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would your buyer pay more to buy from your company?
Price is one of the most important P's. And when it comes to decision making it is even more critical. But a lot depends on what specific product you are buying as well.
I heartily thank M/s P.Varma, Raju Bhetwal Chhetri, Adham Said, Syed Abdul Rasheed Badrudeen and Jihad Belkbir for sharing their well thought out answers to the above questions
Here is what I have experienced and understood from the teachings of masters like Tom Reilly.
Buyers want more than the cheap price. Established research findings reveal that most of the price objections that salespeople encounter are self afflicted wounds! Only one out of six shoppers is a true price shopper who considers only price. There is another segment of buyers for whom the price is an issue but not the issue. A recent study of industrial buyers found that three fourths of those surveyed would not shop price if they were convinced that value added services were in place with the supplier.
As per research findings about80% of salespeople use price as a competitive weapon. When buyers were asked to rate price on a10 point scale –10 meaning that price is important – they rated it at7.2 while the salespeople themselves rated price8.3. who is making a bigger deal out of the selling price ; the buyer or the salesperson? Who is more preoccupied with selling price ; you are your buyer? .
Salespeople who expect price resistance generally find it. If you begin the sales call by anticipating price objection, you unwittingly create one. Asking questions that put the focus on price encourages buyers to shop price. Therefore a salesperson MUST not ask the buyer if the price is important in their decision making.
As for the first part of the question what do buyers really want? A survey of the buyers found that buyers would pay12.2 % more for better quality product than they currently use and8.5% more for better service than they currently receive.
From a list of36 variables from which to choose, buyers voted the following ten as most important to them.
1. Knowledgeable salespeople
2. Product quality
3. Product availability
4. Ease of doing business
5. Technical support
6. Acquisition price
7. Salespersons ability to get things done
8. Salesperson’s follow-up
9. Product performance
10. Support after sale
It is important to note that buyers rank knowledgeable Salespeople at the top of the list.
Does a salesperson ask if his knowledge earn him or her this ranking? A salesperson’s product knowledge that enables him or her to prescribe the correct solution for a given application is real value . Knowledge that directs the salesperson to ask the right questions is real value to the customer. Would the buyers pay more to buy from your company because of the salespersons knowledge?
Buyers are less concerned with acquisition price. They want to get as good as they give. Concentrate on delivering more than you promise and more than the buyer expects you will live with fewer price objections.
A failure to differentiate one’s solution begins inside a seller’s company when the marketing department fails to create enough gap between its products and services and the competition. Sales, in such a situation , is unable to answer the question “ Why should I pay more to do business with your company versus the competition’’
I sincerely hope you consider the above favourably and find the content of this answer acceptable. should you have any observations please feel free to make!
Kindly refer to “Value added selling “ by Tom Reilly for more on this important subject
We should never ask such question to the buyers. We should always promote the product based on the features of the product. In my experience I have seen that suppose some product is costing10 AED then buyer will say that it is costly. If you reduce the cost to8 AED then also the buyer will say that the product is costly.
price is one of the most important parts of the4ps, whatever social standard you product is targeting price will be an important part of your strategy.
PRODUCT VALUE is what every client is looking for before purchasing a product or goods.
P.V is not and not limited to the price. P.V. is dependent on the clients perception of what he needs, at the time he needs.
To site examples:It could be a product of high price but with a reputable name or quality. Or a low priced item with multi functionality.Could be a substandard product on fair price, etc etc.
Let me sum it up in one word... "Solution"...
I think price is always an important factor in decision making, unless the product is of extreme value, like life saving product and products bought for status. A skilled sales person can assess the situation and judge whether a buyer is making the decision based on the pricing alone. If a sales person is asking the buyer the price he or she wishes to buy, probably the sales guy might already know the price the buyer is interested at least to an extent. This helps the sales person to quickly seal the deal.
Well having said that, if this question is asked to a buyer purely for the sake of collecting market information or customer feedback, it will be wise to frame the question is a proper way for example.
1. Could you tell us the price you will be interested to buy our product X?
a. US$3 to3.5 b.US$3.5 to3.75 c.US$ ________
You may already know based on your experience that Product X cannot be less than US$3 and cannot be sold for more than US$3.75. This also informs the respondent that you are aware of the prevailing market price for such products.
2. Can you tell what price you bought recently a similar product like product X?
Product Name: ____________ at US$____________
This question is to make sure whether the respondent is aware of such products and does he have any prior experience buying such products.
Questions must be carefully designed or buyers may deliberately choose a low price in the hope of influencing you.
I think first it is more important to know what the customers' need is. Thereafter, irrespective of his/her inclination towards a particular product, one should always suggest the right product to the given customer and justify why he/she should go for that particular product irrespective of the price. Customers' are smart enough to understand things if explained properly.
depending on social class buyers. found in many of the economists who already analyze this problem as JM.keyns that says that consumers consume according to their income. Others say that the effect of immitation that control consumer buyers.
for the other question, it's mandatory to do a survey to find out which is the proper price for our product, and which is competitive or not.
The product knowledge is more important for a sales person than low price. There is a limit to win sales based on lowering price. A sales person should have more focus on learning product features and developing negotiating skills.
Mercedes and Toyota both are cars but customer is paying a lot more for Mercedes car because of its features.
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