Q and A Archives

Peruse a rich archive of questions and answers that ran from 1999 to 2017
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999


December Each Asian culture is different and should be treated as such. However, there are several common foundational elements to all the major Asian cultures. What are they?
A: The foundational basis for the similarities is the impact of Confucianism and Buddhism. Confucianism being the paramount influence in the culture, the primary precepts of Confucianism are as follows: absolute loyalty to a hierarchical structure of authority, duty to the parents, strict order, a defined form of conduct, separation of the husband and wife, and trust between friends.
November With major accounts which is more important: Building broad and deep relationships or gaining a deep understanding of the account's business and pushing their thinking to innovative solutions to challenges?
A: In the 90's and early years of the new millennium relationship building was the king of sales approaches. In the last 8-10 years however it has swung heavily to understanding the client's business and aggressively pushing their thinking in more productive directions.

The Harvard Business Review completed a broad study in September 2011 which identified that high performing salespeople overwhelmingly came from understand and pushing approach. This methodology for this approach is part of Quest Team's Key Account Selling and Management programs.
October When a supplier is providing any kind of support to a customer there is an opportunity for conflict to arise. Often the supplier tries to either smooth things over or compromise with the customer. Sometimes either of these approaches work, but they are not usually the best. Why not?
A: Smoothing a conflict over plays down the differences between supplier and customer, and fails to recognize the benefits of openly addressing the conflict. The source of the conflict rarely goes away on its own and the supplier is often persuaded to accommodate an unwarranted demand by the customer.

Compromising may look like a good approach; a “win-win” outcome; it often is not. The expectation to have both parties give something up to meet in the middle creates a “lose-lose” situation. Neither party feels they got what they wanted and it results in a watered down solution that may not be effective.

While not always possible, collaborating with the customer as a joint problem solver is preferable. Taking this approach implies that you and the customer recognize abilities, interests, and intention for a positive outcome. Focus on logical discussion of the issues and alternative ways to solve differences. This requires work on your part. You need to open your eyes and ears and identify the true needs of the other party; what he or she is actually trying to accomplish; his or her personality characteristics; and outside demands that may be causing pressure on your customer contact.

September As a supplier to an OEM or end-user, the technical aspects of your product and how well it uniquely satisfies your customer’s needs is of key importance. To gain and maintain the business, however, what other major factor has strongly come into play in the last couple of years?
A: The comprehensiveness and strength of your Business Continuity Plan is high on the list. You must have a strong change control methodology that ensures nothing unknown will change the efficacy or performance of your qualified product. This includes not only your company, but all of your sub-suppliers.
August How do you know if your company or product line is a strong brand image?
A: The goal of a brand is to provide a sustainable and profitable competitive advantage in the market. The brand image must not be something that can easily be duplicated or hard to maintain. It relies on core competences within the organization that other companies either do not have or would have a hard time duplicating.

For example if you are the lowest cost supplier, due to considerable manufacturing cost advantages, and you are willing to direct the future company efforts towards providing the lowest cost products to the market, it needs to be verified that no one else can easily duplicate these efficiencies with a new technology or manufacturing capability.

In the technology industry thousands of companies in Silicon Valley have created great first and maybe even second products but failed because they never developed a sustainable competitive advantage. These companies went out of business, or were acquired by others, because they did not develop business strengths beyond those few “neat” and “exciting” new products.

July Determining the right price for your product involves many factors. Why should considering what product price you need to cover your cost and profit not be one of them?
A: The consideration should be “What costs can we afford given the price we can charge in the market place, and still earn an acceptable profit?” Cost has no relation to selling price. Selling price is established in the marketplace, by the marketplace.
June You receive an RFP (Request for Proposal) for an expensive purchase. It instructs you to only talk to purchasing, not the users of your products, or you will be disqualified. What should you do?
A: You should politely tell purchasing that you appreciate their rules, but in order to give them the optimum proposal you will have to talk to the product users. Then use your own knowledge of the account to get to those users and, once you have all the necessary information, submit your proposal.

Without interaction with the ultimate user of your product or services you may not have identified the optimum solution, or know all of the expectations. The result . . . (1) you could be priced too low for the expected solution; and (2) your poor solution may not fully satisfy the user needs and hurt your reputation.

Purchasing’s purpose for restricting your contacts is to limit your ability to differentiate the value of your product and thus make price the only issue. Following their restriction, you may win the business but at what price? Probably one that provides an inadequate profit margin.

May One input in determining product pricing is the cost of producing the product. Why is cost not a firm, fixed number?
A: Product cost is a combination of direct costs to produce the product as well as that production’s share of the “fixed” costs that are used for all production. People usually act like that number was cast in cement or carved in stone. But odds are that cost was based on some assumption of the volume of products to be manufactured in a period, and the actual cost will vary with volume.
April In negotiations with customers there is something called the “Bogey”. What is it and how do you use it?
A: The “Bogey,” sometimes called the “opening bid” establishes the framework of your negotiation. It is useful in establishing control at the start of the negotiation over an issue and helps reveal information while affecting the other party’s expectations. As a rule, when you lack information it is best to get the other party to bid first. If you know their position, you issue an opening bid that transmits the message you want the other party to believe.

Keep in mind that when you use a normal proposal you are basically establishing the “Bogey” and the other party takes that as your starting position. It is often useful to issue a “Budgetary Proposal”. This gives you room to change position during the negotiation.

March Often a major objective for a product is to “gain market share”. Why is this frequently the wrong focus?
A: “Gaining market share” may be very important when your product needs a minimum level of market penetration to be considered viable by your potential customer base. However, in other situations this being the prime objective takes focus away from what is truly important – higher profits.

Profits and market share may be mutually exclusive. Higher market share sometimes means lower prices and lower overall profits. Higher profits sometimes means finding a highly profitable niche and reducing overall market share.

February Why is reading the financial statements of a customer important to a supplier account team?
A: To the trained eye, financial statements provide an opportunity to perform a quick, but fairly accurate assessment of the state of your customer’s business. You may often be able to identify where the major challenges exist. Are they having cash problems? Where are they allocating their resources and how does that compare to similar companies? This can tell you what is driving decisions in the company and where to focus your account penetration, as well as the messages to initially bring to them. How about problems which make them less competitive, such as high production costs? These may pop up and you may have answers.
January Why should you engage in market segmentation?
A: In one word, PROFIT. Or in three words, PROFIT, PROFIT, PROFIT!

Introduced to the marketing community by the late Wendell Smith in 1956, segmentation has developed from an academic concept to a viable “real-world” planning strategy. It was first recognized in consumer markets and rejected by B2B markets. But over the past two decades it has risen significantly in prominence with high-technology businesses. It has become a proven concept for increasing sales and improving overall market performance.

Based on a comprehensive study by Allen Stines in cooperation with Pennsylvania State University in 2007, segmentation was rated as the top B2B competency required out of a pool of 153 marketing issues. The study found that superior performing companies use innovative market segmentation criteria and processes to find customers with similar needs and behaviors. This allows for targeted products and promotions.