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Effects of Product Value Compared to Personal Selling Outline Product: Price and Value Personal Selling and Product Value Adding Value to the Product Effects of Product Value Compared to Personal Selling Product: Price and Value For the vast majority of customer price of the product is not the most important factor when they consider a possibility of a purchase. This occurs basically because the customers tend to consider the marketing offering in general, and rarely make decisions based on the price of the product. In such a way, although price is quite important, it is only one of the variables taken into consideration while assessing product value and making decision concerning the possibility of a purchase. Value is usually related to the customer's perception of benefits received. As far as the factor of price still plays quite an important role, the pricing decision of a seller will affect the customer's perceived product value.
In order to simplify the discussion, the value can be calculated as follows: Perceived Value = Perceived Benefits / Perceived Price Paid At the same time, product value changes as the price is paid and perceived benefits received change. However, the price paid by the customer may involve not only financial aspects (as far as the customer may spend additional efforts or time to learn the product's functions, and to communicate with the seller, to mention a few). Now, there are several aspects that should be present in order to change the customer's perceptions. Firstly, the customer should be aware of the sellers product (offering).
Secondly, the customer should understand the product differentiating value. Thirdly, the customer should understand that a real product value is significantly greater than the alternative products (this may be achieved through cost differentiation or benefits). In such a way, all these factors have great impact on product value. Product value, therefore, is about customers perception, as the costs and benefits of the product are often perceived. For example, in case there are three sellers with three different products that have the same functions and an average value relative to the other sellers, the seller is likely to win about 1 / 3 of the product sales he competes for.
At the same time, in case the seller's product value is greater than his competitors', the seller is likely to win more than an average share (Weitz, Retailing Management, 2004). Now, different sellers try to increase product value in different ways, and personal selling is one of these methods used to improve the customers perception of the product (i. e. the benefits perceived from the using the given product, from the image of safety, confidence, power, or from the relationships the customer may have with the people in the sellers company, to mention a few). Personal Selling and Product Value Personal Selling (or direct selling) is usually referred to as a direct communication with the customer aimed to explain the customer will derive benefit from using the sellers products, as well as to explain how the sellers products will fit the needs and desires of the potential customer. To a certain extent, it may be said that personal selling is aimed to increase product value in the customers eyes (Weitz, Personal Selling: Building Relationships, 2004).
This allows coming to conclusion that product value has direct relation (and great influence) on the effectiveness of personal selling. Personal selling is a promotional method, where the seller uses various techniques and skills to make the customer confident, and to build personal relationships with the customer, that results in obtaining value. The customers perceived value is the perceived benefits from purchasing the sellers product, while the sellers value is usually realized through financial rewards (or percent) of sale. The components of product value depend on perceived benefits the customer gets from the purchase.
The benefits usually reflect product the customer received from the purchase, services the customer gets, relationships (with people in the sellers organization), and brand (as it may also be perceived as a benefit for the customer). Product implies fit (the perceived ease of use and adaptation), functionality, form (the ease of potential replacing the product purchased). Service implies the ease of obtaining service quality, the ease of doing business together, etc (Morgan, 2003). The relationships implies personal attitude and linkages to the seller and (or) people in the sellers organization. Finally, brand may also add value to the product, as it implies the fit of the manufacturer's brand image with the perceptions related to the product suitability and the perception of risk (for example, brand may add value to the product, as the customer may derive benefit of using reputable supplier, thus improving self-appraisal).
Adding Value to the Product Personal selling is usually organized in a way to add value to the product. Personal selling tends to approach as a helping and problem-solving situation, as far as the aim of personal selling in to convince the customer to make a purchase. Personal selling usually includes a sales presentation aimed to show the reasons for making a purchase, and to present the ideas of perceived product value in such a way to convince the customer making a purchase. Personal selling is organized so to build self-confidence, and to develop an atmosphere of trust and goodwill with the potential customer. The seller, therefore, plant a presentation to convince the customer about the benefits of purchasing, to promote benefits through the use of visual aids, and to develop an empathy and mutual trust. The advantages of personal selling include detailed and thorough demonstration or explanation of the product features and product value.
The suppliers sales message is changed in compliance with the customers interests of prospects and customers motivations. The seller is also ready to response to the customers objections concerning the product value, thus increasing probability of making a purchase (Clark, 2001). Sometimes product cost may be also changes (or varied and controlled), as the seller has a chance to adjust the size of sales force in one-person increments. Personal selling is also effective and important when the product value grows (due to high product cost). As far as product value expresses the customer's desire and willingness to obtain a product (to make a purchase), personal selling places high emphasis on personal communication with the customer to increase probability of making purchase (Preis, 2003). Therefore, personal selling is often associated with a consultative selling or relationship selling, as it implies not a one-time transaction or sale, but long-term interaction with the customers via mutually beneficial partnership.
As we have already mentioned, the product value also include the cost and the subjective part associated with the product cost. At the same time, it should be taken into consideration that the cost of the product may be quite high. And, as far as the potential customer's level of desire and willingness to purchase the seller's product depends on how much the product's performance and product details fit the value system of the customer, personal selling is designed so to convince the customer to make a purchase by convincing him that the product value is significantly higher than the product cost. References Clark, C. (2001).
Re contextualizing Sales Resistance: A Response to Hunt and Bashaw. Industrial Marketing Management, 30 (8), 637 - 643. Morgan, J. (2003). How Buyers Are Changing. Purchasing, 132, 33 - 37. Preis, M.
W. (2003). The Impact of Interpersonal Satisfaction on Repurchase Decisions. Journal of Supply Chain Management, 39 (3), 30 - 40. Weitz, B. A. (2004). Personal Selling: Building Relationships.
McGraw-Hill. Weitz, B. A. (2004). Retailing Management.
McGraw-Hill.
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Research essay sample on Effects Of Product Value Compared To Personal Selling
