Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Contemporary Selling, 5e
Chapter 3
Chapter 3 Outline: Value Creation in Buyer–Seller Relationships
Value-Added Information in Chapter 3
• Global Connection – “Be Your Own Global Brand”
• Exhibits
o Exhibit 3.1 – “Factors Affecting the Marketing Communications Mix”
o Exhibit 3.2 – “The Generic Value Chain”
I. Adding Value is “Marketing 101”
A. Role of Selling in Marketing
B. Role of Marketing in Selling
III. Communicating Value in the Sales Message
A. Product Quality
B. Channel Deliverables (Supply Chain)
C. Integrated Marketing Communications (IMC)
D. Synergy between Sales and Marketing
H. Salesperson Professionalism
I. Brand Equity
J. Corporate Image/Reputation
K. Application of Technology
L. Price
IX. Mini-Case 3 – “BestValue Computers”
X. Appendix: Selling Math
Discussion Questions
1. Select any firm that interests you. Which aspects of the 12 categories for
communicating value you learned in the chapter do you believe are most relevant for
the firm you selected, and why is each particularly important to that firm?
The 12 categories for communicating value are the following:
• Execution of marketing mix programs
• Quality of the buyer–seller relationship (trust)
• Service quality
• Salesperson professionalism
Student answers will vary. Here is a sample answer:
H&M is a fashion retail chain dedicated to providing value to their customers. The sources of
value that are the most relevant to H&M are the following:
• Channel Deliverables (Supply Chain) – H&M has one of the fastest moving clothing
retail supply chains in the world and can produce new styles instantaneously. An example
• Salesperson Professionalism – Salespeople at H&M are endowed with the job title
“stylist” and feel empowered to style their customers and are allowed to bring matching
accessories and clothing directly to the fitting room for the customer to try on.
• Integrated Marketing Communications (IMC) – H&M constantly communicates with
2. What do you think are the most important ways sales can contribute to a
firm’s marketing, and vice versa?
Personal selling contributes to the overall marketing mix primarily through the promotion mix
or marketing communications mix. The firm can use personal selling to communicate the value
place or distribution of the product and the price by providing information from the customer
that is learned as part of their customer relationships.
3. Why is it so critical that marketing communications be integrated?
It keeps the messages about a company, its products, and, most importantly, its value proposition,
consistent. An integrated marketing communications (IMC) program keeps the messages
consistent by having the following characteristics:
• Comprehensive
4. What is customer satisfaction? What is customer loyalty? Is one more
important in the long run than the other? Why or why not?
Customer satisfaction means how much the customer likes the product, service, and relationship.
Customer loyalty is the customer’s commitment to a company and its products for the long run.
5. Take a look at Exhibit 3.2 on the value chain. Pick a company in which you
are interested, research it, and develop an assessment of how it is doing in
delivering value at each link in the chain.
Student responses should assess a company based on the nine strategic activities (five primary
activities and four support activities) of the value chain that create both value and cost.
The primary activities are:
• Inbound logistics
The support activities are:
• Firm infrastructure
Student answers will vary. Here is a sample answer:
Assessment of John Deere
The firm manufactures, distributes, and finances agricultural equipment, construction and
forestry equipment, and commercial and consumer equipment. It also provides health-care
benefit management services to clients.
Primary activities:
• Inbound logistics – Strong; embraces globalization; partnerships with suppliers to hold
down costs.
• Marketing and sales – Worldwide network of independent dealers, supported by
decentralized marketing organization with offices around the world; need to better
communicate brand to global audience.
Support activities:
• Firm infrastructure – Internal processes are aligned and efficient; innovation, but also
awareness of historical traditions.
• Procurement – Places high demand on suppliers to supply proper products at the right
time; difficult because there are peaks and valleys of supply/demand in the production
cycle; reputation for high quality and high integrity.
6. Consider service quality as a source of value. Give an example of a firm of
which you have been a customer that exhibited a high degree of service quality.
Also, give an example of poor service quality you have experienced at a firm.
Student answers will vary. Here is a sample answer:
consumers are weighing which restaurant to go to, past experiences can often be the deciding
factor.
TGI Fridays and Applebee’s, two comparable chains with similar menus, gave me two very
different experiences. At Friday’s, the server was prompt, friendly, and fun. My order was
Global Connection – Be Your Own Global Brand
Answers to Questions
1. Identify two or three great global brands. What do they do that makes them a great brand
globally?
Answers will vary, but the key is the discussion on why they are considered a great global brand.
In addition to the items listed in the “Global Connection,” there are other reasons for being a
2. Consider yourself as a brand in the context described above. What activities and steps
can you take now to ensure that you will have a solid personal brand that will add value
to your own career on a global basis?
Steps to take include developing a good résumé, seeking out networking opportunities on
Ethical Dilemma – Teaching Notes
Teaching Notes
This dilemma focuses on a critical issue in creating customer value—the lifetime value of the
that was once a big customer and deserving of additional service now expects the same kind of
service and attention even though it no longer warrants it.
The dilemma is designed to open the door to a discussion of customer lifetime value. As
highlighted in the chapter, the lifetime value of the customer is based on a financial analysis of
the customer potential and associated costs. As all customers are not created equal, companies
must have a good understanding of how to allocate resources. The lifetime value of the customer
is a great tool for management in helping to determine which customers are most important now
and in the future. However, a key question in the dilemma involves “other factors.” Specifically,
is there any room in the calculation for loyalty, a long-standing relationship, and/or personal
Answers to Questions
1. Should Ben drop Midwest as his account and let it become a second-tier customer?
While financial data are not provided in the dilemma, the information presented suggests that
Midwest should become a second-tier customer. Clearly, it is not in Ben or Bear’s best interests
to allocate time and resources when the customer no longer warrants such attention. It can be
Critical to the discussion is educating Midwest that changing the nature of the relationship does
not mean they will lose any of the value provided by Bear Chemicals. In developing customer
profiles (or tiers as stated in this dilemma), it is important to provide value to the customer no
matter what the nature of the relationship. This can be more difficult to convey when the
2. What obligation does a company have to customers who no longer warrant special
service or attention?
Relationship selling is all about building a profitable relationship based on a great value
proposition that meets the needs of the customer. Over time relationships evolve, and for every
high-value customer that warrants additional resources there will be other customers whose
Chapter 03 - Value Creation in Buyer–Seller Relationships
Mini-Case 3 – BestValue Computers
This case illustrates the various areas in which a company and its sales representatives can create
value. As noted in the chapter, there are many sources of value creation and this case asks
students to identify the sources at work for BestValue Computers. Answers to the questions
Answers to Questions
1. The categories of value creation on which BestValue currently relies come from the
“Communicating Value in the Sales Message” section of the chapter and include product quality,
quality of the buyer–seller relationship (trust), service quality, salesperson professionalism,
corporate reputation, application of technology, and price. BestValue Computers is providing
Chapter 03 - Value Creation in Buyer–Seller Relationships
2. The answer to this question is to simply discuss the service quality dimensions of
reliability, responsiveness, assurance, empathy, and tangibles to communicate a message of high-
quality service to clients. BestValue employees should be ready and willing to provide service in
a consistent and accurate manner when requested by clients. In addition, training provided by
3. Although we do not know how long BestValue has been in business, we can assume that
it has been several years (more than two but probably less than ten). Consequently, BestValue
has developed brand equity of its own during that time frame. The case indicates that BestValue
4. As the main contact person between the customer and the company, BestValue sales
representatives play an enormous role in managing customer expectations. Based on how
BestValue sales representatives communicate the capabilities of the company to provide high-
quality products and services to its potential customers, they are setting expectations for those
customers. BestValue’s performance will then be measured against the expectations established
by the sales representative. In the New Orleans and Memphis markets, BestValue is better served
to underpromise and overdeliver on those promises. For example, if the company can deliver
5. Some dangers for BestValue in the new markets of Memphis and New Orleans include an
inability to service customers as quickly and professionally. These two new markets are farther
away and will require more travel time for service technicians. In addition, these new markets
are relatively big. Consequently, if BestValue enjoys any success at all in selling its products in
corporate reputation that it currently enjoys. Dangers present for BestValue in its efforts to begin
offering LANs are similar. Local area networks represent a new product line for the company.
As a result, company personnel will have to be trained to sell, install, and service the equipment
in a professional and competent manner. If the training does not take place and installation of the
first few LANs does not go well, adding this new product line could be a disaster for the
