Chapter 11 Strategic Understanding of Your Company, Products, Competition, and Markets PowerPoint presentation prepared by Dr. Rajiv Mehta

Chapter 11Chapter 11

Strategic Understanding of Your Company,

Products, Competition, and

Markets

PowerPoint presentation prepared byDr. Rajiv Mehta

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 11 | Slide 2

Chapter OutlineChapter Outline

• Strategic understanding of your company

• Strategic understanding of your products

• Strategic understanding of your competition

• Strategic understanding of your markets


Learning ObjectivesLearning Objectives

After reading this chapter, you should understand:

• Why in-depth knowledge about your company, products, competition, and markets helps you become a more successful salesperson.

• How to evaluate your firm’s competition.

• Various sources of information and their potential uses.

• The growing professionalism in purchasing and its impact on personal selling.

• How to keep current on product developments, competitors, and markets.

Royalty-Free, Digital Vision/Getty Images


Strategic Understanding Strategic Understanding of Your Company of Your Company cont’dcont’d

• Company History

• It provides perspectives and insights that will serve the salesperson well through his or her career.

• Company Growth and Development

• The company's record of growth in sales, market share, profits, and new products are often questions asked of salespeople by prospects and customers.

• Company history, organization, mission statement, culture, philosophy, goals, objectives, strategies, tactics, policies, and procedures are among the first thing taught to sales trainees

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• Organization Structure

• New salespeople can learn a great deal about how management views the sales force by studying the sales force organization's structure — geography, product, function, markets, or some combination.

• Mission Statement

• Sets forth in writing the organization’s orientation, goals, basic values, and sense of purpose.

• Culture

• A set of formal or informal values, norms, morals, attitudes, beliefs, customs, and behaviors that establish the code of conduct for a group of people or an organization.




• Goals and Objectives• It outlines the long-run goals

(qualitative) and short-run objectives (quantitative) that the organization seeks to achieve.

• Strategies and Tactics• A strategy is a total program of

action for using the resources to achieve a goal

• A tactic is a short-run, specific action that is part of the larger strategic plan

• Policies• The predetermined decisions for

handling recurring situations efficiently and effectively

Chapter Review Question:Why is it important for salespeople to understand their company’s culture

and that of the sales department? How would you suggest that a salesperson quickly learn about the culture of his

or her company and department?

© Royalty-Free/CORBIS


Strategic Understanding Strategic Understanding of Your Productsof Your Products

• Studies consistently show that the most effective salespeople tend to have the greatest knowledge about their own company's and their competitors' products

• Salespeople should have the following knowledge about their products:

• Where does the product come from? • Where is it mined, grown, assembled, or

manufactured?

• How does it get shipped to the present location?

• Does shipping significantly affect its quality or price?

• Who designed the product? • How is the product made?

• What kind of machines produced it? Royalty-Free, Photodisc/Getty Images


Strategic Understanding Strategic Understanding of Your Products of Your Products cont’dcont’d

3. How should the product be used? • What are the manufacturer recommendations regarding care and

maintenance?

• What can be learned from other customers who have used the product?

• Are there any special features or advantages that distinguish this product from competitive products on the market?

4. What kind of guaranty or warranty does the company offer on the product? • What kind of repair and maintenance service does the company provide?

• Does the company have a service department or service centers?

• Where are they located?

5. What happens if a product is broken in delivery? • Is the customer protected?

• What is the procedure for returning the product if it proves unsatisfactory?


Products from the Products from the Customer's PerspectiveCustomer's Perspective

• Customers are trying to solve problems; they are benefit or profit-oriented

• For example, customers who buy a laser printer and an electric drill are looking for the benefits of neat, professional looking reports and neat, round holes



Selling Multiple ProductsSelling Multiple Products

• Product knowledge problem is compounded when salespeople must handle several product lines



Interaction with Other ProductsInteraction with Other Products

• Salespeople must know how products work together with other products, including those of other companies



Knowledge About Product ServiceKnowledge About Product Service

• Post-sale service is an important part of the total product being considered for purchase by customers, so salespeople must be thoroughly informed about what customer services their customers expect and their companies offer



Table 11.1 Requisite Product Table 11.1 Requisite Product Knowledge of Professional SalespeopleKnowledge of Professional Salespeople


Table 11.2 Product Table 11.2 Product Knowledge WorksheetKnowledge Worksheet


Strategic Understanding Strategic Understanding of Your Competitionof Your Competition

• The Thomas Register is an excellent source of information about your competition

• Salespeople must know the features, advantages, and benefits offered by competitive products to sell the FAB of their own products



The Thomas Register The Thomas Register of National Manufacturersof National Manufacturers

• The Thomas Register (www.ThomasRegister.com) is the primary source of locating suppliers for most Fortune 500 companies

• Published annually, it provides information about 170,000 manufacturers of product categories, specific products, names of the companies, branches, top executives and their job titles, affiliation data, and credit rating

Chapter Review Question:What is the Thomas Register? How might

salespeople use it?

http://www.thomasregister.com/


Competitive Analysis WorksheetCompetitive Analysis Worksheet

• A Competitive Analysis Worksheet (CAW) summarizes information on competitors—products they sell, competitive advantages and disadvantages, major customers, products that each customer buys and for what use, names of competitive salespeople, and their estimated sales volume

• A CAW is a helpful guide for salespeople in making comparisons with competitive products



Table 11.3 Competitive Table 11.3 Competitive Analysis WorksheetAnalysis Worksheet


Strategic Understanding Strategic Understanding of Your Markets of Your Markets cont’dcont’d

• Where are your company’s present and future markets?

• How and why are these potential markets changing?

• Who are and will be its customers?

• Economic, technological, political-legal, cultural-social, and competitive environments trends.

• Anticipating and adjusting to changes in the environment. Chapter Review Question:

Why is it critical that salespeople understand their company and their company’s products, competition, and markets? How

might salespeople acquire this understanding?


Table 11.4 Companies Slow to Recognize Table 11.4 Companies Slow to Recognize Opportunities in Markets They DominatedOpportunities in Markets They Dominated


Keeping InformedKeeping Informed

• Successful salespeople stay well informed about the industry they serve and about business in general

• An abundance of information about prospects and companies is prepared by financial companies such as Dun & Bradstreet, Standard & Poor’s, and Value Line



Keeping Informed Keeping Informed cont’dcont’d

• Salespeople should regularly review data and articles in the following publications:

• Dun & Bradstreet's Million Dollar Directory (www.dnb.com)

• Business Periodicals Index (www.silverplatter.com/catalog/wbpi.htm)

• Business Week (www.businessweek.com)

• Wall Street Journal (www.wsj.com)

• Forbes (www.forbes.com)

• Fortune (www.fortune.com)

• Standard & Poor’s (www.forbes.com)

• Value Line (www.valueline.com)

Chapter Review Question:What are some of the off-line and online sources through which

salespeople can find information to help them better serve customers?


http://www.dnb.com/

http://www.silverplatter.com/catalog/wbpi.htm

http://www.businessweek.com/

http://www.wsj.com/

http://www.forbes.com/

http://www.fortune.com/




http://www.valueline.com/


Table 11.5 Source of InformationTable 11.5 Source of Information


Table 11.5 Source of Information Table 11.5 Source of Information cont’dcont’d
















Understanding Professional BuyersUnderstanding Professional Buyers

• Professional salesperson not only understand their customer’s needs but the needs of the customer’s customers as well

• Salespeople also need to know how their products and services fit with the buying organization, e.g., the customer’s strategy, objectives, and goals



Professional Knowledge Is EssentialProfessional Knowledge Is Essential

• The major attributes that buyers want in professional salespeople include:

• Thoroughness and follow-through

• Knowledge of product line• Willingness to go to bat for

buyer within the supplier's firm

• Market knowledge and willingness to keep the buyer informed

• Imagination in applying products to the buyers' needs

• Knowledge of the buyer's product line

• Diplomacy in dealing with operating departments

• Preparation for well-planned sales calls

• Regularity of sales calls

• Technical education

Chapter Review Question:Name the ten attributes that industrial buyers say they like in salespeople.


Key TermsKey Terms

• Mission Statement• Sets forth in writing the organization’s orientation, goals, basic values, and

sense of purpose.

• Culture

• A set of formal or informal values, norms, morals, attitudes, beliefs, customs, and behaviors that establish the code of conduct for a group of people or an organization.

• Strategy• A long-run total program of action for using resources to achieve an

overall goal.


Key Terms Key Terms cont’dcont’d

• Thomas Register• The primary source that most Fortune 500 companies use to locate

suppliers. Published annually, it provides information about 189,000 manufacturers regarding product categories, specific products, names of the companies, branches, top executives and their job titles, affiliation data, and credit rating.

• Business Periodicals Index• A cumulative subject index that lists business articles from more

than 160 periodicals .

• Tactic• A short-run, specific action that is part of the larger strategic plan.


Topics for Thought and Topics for Thought and Class DiscussionClass Discussion

1. In what ways might the company’s stakeholders, other than customers, affect personal selling?

2. If you were a new sales trainee about to start a two-week training program, what instructional methods would you prefer? Why?

3. Why do you think the role of company purchasing agents is expanding?

4. Do you think it’s necessary for salespeople to know nearly as much about competitive products as they do about their own company’s products? Or is it sufficient to know just the major strengths and weaknesses of competitive products? Why?


Topics for Thought and Topics for Thought and Class Discussion Class Discussion cont’dcont’d

5. Why do you think so many product innovations come from smaller companies instead of the most dominant company in the industry?

6. Name some off-line and online sources that you have consulted to find information. What information were you looking for? Were you successful in finding what you needed?


Internet ExercisesInternet Exercises

1. Assume that you have just been recruited to work as a sales representative for a large company that manufactures medical devices and implants such as hip replacement joints. You need to learn about the industry and your company’s competitors quickly. Using some of the appropriate resources, such as Value Line (www.valueline.com), Standard and Poor’s (www.standardandpoors.com), Dun & Bradstreet (www.dnb.com), and/or Morningstar (www.morningstar.com), as well as sources of information identified in Table 11.5, conduct an industry competitive analysis by finding the following information:

a. Total number of medical device manufacturersb. Total industry annual sales for all medical devices and implants over the

last five yearsc. Annual sales, market shares, profits, and earnings per share reported by

your company’s five major competitors over the last five yearsd. Number of employees and the locations/regions of the country in which

your company’s five major competitors operatee. Based on the information you find, describe the current industry trends.




http://www.standardandpoors.com/



http://www.dnb.com/

http://www.dnb.com/

http://www.dnb.com/

http://www.morningstar.com/




Internet Exercises Internet Exercises cont’dcont’d

2. As a follow-up to Exercise 1, to learn even more about your medical device and implant manufacturing company’s five most significant competitors, use the websites identified in the chapter or any other sources of information to find the following information:

a. Company profiles

b. Different product lines for medical device and implants manufactured by each competitor

c. Strengths and weaknesses of each competitor



3. Assume that you work as a salesperson for a Fortune 500 company that manufactures copy machines. You need to learn about the industry and your company’s major competitors. Using some of the appropriate resources, such as Value Line (www.valueline.com), Standard and Poor’s (www.standardandpoors.com), Dun & Bradstreet (www.dnb.com), and/or Morningstar (www.morningstar.com), as well as sources of information identified in Table 11.5, conduct an industry competitive analysis by finding the following information:

a. Total number of copy machine manufacturersb. Total industry annual sales for all copy machine over the last five

yearsc. Annual sales, market shares, profits, and earnings per share reported

by your company’s five major competitors over the last five yearsd. Number of employees and the locations/regions of the country in

which your company’s five major competitors operatee. Based on the information you find, describe the current industry

trends.







http://www.dnb.com/

http://www.dnb.com/

http://www.dnb.com/






4. As a follow-up to Exercise 3, to learn more about your copy machine manufacturing company’s five most significant competitors, use the websites identified in the chapter or any other sources of information to find the following information:

a. Company profiles

b. Different product lines for copy machines manufactured by each competitor

c. Strengths and weaknesses of each competitor


Projects for Personal GrowthProjects for Personal Growth

1. Contact two business-to-business salespeople and ask what their firms’ policies and procedures are for:

a. Processing special rush orders

b. Approving customer credit

c. Delivery and installation of products

d. Opening new customer accounts

e. Handling returned or damaged goods

2. Ask each of the two salespeople you contacted in your work on Project 1 to describe their company’s culture. Is their sales department culture different from their company’s overall culture? If so, why?


Projects for Personal Growth Projects for Personal Growth cont’dcont’d

3. Choose a company of interest to you, then use (a) a trade association directory, (b) a business guide, (c) an index, and (d) a government publication to learn as much as you can about the company’s history, mission, organization of the sales force, products sold, markets served, and major competitors. Which source(s) proved most helpful? Write a three-page report summarizing what you discovered about the company that would be important in selling to that company.

4. Choose a favorite product or service that you have recently purchased, and then prepare a product knowledge worksheet comparing the product you bought to three competitive products you might have purchased.


Case 11.1:Case 11.1:I’ll Cook His GooseI’ll Cook His Goose

1. How do you think Mr. Stoner perceived Beth Morelli’s sales presentation?

2. What do you think Beth should have done differently? Why?

3. How would you compete with a competitive salesperson like Bill Reilly?

4. What advice would you give Beth if Mr. Stoner calls her later? What should Beth do if Mr. Stoner doesn’t call her?


Case 11.2:Case 11.2: Gee, What Could Have Gone Wrong? Gee, What Could Have Gone Wrong?

1. What do you think Marty did wrong in his sales presentation?

2. Would Marty have benefited from using any sales aids? Explain.

3. What should Marty say to Mr. Burke when Marty calls back?

Case 11.2 is found online at http://college.hmco.com/pic/andersonps2e.

http://college.hmco.com/pic/andersonps2e





Documents

Chapter 11 Strategic Understanding of Your Company, Products, Competition, and Markets PowerPoint presentation prepared by Dr. Rajiv Mehta