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NEGOTIATION Lecture 5:Lecture 5:

HOW TO SELL YOUR IDEAHOW TO SELL YOUR IDEA

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NEGOTIATIONTopics covered in this lecture:

1. Business name and image

2. Advertising message and media selection

3. Generating new customers

4. Building customer relationships

5. Setting the right price

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NEGOTIATIONSelecting the right name for the company has many considerations:You need to analyse why people buy from you: cheaper, local, guarantees, low

maintenance – all rational considerationsDo people also buy because the product/service is better, looks good, high quality

service, believed to be reliable, value, excellent design – all emotional considerations.

If in a crowded marketplace, products need to make people feel good and enhance your reputation.

The image must sit within and be fully supported by the product or service. The product must match the marketing and advertising claims.

The company/product/service name must summarise rational and emotional feelings of its target customer base.

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NEGOTIATION Tips on choosing a name: Made up words can make good product/business/service names – while they may not

arouse positive feelings they are unlikely to create negative ones Brainstorm names with friends, relatives, clients, colleagues Using existing words - check them out with potential buyers to test reaction Check your preferred name is not already in use, available and usable legally Check the mean of your name – is it offensive in another language or with other

groups, if it is to be sold outside the UK Make it uncomplicated, can it be easily spelled, guessed and found Capitals and acronyms sometimes work well Does it sit well with the image and market position Be sure of the legalities in creating a name

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NEGOTIATIONBranding and image building

Maintain a corporate image throughout all visual and aural representations of the business

Font size, type and colour

Logos – again check the legalities of producing the logo

Stationery – business cards, letterheads, continuation paper

Staff – casual, suits, corporate clothing

Answering telephone – consistent approach and response

Customer service matches that promoted in the image and branding of the business/service/product.

Quality of corporate branding materials -

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NEGOTIATIONGenerating response: Use eye catching headlines that captivate attention and encourage people

to read on/continue to listen – and learn more Offer some incentive for making contact with you: samples, fact sheet,

exhibition invites, further information …….. Offer a discount as an opening offer or first time try Highlight strong and specific benefits Always end with an action point – what must the target customer do to

make contact, get the discount, get the incentive, purchase the product Some businesses add a code and ask them to quote it (in order for the

business to measure response)

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NEGOTIATIONDirect response advertising – the strategy should aim to move the potential customer from

ignorance of your product to knowledge and decision to purchase

It should: Get attention for your product Help them understand your product or service Get them to believe in the benefits Establish a desire for the product Stimulate or generate an action Improve the reputation and general impression of the product/service/business

This cannot be achieved all at once, different campaigns should have its own strategy and produce different results from the above list.

Trying to achieve this all in one campaign will confuse and dilute the specific objective

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NEGOTIATIONGetting the message across – content and mediaTwo main constituents – long term relationships and specific message Define the target market through research and establish their characteristics, numbers,

spending power, class structure (consumer), sector (business) Establish most cost-effective route to reach the purest and largest numbers Cost issues have to balance with targeting – the cost of communication has to be

measured by what you have to spend to reach each potential customer, or the number of sales leads each pound spent generates

Will the message be written or oral, or both? Is the message implied? There is no specific message but does the quality and design

of your business presentation materials give the right signals about the reliability, quality, excitement – rational and emotional considerations of target customer.

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NEGOTIATIONMedia selection – the media selection must respond to market research on how the target customer base spends its

leisure time and consumes information …. what they enjoy, read, watch, listen to …..

Local newspapers and directories Technical of special interest magazines Local radio, television or cinema Local shops, pubs and entertainment/leisure venues National newspapers and magazines Reference handbooks and trade directories Internet – search engines and websites Public relations – sending media releases to target media for free coverage

A small business would have to consider six main things: which newspaper/magazine; what size or position of ad; content of ad; timing of advertising; frequency of advertising; how to get the ad produced/recorded/drawn up.

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NEGOTIATIONGetting new customers – generating new business

Direct Mail – compile your own list or purchase mailing lists. Make sure it is up to date, is ‘cleaned’ regularly to update details, is well targeted, but expect a very low response ½% is average, but this can be raised to substantially higher percentage with a strong offer, action point and a follow-up telesales call. Direct Marketing Association say this and other factors can boost response to between 25-40%

Envelope size, shape and colour – make it stand out from other mail. Check direct recipient is decision-maker and able to make the purchase. Direct mail insert – visually stimulating; offer, benefits and action needed is clear. Telephone sales – research company and contact well; try an initial form of contact (email,

mailer, letter) before the call; ensure offer is of interest to respondent; have a strong and customer-focussed opening; build the sales call with succinct details and benefits of the product/service; close the sale with a telephone order/face to face sales appointment/further action such as exhibition invite/demonstration/send more info.

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NEGOTIATION Face to face selling – generate people to see by following leads (information passed Face to face selling – generate people to see by following leads (information passed

on by other people, enquirers, exhibition visitors); using referrals getting people to on by other people, enquirers, exhibition visitors); using referrals getting people to recommend potential targets; qualifying potential customers (researching possible recommend potential targets; qualifying potential customers (researching possible individuals and purchasing groups).individuals and purchasing groups).

Know the main features of your product; major benefits and offers; most likely objections and how to overcome them, advantages and weaknesses of competitors/competitive products.

Research and establish the needs of the potential client: rational and emotional Build rapport and focus on the client needs, addressing them with your products/services. Ask lots of questions and listen carefully to their responses, so that you can match their needs

with your products/services and introduce any special conditions that might need meeting. Asking for the business and establishing the next action points necessary to complete the sale –

timing, quantity, cost, delivery, demonstrations, samples further meetings; additional personnel to make contact with and/or meet.

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NEGOTIATIONBuilding customer relationships:

Customer care and after sales service Establishing new products and services Meeting delivery requirements and response times Handling complaints effectively and reducing future repeats Forming clubs, groups, ways of belonging and feeling special Responding to new customer needs Constant market research to establish changes in market and clients Gathering useful data for business and client, researching from this Introducing new products, offers and repeat purchases Working with client base on new product/service developments

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NEGOTIATIONPricing products and services- Setting prices should involve the following considerations: Overall the price should sit within the overall market expectation – what competitors are charging

and what target customers are currently paying for their products or services Where in the market you are positioning yourself: top/middle/bottom What market position you currently hold How you are promoting your image an quality How your product compares to competitive products What price conveys to your customers – what your pricing policy tells them about the quality of

product and service The life-cycle of the product – is it new and commanding a higher price, or is it mature,

widespread and has established a lower price after settling in the market What is the lowest you can charge and the highest you can charge taking into account business

overheads and market factors? Is there room for negotiation?

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NEGOTIATIONAnalysing setting prices – guide to setting prices Analyse the position you hold in the market. Do your customers look for reliability? Has your

product already established its image, do buyers view it as good quality, prompt service, stylish …

Analyse your product. Are you planning modifications or alternatives which could alter its reputation or relative market position?

Analyse the competition. How do their products rate against yours? What is the relative price structure in the market?

Decide your pricing strategy. Where in the price range will you pitch your price, is it going to be average, 5% less than average, 5% above average, or a premium price of say 25% above average?

Choose some specific prices: estimate volume of sales, profit margin, and costs to forecast the level of profits for each price.

Choose your price. Would you be able to test-market the price in a small area of your market? Would this help gauge customer reactions?

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NEGOTIATIONOnce again – the information is not exhaustive.

However, this lecture should at least identify main considerations for: developing your marketing and advertising strategy establishing how and where you can communicate with your target

customers what considerations you should make in adopting an effective pricing

policy.

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NEGOTIATION

Tutorial workshopTutorial workshopStudy the handout on Vivid Imaginations: After the company has been bought

back by the original owners, they decide to re-launch the company. Working in your groups:

Review how pricing will be determined Put together a re-launch marketing/advertising package Decide on whether a new name is necessary and why Devise a strapline – i.e. Beanz means Heinz Devise an marketing/advertising message Select media appropriate for advertising