Negotiation skillsWord

　　Lecture 1

　　Negotiation skills

　　Contents

　　1

　　The negotiation process Negotiation styles

　　2

　　3

　　Negotiation tactics

　　1. The negotiation processNegotiation: -- process in which two or more people or organizations with common or conflicting interests work towards a way of resolving an issue or agreeing on how they will cooperate Business people are negotiating all the time: formal negotiation: sit down at the table, talk about the unit price, the conditions for a timely delivery, the clauses for compensation and force majeure, etc. informal negotiation: talk to your boss about the pay raise contact your debtor about the overdue payment call your supplier to claim compensation for a wrong dispatch of merchandise ask your subordinates to finish the work according to the scheduled timetable

　　1.1 Before the negotiation1. Identify the team leader: able to select team members, prepare the negotiation plan, make the bargain, make decisions on concessions and the final terms, generate high morale and maximum contribution from each member 2. Form the negotiating team: size: 2-5; never reduce the negotiating team to one, no matter how qualified the negotiator is; don’t exceed five to avoid lack of control coverage: include members in commercial (price, market, delivery terms), technical (specification, delivery program), financial (terms of payment, insurance, financial guarantees) and legal (terms and conditions of contract) areas, as well as an assistant to the main negotiator (make notes, do calculations, remind him of any missing points)

　　Collect and assess data from various sources: MOC (商务部), CCPIT (中国贸促会), Chinese Embassy, Chinese local companies, foreign trade corporations, banks, agents Develop the negotiation plan: a framework within which to negotiate; formulated by all the team members and finally approved by the team leader and the top management; the plan should: identify the team leader and other members of the negotiating team set up the lines of communication and reporting system define the negotiating objective in terms of the major issues to be discussed develop counter-proposals in case objections are raised on any of the points you proposed sate the minimum acceptable level for each of the major items: e.g. price concession of 5%, remittance (汇付) or collection (托收) as terms of payment, FOBST as terms of delivery, 1-year extra warranty establish the time period within which the negotiation should be concluded

　　4.

　　stantial deal with you today. Hi Mr. Bingley, how are you getting along with your business? Nice to meet you again. How are sales in Sweden? We’ve seen your catalogue and exhibits in the showroom. We’re interested in the latest model of drills in particular. 2. Identifying: specify in detail the issues to be resolved, e.g. To come straight to the point, what is the CIF New York price for your dishwashers? We need to talk about the terms of delivery. Let’s return to the topic of commission, shall we? 1.

　　3. Bargaining: negotiate the identified issues, propose your position, initiate the other party’s stance, make concessions and compromise, e.g. The quality of the last batch is far from being acceptable. To tell you the truth, $200 can hardly cover our production cost. For friendship’s sake, we may exceptionally consider reducing our price a little, but never to that extent. Honestly, the rate of commission you propose is far too small. Then how big a step are you prepared to take? Could we make a compromise? How about a 5% discount? We have made a reduction on the price. So it would be your turn to make some concessions on the terms of payment. It’s our final position. Now it’s up to you.

　　4. Concluding: summarize the points and confirm the agreement, e.g. Ok, let’s call it a deal! I’m glad that you add your order. Fine. Let’s get the contract finalized. You’ve driven a hard bargain, but we’ll accept it, since we have been doing business for so long. So you will arrange for the L/C to be opened in our favor as soon as you get back, and we will effect shipment within two weeks on receipt of your L/C. That sounds reasonable, but it’s subject to the final confirmation of the head office. I will have you a definite answer tomorrow. That’s a deal. We look forward to a long-term relationship with you.

　　Case study: Price negotiationThe seller: Mr. Wang, the Export Manager of a Zhejiangbased company producing plastic products The buyer: Mr. Welsh, the Import Manager of a large chain store company in the U.S. The setting: After a factory tour, Mr. Welsh picks up several products and starts to negotiate prices with Mr. Wang Your tasks: 1. What are the major issues identified and bargained in this negotiation? 2. What nonverbal signals sent by both parties are most impressive to you? In what way do they help both parties to achieve their aims?

　　2. Negotiation styles Possible negotiation outcomes:

　　Win-lose Lose-win Lose-lose Win-win

　　The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves all involved feeling that they've won – in some way – once the negotiation has finished.

　　Five negotiation styles

　　3. Negotiation tactics the yes-but technique: to affirm first to establish the image as cooperative and appreciative of the viewpoint of the other party, and then to i

　　dentify the differences and reject what the other party would like you to do; cf. the “no-although” way the side-stepping technique: to side-step an issue you don’t want to answer directly, e.g. Can you guarantee delivery by Jan 1st? – Here, have a look at the program to see how we’ve been doing in the past three years, and you can know how reliable we are.

　　offer more options: to make the other party’s job easier, and to discover the maximum common ground, e.g. possible options for a request of price reduction include: quantity/repeat order discounts improved packaging and labeling (for the same price) more prompt delivery or better payment terms free promotional materials in the language of the import market free training of maintenance staff and after-sales consulting service supply of free parts to replace those damaged from normal wear and tear market exclusivity higher commission rate