1ZM60 – Selling New Products
Lecture 1 – Overview Selling
Course Outline
New product selling is different from sale of established products (due to adoption process)
- Articles → introduction, hypotheses, discussion, and implications (both scientific and managerial)
- Exam
o Ch 1,3,4,7-10,12-17
o 7 scientific articles
o Lecture slides and related material
▪ In-class articles not part of the 7 mandatory articles are non-mandatory. They will not
come up in the exam.
o 25 MC + 5 (a,b) open questions
- In-class: if whole team not present you have to present next week but it has no impact on grade
- Practitioner interview → find a seller in your network to interview
Introduction
What is a new product? What is innovation? → Roger (2003): Any idea, practice, or object that is perceived as
new by an individual or other unit of adoption.
Goals
- Marketing: With marketing the goal is always centred around positioning. What’s positioning? Simply
put, it means to align your brand with your particular niche or industry; it’s the marketer’s constant
need to make an impression on current and would-be customers.
- Sales: With sales it’s no secret that the goal is always more — you guessed it — sales! With quotas to
meet, there’s not much room for anything else.
Figure 1: dimensions of departments
Always ask yourself
- What is the good (product or service) being sold?
- Who is the seller, who is the buyer?
- Why is he/she selling or buying?
(What are each and everyone’s individual Attitudes, Beliefs, Motives, Hopes, Interests, Social pressure,
Needs, Wants etc.)
- Which theory/model/concept serves my interests best?
Trends in Marketing & Sales
Hundreds of years ago craftsmen designed and produced customized products for their customers.
- Resources, such as material and knowledge were very scarce.
- Products were unique
- Only build if someone gave an order.
With the advent of the Industrial Revolution standardization was put in place by Industrial Engineers.
,1ZM60 – Selling New Products
- Resources, such as material and knowledge were available.
- Market potential was there? Was there demand?
- If you don’t know what it is, can you miss it, can you have demand for it?
- Products were build based on supply – push to the market. ‘You can have any color that you like as
long as it is black’,
The last decades flexible computer-aided manufacturing systems and internet enabled the production of custom
output for the mass market (Digital Revolution).
- Resources, such as material and knowledge are available.
- Knowledge is even transferred to AI.
- Market potential is there? Do we have demand?
- If you don’t know what it is, can you miss it, can you have demand for it?
- Products are build based on customer requirements – pull from the market.
Figure 2: Overview of Shifts
Drivers of Change: 2nd shift
- Need for customization / personalization
- Focus on utilization instead of ownership
- Emergence of servitization
- Emergence of digitalization
- Higher market pressures
o increasing need for efficiency
o Need for more standardization in production while maintaining flexibility
What does this imply?
- The sales function is changing rapidly:
o Complex selling settings
o Analytical, design-oriented approach
o Interdisciplinary knowledge broker (e.g., provide info to NPD process)
- When is salesperson needed?
o The customer cannot discover that he has a problem.
o The customer cannot diagnose which problem he is facing.
o The customer cannot design a solution.
o The company cannot deliver itself the technological advancements which are needed to solve
its problem.
- Increasing need for salesperson trained as industrial engineers.
In the past 30 years companies and researchers have greatly improved their understanding of new product
development. Yet, success rates of actual launch have remained low.
,1ZM60 – Selling New Products
Figure 3: Darwinism in Business: Survival of the fittest and struggle for existence
Why new product selling?
Why does commercialization efforts fail? Research suggest many reasons…
- Companies underinvest in product launch
o “When investing €10 on research, invest €100 in development, and €1,000 - €10,000 to
introduce and establish a new product…” Drucker’s (1973)
- Salespeople are not committed or conservative (e.g., Atuahene-Gima 1997; Van der Borgh and
Schepers 2014)
- New product selling is different from sale of established products (more risk, involves different
learning, etc.) (e.g., Ahearne et al,. 2010)
- New products sell themselves (Ahearne et al., 2010)
- Salespeople focus on product features: “whistles and bells”, and have virtually no attention to “real”
customer needs (Rackham 1998)
- Incentive systems are not aligned (Van der Borgh and Schepers, 2017)
- Et cetera.
Why sales perspective?
Sales is of STRATEGIC importance for…
- Commercialization of newly developed products
- Identify and evaluate customers needs (input for NPD)
- Development and execution of firm innovation strategy (bottom up & top down)
- Trend that companies go back to strategies for organic growth (instead of mergers and acquisitions).
Introduction Personal Selling
Personal selling is a process of person-to-person communication with a customer.
Personal selling is a promotional method in which one party uses skills and techniques for building personal
relationships with another party that results in both parties obtaining value.
, 1ZM60 – Selling New Products
Figure 4: Types of selling compared
Advantage of personal selling career
1) Advantage #1
o The first advantage is freedom of expression. Selling is one of the few professions in which
one can be himself/herself. It is a field where resourcefulness and perseverance are demanded
and highly valued.
2) Advantage #2
o The second advantage of selling is that one has the freedom to become as successful as they
would like to be. In this profession no one determines your income but yourself. The income
you earn is in direct proportion to the amount of service we give.
3) Advantage #3
o The third advantage of selling is that it’s a daily challenge. In sales, you never know what
opportunities may arise and what catastrophes may befall you. To a salesperson, every day is
an adventure. Working at this profession, you can go from the heights of exhilaration to the
depths of discouragement depending on the people you meet.
4) Advantage #4
o The fourth advantage of selling is that it offers high potential returns from a low capital
investment. What does it cost to gain entry into this profession that has no income ceiling?
5) Advantage #5
o The fifth advantage of the selling profession is that it’s satisfying especially when you are able
to convince an objection to a sales lead. That is when the art of persuasion comes into play.
Lecture 1 – Overview Selling
Course Outline
New product selling is different from sale of established products (due to adoption process)
- Articles → introduction, hypotheses, discussion, and implications (both scientific and managerial)
- Exam
o Ch 1,3,4,7-10,12-17
o 7 scientific articles
o Lecture slides and related material
▪ In-class articles not part of the 7 mandatory articles are non-mandatory. They will not
come up in the exam.
o 25 MC + 5 (a,b) open questions
- In-class: if whole team not present you have to present next week but it has no impact on grade
- Practitioner interview → find a seller in your network to interview
Introduction
What is a new product? What is innovation? → Roger (2003): Any idea, practice, or object that is perceived as
new by an individual or other unit of adoption.
Goals
- Marketing: With marketing the goal is always centred around positioning. What’s positioning? Simply
put, it means to align your brand with your particular niche or industry; it’s the marketer’s constant
need to make an impression on current and would-be customers.
- Sales: With sales it’s no secret that the goal is always more — you guessed it — sales! With quotas to
meet, there’s not much room for anything else.
Figure 1: dimensions of departments
Always ask yourself
- What is the good (product or service) being sold?
- Who is the seller, who is the buyer?
- Why is he/she selling or buying?
(What are each and everyone’s individual Attitudes, Beliefs, Motives, Hopes, Interests, Social pressure,
Needs, Wants etc.)
- Which theory/model/concept serves my interests best?
Trends in Marketing & Sales
Hundreds of years ago craftsmen designed and produced customized products for their customers.
- Resources, such as material and knowledge were very scarce.
- Products were unique
- Only build if someone gave an order.
With the advent of the Industrial Revolution standardization was put in place by Industrial Engineers.
,1ZM60 – Selling New Products
- Resources, such as material and knowledge were available.
- Market potential was there? Was there demand?
- If you don’t know what it is, can you miss it, can you have demand for it?
- Products were build based on supply – push to the market. ‘You can have any color that you like as
long as it is black’,
The last decades flexible computer-aided manufacturing systems and internet enabled the production of custom
output for the mass market (Digital Revolution).
- Resources, such as material and knowledge are available.
- Knowledge is even transferred to AI.
- Market potential is there? Do we have demand?
- If you don’t know what it is, can you miss it, can you have demand for it?
- Products are build based on customer requirements – pull from the market.
Figure 2: Overview of Shifts
Drivers of Change: 2nd shift
- Need for customization / personalization
- Focus on utilization instead of ownership
- Emergence of servitization
- Emergence of digitalization
- Higher market pressures
o increasing need for efficiency
o Need for more standardization in production while maintaining flexibility
What does this imply?
- The sales function is changing rapidly:
o Complex selling settings
o Analytical, design-oriented approach
o Interdisciplinary knowledge broker (e.g., provide info to NPD process)
- When is salesperson needed?
o The customer cannot discover that he has a problem.
o The customer cannot diagnose which problem he is facing.
o The customer cannot design a solution.
o The company cannot deliver itself the technological advancements which are needed to solve
its problem.
- Increasing need for salesperson trained as industrial engineers.
In the past 30 years companies and researchers have greatly improved their understanding of new product
development. Yet, success rates of actual launch have remained low.
,1ZM60 – Selling New Products
Figure 3: Darwinism in Business: Survival of the fittest and struggle for existence
Why new product selling?
Why does commercialization efforts fail? Research suggest many reasons…
- Companies underinvest in product launch
o “When investing €10 on research, invest €100 in development, and €1,000 - €10,000 to
introduce and establish a new product…” Drucker’s (1973)
- Salespeople are not committed or conservative (e.g., Atuahene-Gima 1997; Van der Borgh and
Schepers 2014)
- New product selling is different from sale of established products (more risk, involves different
learning, etc.) (e.g., Ahearne et al,. 2010)
- New products sell themselves (Ahearne et al., 2010)
- Salespeople focus on product features: “whistles and bells”, and have virtually no attention to “real”
customer needs (Rackham 1998)
- Incentive systems are not aligned (Van der Borgh and Schepers, 2017)
- Et cetera.
Why sales perspective?
Sales is of STRATEGIC importance for…
- Commercialization of newly developed products
- Identify and evaluate customers needs (input for NPD)
- Development and execution of firm innovation strategy (bottom up & top down)
- Trend that companies go back to strategies for organic growth (instead of mergers and acquisitions).
Introduction Personal Selling
Personal selling is a process of person-to-person communication with a customer.
Personal selling is a promotional method in which one party uses skills and techniques for building personal
relationships with another party that results in both parties obtaining value.
, 1ZM60 – Selling New Products
Figure 4: Types of selling compared
Advantage of personal selling career
1) Advantage #1
o The first advantage is freedom of expression. Selling is one of the few professions in which
one can be himself/herself. It is a field where resourcefulness and perseverance are demanded
and highly valued.
2) Advantage #2
o The second advantage of selling is that one has the freedom to become as successful as they
would like to be. In this profession no one determines your income but yourself. The income
you earn is in direct proportion to the amount of service we give.
3) Advantage #3
o The third advantage of selling is that it’s a daily challenge. In sales, you never know what
opportunities may arise and what catastrophes may befall you. To a salesperson, every day is
an adventure. Working at this profession, you can go from the heights of exhilaration to the
depths of discouragement depending on the people you meet.
4) Advantage #4
o The fourth advantage of selling is that it offers high potential returns from a low capital
investment. What does it cost to gain entry into this profession that has no income ceiling?
5) Advantage #5
o The fifth advantage of the selling profession is that it’s satisfying especially when you are able
to convince an objection to a sales lead. That is when the art of persuasion comes into play.
