Prof. A. Sales Negotiation Establish and narrow your negotiating range: Set your upper and lower limits. Biswas 69 .

Start at or near the top of your range. A. Prof. making concessions in increasingly smaller increments until you reach an agreement. Biswas 70 . K.Sales Negotiation Refine your lower limit in the same way so that you may arrive at a realistic negotiating range.

Sales Negotiation Separate understanding from agreement: Throughout the negotiation. A. continually test and probe that both parties clearly understand the areas of agreement and disagreement. Biswas 71 . Prof. K.

It is much earlier to deal with misunderstanding before the agreement than afterward when an angry customer feels cheated. K. Prof. A. Biswas 72 . Sales Negotiation Never allow misunderstandings to persist: Never be afraid to probe and explore areas where the customer may have misunderstood what you are offering.

K. Biswas 73 . A.Prof.