7

Product-Selling Strategies
That Add Value
Learning Objectives

When you finish reading this chapter, you should be able to

1.Describe positioning as a product-selling strategy
2. Explain the 3D product solutions selling model
3. Discuss product positioning options
4. Explain how to sell your product with a price strategy
5. Explain how to sell your product with a value-added
strategy
Product Positioning—In a Competitive Marketplace
•Positioning involves the decisions, activities, and communication
strategies that are directed toward trying to create and maintain a firm’s
intended product concept in the customer’s mind.

•Essentials of product positioning.

1. Salespeople make important contributions to the process of product
positioning.
2. Emphasis is placed on positioning the product with a value-added
strategy
Salesperson’s Role in Product
Differentiation
Differentiation refers to your ability to separate yourself,
your product, and/or your company from that of your
competitors. It is the key to building and maintaining a
competitive advantage.

•Companies differentiate their products from competitors on the

basis of quality, price, convenience, economy, or some other
factor.
•Salespeople play a key role in helping to differentiate products.
•Custom-fitting and communicating the value proposition. A
value proposition is the set of benefits and values the
salesperson promises to deliver to customers to satisfy their
needs
•Salespeople must quantify the value proposition
John Francis "Jack" Trout was an
American advertising executive
and an owner of Trout & Partners,
a consulting firm. He was one of
the founders and pioneers of
positioning theory and also
marketing warfare theory
The Three-Dimension (3-D) Product
Solutions Selling Model
Ted Levitt, former editor of the Harvard
Business Review, says that products are
problem-solving tools. People buy products if
they fulfill a problem-solving need.

Theodore Levitt was a

German American
economist and a professor
at the Harvard Business
School. He was editor of
the Harvard Business
Review, 
Today’s better-educated and more demanding
customers are seeking a cluster of satisfactions.
Satisfactions arise from the product
itself, from the company that makes
or distributes the product, and from
the salesperson who sells and
services the product
Figure 7.1 provides a description
of The Three-Dimensional (3-D) Product
Solutions Selling Model.

The 3-D Product Solutions Selling Model

illustrates the product, company, and
salesperson features available to satisfy the
customer’s potential 3-D cluster of satisfactions
 Table 7.1 Competitive Analysis Worksheet

Attributes My Company Competitor A Competitor B

Product
Company
Salesperson
Salespeople who are knowledgeable in all areas of the 3D Product Solutions Selling
Model are better able to position their product solution. This knowledge also helps to
achieve product differentiation, understand the competition, and prepare an effective
value proposition. The competitive analysis worksheet shown in Table 7.1 can help you
discover ways to position and differentiate your product as the superior choice over your
competition

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Figure 7.2 New versus Mature
Product-Selling Models
New/Emerging Products Mature Products
Develop new expectations Emphasize brand superiority
Change habits Emphasize company superiority
Establish new standards Point out unique features
Build product desire Provide quality customer service
Create new markets Sustain existing market share

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When Brother International Corporation introduced its line of Multi-Function Center
(MFC) machines, the goal was to convince buyers that one machine could replace five
separate machines.

However, before buyers would give up their copy machine, fax machine, laser printer,
and other machines, they asked some hard questions.

Is a multifunction machine reliable?

Does the quality match that of the current machines?

Finding the best machine for each customer is challenging because Brother offers more
than 10 different MFC models from which to choose
 Selling Products with a Price Strategy

Transactional selling tactics that emphasize low price.

Basic strategy is meeting the competition.
Salespeople can alter (lower base price) through the use of discounts.
Types of discounts and allowances:
Quantity discount—lower price for purchasing in multiple units.
Seasonal discount—price changes over time to match changing demand.
Promotional allowances—price reduction for participation in advertising or a sales support program.
Trade or functional discounts—channel intermediaries, such as wholesalers, often perform credit,
storage, or transportation services.
Before A Low-Price Approach, Ask…

 Are you selling to high or low-involvement buyers?

 How important is quality in the minds of buyers?
 How important is service?

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Before A Low-Price Approach, Ask…
 Are you selling to high Some people are emotionally
or low-involvement involved with respected brands
such as BMW, Sony, and
buyers? Macintosh computers. A part of
 How important is their identity depends on buying
the product they consider the best.
quality in the minds of
buyers? Low-involvement buyers
care mostly about price
 How important is
service?

7-13
Before A Low-Price Approach, Ask…

 Are you selling to high

or low-involvement
buyers? If buyers do not fully understand
the price–quality relationship, they
 How important is may judge the product by its price.
quality in the minds of
For a growing number of
buyers? customers, long-term value is more
 How important than short-term savings
important is
that result from low prices.
service?

7-14
Before A Low-Price Approach, Ask…
 Areyou selling to
high or low-
involvement buyers?
For many buyers, service is a critical factor. Even
 How important is online customers, thought to be very interested in
quality in the minds price, rate quality of service very highly.
This is especially true in business-to-business
of buyers? sales. A survey conducted by Accenture reports
that 80 percent of nearly 1,000 corporate buyers
 How important is rate a strong brand and reliable customer service
service? ahead of low prices when deciding which
companies to do business
with online

7-15
 Figure 7.3 The Value-Added Product-Selling Model

Most high-performing salespeople have adopted sales strategies that emphasize value-added selling.
Salespeople can add value to their product with one or more intangibles:

with improved insights and knowledge of customer needs, products benefits, and competitive offerings;
stronger relationship and partnership building;
better use of sales technologies;
more dependable product deliveries;
better service after the sale; and Innovations that truly improve the product’s value in the eyes of the
customer.
Figure 7.3 The Value-Added Product-Selling Model

To understand fully the

importance of the value-
added concept in selling,
and how to apply it in a
variety of selling
situations, it helps to

visualize every product as

being
four dimensional.
Figure 7.3 The Value-Added Product-Selling Model

The Value-Added Product-

Selling Model is made up of
four “possible” products:
1. the generic product,
2. the expected product,
3. the value-added product,
and
4. the potential product
(Figure 7.3).
 Generic Product—the starting
Point
The generic product is the basic, substantive
product you are selling.

Generic product describes only the product

category, for example,
• life insurance,
• rental cars, or
• personal computers.
• Every Ritz-Carlton hotel offers guest
• rooms, one or more full-service
restaurants, meeting rooms, guest parking,
and other basic services.
Generic Product—the starting Point

For Yellow Freight System, a

company that provides shipping
services, the generic product is the

truck and trailer that moves the

customer’s freight
 Generic Product—the
starting Point
Nordstrom provides categories
of goods traditional to an
upscale specialty-clothing
retailer.

Nordstrom, Inc. is an American luxury department store chain. Founded in 1901

by John W. Nordstrom and Carl F. Wallin, it originated as a shoe store and
evolved into a full-line retailer with departments for clothing, footwear, handbags,
jewelry, accessories, cosmetics, and fragrances
Generic Product—the
starting Point

The generic products at a bank

are money that can be loaned
to customers and basic
checking account services.

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 Expected Product –
Understanding the Customer’s
Perceived need
Every customer
Generic Product Expected Product
has minimal
purchase Every Ritz-Carlton hotel offers Ritz-Carlton salespeople must offer not
guest rooms, only a comfortable guest room but also a
expectations that clean one. Some customers expect a “super”
exceed the clean room
generic product
For Yellow Freight System, truck Yellow Freight System salespeople must
itself. and trailer that moves the customer’s provide clean, well maintained
The expected freight trucks and well-trained drivers.
product is
everything that Nordstrom provides categories of The customer at a Nordstrom store expects
represents the goods traditional to an upscale specialty- current fashions and well-informed
customer’s clothing salespeople.
minimal retailer.
expectations.
Value-added Product—
maximizing your Customer’s
satisfaction

The value-added product exists

when salespeople offer customers
more than they expect and may not
even know exists.

Among the most important factors that

contribute to the value-added product is
the overall quality of employees with
whom the customer has contact. Sales
and sales support staff who display
enthusiasm and commitment to the
customer add a great deal of value to the
product
Value-added Product— When you make a reservation at one of the
maximizing your Customer’s Ritz-Carlton hotels and request a special
satisfaction amenity such as a tennis lesson, a record of this
request is maintained in
the computer system.

If you make a reservation at another Ritz-Carlton

at some future date, the agent informs you of the
availability of a tennis court.

The guest who buys chocolate chip cookies in

the lobby gift shop in New Orleans may find a
basket of them waiting in his room in Boston
two weeks later.

The hotel company uses modern technology to

surprise and delight guests
Potential Product—
Building long-term Partnerships

After the value-added product has been

developed, the salesperson should begin to
conceptualize the potential product.

The potential product refers to what may

remain to be done, that is, what is possible.
As the level of competition increases,
especially in the case of mature products,
salespeople must look to the future and
explore new possibilities.
 Value Creation Product Strategies for Transactional,
Consultative, and Strategic Alliance Buyers

In most cases, value creation investments during the

transactional sale are minimal.

Emphasis is usually placed on finding ways to eliminate any

unnecessary costs associated with the sale and avoiding delays in
processing the order.

Technology investments can sometimes play a big role in

improving efficiencies. For example, customers may be encouraged
to order products online.
Consultative selling emerged in the late 1960s and early 1970s
(see Table 2.1) and is an extension of the marketing concept
Major features of consultative selling:
1. The customer is seen as a person to be served, not a prospect to be sold.
2. The salesperson doesn’t use a high-pressure sales presentation; two-way
communication identifies (diagnoses) customer’s needs.
3. Consultative selling emphasizes need identification, problem solving, and
negotiation rather than manipulation.
4. Consultative selling emphasizes service at every phase of the personal selling
process.
 Value Creation Product Strategies for Transactional,
Consultative, and Strategic Alliance Buyers

A considerable amount of value creation takes place in consultative sales.

Higher investments in value creation are permitted because companies need to

invest in developing a good understanding of the customer’s needs and problems.

This is especially true in large, complex sales. The opportunity to create custom-
tailored solutions and deliver more real benefits to the customer provides the
opportunity for high margins.
 Value Creation Product Strategies for Transactional,
Consultative, and Strategic Alliance Buyers

•Strategic Alliances – The Highest Form of Partnering.

1.The goal of strategic alliances is to achieve a marketplace advantage by teaming up with
another company.
2.Partnering is enhanced with high ethical standards.
3.Partnering is enhanced with customer relationship management (CRM).
 Value Creation Product Strategies for Transactional,
Consultative, and Strategic Alliance Buyers
Value creation investments in strategic alliance sales are the highest.

As noted in Chapter 2, strategic alliances represent the highest form of partnering.

Building an alliance is always preceded by a careful study of the proposed partner.

Creating value often requires leveraging the full assets of the company, so
investments go well beyond the sales force.

Alliances are often developed by a team of specialists from such areas as finance,
engineering, and marketing.

A proposed alliance may require investments in new technology, manufacturing

facilities, and warehouses.
ICICI Bank and Vodafone India: A strategic
alliance example in India is of ICICI Bank,
India’s largest private sector bank and Vodafone
India, one of India’s largest telecom service
providers, entered into a strategic alliance to
launch a unique mobile money transfer and
payment service called ‘m-pesa’.
Several successful strategic alliance examples

•Uber and Spotify. ...

•Starbucks and Target. ...
•Starbucks and Barnes & Noble. ...
•Disney and Chevrolet. ...
•Red Bull and GoPro. ...
•Target and Lilly Pulitzer. ...
•T-Mobile and Taco Bell. ...
•Louis Vuitton and BMW.