商务英语谈判-

1、编辑pptChapter Four-oneChapter Four-one Bargaining ProcessBargaining ProcessFocusFocuslTactics and strategies for making quotationsTactics and strategies for making quotationslIndicators for the end of a bargainIndicators for the end of a bargainlTactics and skills for making counter-quotationsTactics

2、 and skills for making counter-quotationslPrinciples and strategies for making compromisesPrinciples and strategies for making compromises编辑pptCase 1:Time: 2005Parts: a large group of Chinese purchasers major American Corporations including Boeing, Microsoft and GMBackground: In 2005, in order to re

3、duce the trade deficit（赤字）（赤字） between the US and China, a large group of Chinese purchasers were dispatched to negotiate with major American corporations including Boeing, Microsoft and GM for the importation of products worth over 10 billion dollars.编辑pptPleased to hear the news, Boeing wondered h

4、ow many Boeing airliners China would purchases this time.Chinese representatives proposed that the purchase of Boeing airliners should include the newly-developed Boeing 787.Problem: However, the representatives from Boeing said there would be no problem about the purchase of Boeing 737s, 747s, 767s

5、, and 777s, but the Boeing 787 was a new product that had not yet rolled off the line, and it would be sold at an extremely high price.编辑pptThe Chinese representatives responded that there must be a price no matter how high it was, so how much was a Boeing 787 jetliner?After consulting together, the

6、 American representatives came up with a “ceiling price.The Chinese representatives thought it was unreasonably high.Large airline companies in China are regular clients of Boeing.You should not make it a “once-for-all” deal. 编辑pptTo enable us to continue our purchase of your airplanes, please consi

7、der whether you can give us a preferential price by reducing your offer by xx%.The American representatives replied:” We considered these factors before we quoted our preferential price. Therefore, we are not in a position to allow you X% discount, let alone xx%.You know that Boeing 787 jetliners bo

8、ast a high safety coefficient and a fuel-efficient feature.”编辑pptThen the Chinese representatives responded:” If we purchase a large quantity, will you give a more favorable price?”The American said they would think about it.Initial Result: In the following rounds of negotiation, the Chinese side in

9、creased the number of the airplanes they ordered, step by step, and the Americans made several appropriate price concessions.编辑pptIt was not until the Chinese side agreed to buy 42 Boeing 787 jetliners that the American representatives were delighted, and felt that things were better than they had e

10、xpected.And the Chinese side was also satisfied with the settlement of a price xx% lower than the initial offer.Another Problem: However, when the representatives from both sides were about to sign the contract, the American side went back on their word because 编辑pptsome American congressmen pointed

11、 out that the gyroscope （回转仪，陀螺仪）（回转仪，陀螺仪）installed in the Boeing 787 was a state-of-the-art sophisticated precision instrument.If airplanes with this kind of gyroscope were exported to China, they believed it would have an adverse impact on U.S. national security.Final result: Therefore, the Americ

12、an representatives came up with a new proposal: they would sell Boeing 787s without gyroscope or with old-generation gyroscopes to China, with a corresponding reduction in price.编辑pptThe Chinese side strongly disagreed:” We wont buy a beautiful but blockheaded and dumb giant bird. The Boeing 787 mus

13、t be furnished the advanced gyroscopes, or it will be impossible to know clearly how high it flies and what direction it goes.”Although the American representatives had raised a new issue under the pressure from their Congressmen, the Chinese side maintained their position.In the end, Boeing signed

14、the agreement with the Chinese Aviation Administration of China.编辑pptThe bargain phase in international business negotiation- covers broad period of time from the end of the opening phase to the beginning of the closing phase.-is called “the step of overcoming barriers to agreement”-constitutes the

15、central and most difficult stage in the whole negotiation process.编辑pptIn the bargaining phase, each negotiating party-measures its own strength, intelligence and strategies against those of its counterpart.-adjusts its own negotiation strategies,-modifies its original negotiation objectives or targ

16、ets, and then-establishes a basic framework for the negotiation agreement.Bargaining involves three key aspects:编辑ppt-quoting a price-bargaining over the price-making compromisesQuotationCase 2: Parts: the Macau Jockey（赛马）（赛马） Club in China an Australian jockey clubBackground: The Macau Jockey Club

17、in China was commissioned to negotiate with an Australian jockey club about introducing ten horses of fine breeding.编辑pptThe seller, the Australian jockey club, would sell the horses as long as the price was above 1 million Australian dollars per horse on the average;Macau Jockey Club, aimed to pay

18、no more than 1.5 million Australian dollars per horse.The two sides did not know one anothers bottom price (quoted above), but both of them would benefit if they could close a deal including 10 horses at a total price of 10-15 million Australian dollars.编辑pptStep 1: The buyer requested the seller to

19、 quote a price first.The information the seller had gathered, included the following:-as the horse racing season was approaching in Macau, a number of local race horses had to retire because they were ill or overage.-but pure-bred European horses were over a million or even several million Euros eac

20、h, so, it would not pay for a small jockey club like Macau Jockey Club to buy them for their racing season.编辑ppt-In contrast, Australian race horses, also thoroughbreds originating from Europe, were practically priced, and were the logical first choice for the Macau Club.Therefore, the seller estima

21、ted that the Macau Jockey Club would pay at least 12.5 million Australian dollars for these 10 horses, and may be they would pay as high as 17.5 million Australian dollars.Nevertheless, the Australian side had not planned to quote a price too high for fear that the buyer would perceive them as lacki

22、ng sincerity, and would abandon the bargaining too soon and turn to New Zealand for the purchase.编辑pptThus, the Australian jockey club made an initial bid for a total price of 17 million Australian dollars for the 10 horses.Step 2: Though the Macau club had anticipated the sellers bottom line, this

23、quotation was higher than they had expected.Anyway, the sellers first quoted price was 2 million Australian dollars higher than Macaus highest acceptable price (resistant point).编辑pptHowever, judging from the quotation , the buyer estimated that the sellers expected price would be above 15 million A

24、ustralian dollars. If this were the case, it would be difficult to reach an agreement.Hence, the buyer made a probing（刺探性（刺探性的）的） counter-bid at a total price of 12 million Australian dollars. Step 3: Because there was a big gap between the opening prices that the two sides quoted, their representat

25、ives had to haggle over them.编辑pptThe sellers counter-bid was a total of 15.5 Australian dollars and the buyer countered again with a bid of 13.5 million Australian dollars.Result: Finally, the seller suggested that meet halfway and agree on a price at 14.5 million Australian dollars.The Macau club

26、accepted that price, feeling pleased without showing it: they had saved 0.5 million Australian dollars for their club! They did not know that the seller got 4.5 million Australian dollars more than their original bottom line.编辑pptThe definition of quotation:Narrowly defined, a quotation is -a way to

27、 indicate a particular price at which one party will buy or sell the specified commodity.Broadly defined, it involves-all that one party proposes to the other concerning mutual interests in a business negotiation, including the following terms and conditions for a deal:-the name of commodity-quality

28、-quantity编辑ppt-price-packaging-shipping-insurance-payment term-inspections-claims-arbitration, etc.For large projects, it may include:-forms of cooperation-ratio of capital distribution-profit and loss distribution, etc.编辑pptl Forms of quotationl Two forms:l Oral or writtenl Oral: in international b

29、usiness negotiationl Written: in international business correspondence, telex, telegrams and e-mails as well as in a bid or tender submitted in an international project.l Oral quotationl It is characterized as convenient, prompt, and flexible.编辑pptAdvantages: Negotiating face-to-face or through Inte

30、rnational Dialing (IDD) may-help to eliminate barriers of time, space and language,-enable negotiators to quote and directly justify the price, the amount of their investment, the ratio of capital distribution and the like at which their party expects to close the deal.The biggest advantage of the o

31、ral quotation is :编辑ppt-negotiators can take advantage of their communication skills to build a favorable atmosphere and use emotional factors to facilitate the acceptance of their quotation.Disadvantages:If negotiators -lack the ability to act quickly in response to any unexpected contingency or em

32、ergency, or-do not have good communication skills and experience in dealing with people from different cultural backgrounds,编辑ppt-First, they may find themselves in a weak position, unable to quote the price at the right time.-Second, they may not know their counterparts well and may not realize whe

33、n to quote, what price to quote, and how to quote the price.-Third, vulnerable to an adverse impact because of accent and nervous tension, negotiators may tend to make a slip of the tongue and engender（引起）（引起） misunderstanding.编辑ppt-Fourth, the quotation may be refused immediately on the spot.-Fifth

34、, the two parties may haggle over unimportant details and slow down the negotiation.-Sixth, some complex and sophisticated technical specifications may require charts and diagrams, and would be difficult to express clearly in oral quotation.2) Written quotationIt refers to putting a proposal for a b

35、usiness transaction in the form of writing, including -relatively detailed data; 编辑ppt-using specific words, diagrams, and the like to express clearly to the other party the whole range of terms and conditions and other related items one party would be willing to accept.Advantages:-more explicit and

36、 formal than the oral one-may eliminate the possibility of misunderstandings arising from an accent or misstatements due to nervousness.-can help to cut the cost of time and effort because the companies involved do not need to make opening statements.编辑ppt(e.g. at the International Consumer Electron

37、ics Show (CES) held in Las Vegas, Nevada, U.S.A, the representative of a French TV manufacturer inquired of the representative of an LCD monitor company in Suzhou, China about the price of their Liquid Crystal Display (LCD) monitors. The representative from Suzhou presented a printed quotation to hi

38、m, which included a list of the prices of various LCD monitors with their technical specifications, such as size and resolution（分辨能力）（分辨能力）.) 编辑pptDisadvantages:-may commit itself to a rather narrow range of options, leaving very little room for alternatives to be presented as subsequent quotations.

39、-the atmosphere is less intimate than that which surrounds an oral quotation -and the communication between the parties is less personal as well.-may appear rather rigid and stiff.-when the quotation is translated into other languages, careless mistakes, omissions, oversights（疏忽）（疏忽） or misinterpret

40、ations are quite likely to occur, which can prove to be very embarrassing.编辑ppt3) Combination oral and written quotationThe interchangeable or supplementary use of oral and written quotations, with one of them playing the major role in turn during different phases of the negotiation, is usually call

41、ed the combination oral and written quotation.It may eliminate the disadvantages or deficiencies encountered when using oral or written quotations alone.编辑ppt2. Guidelines for making a quotationThe principle:-”to sell dear” (at a high price) or “ to buy cheap (at a low price).That means:-the seller

42、should try to present his quotation at the highest price acceptable to the buyer;-the buyer should bid the lowest price the seller can bear.In other words: if it is possible, each seller and each buyer attempts to maximize his own potential profit.编辑pptIt is ideal-for the seller to start with the “h

43、ighest defensible quote; and -for the buyer, the corresponding guideline is of course the “lowest defensible offer”.Case 3: background: A foreign developer built six 5-star luxury apartment buildings, called the “Tomson Riviera Dedicated to the Elites”（汤臣一品），（汤臣一品）， in the center of commerce and fin

44、ance, the Lujiazui area, Pudong, Shanghai. 编辑pptEach and every unit in this department complex has a riverfront view of Huangpu River, and allows the residents to view the busy Bund at a glance.And whats more, all the material for building and decorating were imported.For example, the exterior walls

45、 are made of all imported natural stone, and coated with high tech equipments for safety and fire control.编辑pptThe security and automation control system is top-of-the-line, including such items as embossed（浮雕的）（浮雕的） Noblesse （贵族的）（贵族的）anti-theft sound-proof all-copper doors, which ensure the safety

46、 of the collection of luxury and prestige home appliances inside.What a perfect complement between the arts and technology!The apartment buildings were completed in 2005, and then sold globally, weighing in at a price as high as RMB 130,000 per square meterabout ten times higher of the average price

47、 of properties in downtown Shanghai at that time, and 3 to 4 times higher than the apartment buildings adjacent to them.编辑pptResult: As a result, a year after they were put on the market, not a single apartment had been sold in the citys most expensive new housing project.What did actually happen?Th

48、e problem can be traced to its source:The quotation was a one-sided wish, heedless of the market situation;and the price was unreasonable, quite beyond what was acceptable to any prospective buyers;thus it was a violation of the first principle for making quotation.编辑pptThe basic quotation principle

49、 is that-when negotiators are making a quotation, they should consider not only the profit they can get if they close the deal at the desired or quoted price, but also the demand and supply of the related factors.3. Quotation decisions1). Set the range of quotationTo select a reasonable range of pri

50、ces for quotation, the negotiators should-assess the situation (i.e. demand and supply) in the national and international markets编辑ppt-learn the price level and offers of their competitors as references, and -make sure they will cover the cost of the transaction and earn a reasonable profit-consider

51、 their companys operation objectives or goals(e.g. A state-owned pharmaceutical manufacturer in Thailand, produced anti-HIV aids drugs, modeled on the patents of American company, Pfizer Pharmaceuticals Limited.编辑pptWhen the pharmaceutical product was launched on the market, the quotation was limite

52、d to prices ranging from one-forth to one-half of the prices of similar medicines produced by Pfizer.The price was set so low because the Thai company took many factors into consideration:-the royalty fees for the use of patents-production costs-necessary profit and -the price levels acceptable in t

53、he local market编辑pptThey knew that most of the local Aids patients were lower or middle class citizens with low income who could not afford excessively-high-priced medicine and treatment at all.)2) Set the bottom lineNegotiators set the lowest price target first, that is the bottom line that they mi

54、ght be able to bear in the worst situation.The least acceptable price level basically serves to guarantee that编辑ppt-the transaction cost is covered, and-a little profit is made.The advantages of setting a bottom line for the price:A. It may help to prevent one side from accepting overly-harsh terms

55、and conditions proposed by the other side.B. It may help one side avoid losing potential benefits.C. With the bottom line in mind, the negotiators are likely to be cautious enough so as not to make a careless decision in haste out of moments excitement.编辑pptD. the bottom line tends to generate among

56、 negotiation team members a sense of being or working in unison, and prevents the team from falling short of success due to lack of sufficient effort.As sellers:Negotiators may quote the highest price within the price range or scope they have selected, leaving room for later concession;As buyers:The

57、y should quote the lowest price.编辑pptAs long as the price is reasonable and acceptable, as long as the offer is not out of line and indefensible,- the seller should be bold enough to risk asking a high price and -the buyers audacious（大胆的）（大胆的） in offering as low as possible.The reasons:A. The higher

58、 the selling price is or the lower the buying price is , the more leeway（余地）（余地）one can preserve for his or her company;编辑pptB. Doing so may exert great psychological pressure on the other side, diminishing their expectation;C. The price you quote may have an impact on how the other side assesses yo

59、ur strength; do not let the other side form a low opinion of your company.4. Quoting strategiesCase 4:Parts: an import and export company in New Zealand the Siberia Furniture and Decoration Company in Russia编辑pptBackground: An import and export company in New Zealand desired to export a batch of she

60、eps wool to the Siberia Furniture and Decoration Company in Russia.The New Zealand company made a quotation at the following prices:”New Zealand-made merino（美利奴绵羊（产美利奴绵羊（产细密的丝状羊毛）细密的丝状羊毛） sheep skin with wool, super grade, $28 per sheet; first grade, $25; second grade, $20, FOB, Auckland, 100,000 sh