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Negotiations - Учебные материалы
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Учебные материалы » The world of Business » English for Office and Business Conversations » Negotiations
Negotiations
MaruДата: Понедельник, 29.04.2013, 07:54 | Сообщение # 1
Your English Teacher
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Сообщений: 2562
Репутация: 101
Negotiation Advice

In the following conversation, Sally the Sales Manager for a large English company advises Geoff a new Sales Executive what he should do in his first negotiation.

Geoff:

'Hi Sally, you wanted to have a word.'

Sally:

'Yes Geoff, take a seat. I know that you are going to enter your first negotiation next week and I just wanted to go over a few things with you. I know it's obvious, but the main purpose of the negotiations is to make a deal with the other company. Remember, anything can happen until you have that signed contract in your hands. So be prepared and do your homework about the company, what they want, what they need and who our competitors are before you start.

Also, be aware that you're representing our company and that both our and your reputation is very important. I don't want you being aggressive and bullying them into signing the contract. It's not good business. Try to persuade them that they are getting the best service from ourselves. In this type of negotiation, were not looking for one-off deals, were looking to build up trust and confidence with them and obtain follow on business in the future with them. So don't try to negotiate for a zero-sum game.'

Geoff:

'Sorry Sally, but what does zero-sum game mean?'

Sally:

'It means that one side wins and the other side loses. It's good for one-off deals but it's the worst thing you can do when you want to build up a relationship. So negotiate for a win-win result, where we both benefit from the deal.

Because we're looking for follow on business from them, our margin on the deal doesn't need to be very high. But do not make a deal where we make a loss. All negotiations are about give and take, they will make a demand for more than we offer and you'll agree to it if they do something in exchange. I have no problem in you doing that. They will certainly ask for a reduction in the price. When they do, tell them the price is the price, that we can only do it if there is a reduction in the scope or size of the project. Make them aware that there will be a trade-off between the price they are willing to pay and the level of support, service or functionalities we can provide. This is normal when negotiating and it usually ends with each side reaching a compromise, in which both parties are satisfied, although both haven't got their ideal price or service level.'

So just keep me updated and if you have any problems, let me know.'


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MaruДата: Понедельник, 29.04.2013, 07:55 | Сообщение # 2
Your English Teacher
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Сообщений: 2562
Репутация: 101
Negotiation Updates

In the following conversation, Geoff a Sales Executive updates his manager Sally on how the negotiations he is involved in are progressing.

Sally:

'So Geoff, how's everything with your current negotiations?'

Geoff:

'Well, some are going well and some are going not so well.'

Sally:

'OK, well tell me first about the negotiations with Beaver.'

Geoff:

'It's not going well at all. In fact I don't think we're going to win the contract. We've reached a deadlock on the price of the project. As you know we made them a very reasonable offer, it was very competitive. They came back with a counteroffer on Monday where they not only wanted a 20% reduction in price, but also wanted to have 24 hour customer support instead of the 18 hours that we offered them. I told them that in what they are demanding, we could not do it, because we would make a large loss. But it didn't change anything, they won't budge.'

Sally:

'They were just seeing how you would react. You did the right thing by not reducing our offer. The worst thing you can do now is to panic and back down and give them a much lower price. I would advise you to give them time, they will know it's an unreasonable counteroffer. The negotiation is still in its early stages. There's a long way to go yet. Maybe it's not as bad as you think, at least the negotiations haven't broken down and they are still continuing. It's common for negotiations to stall over issues like this. I would think that it'll start again when they've had time to think about it. I negotiated with them 3 years ago and their chief negotiator tried to bluff me, by saying 'This is the price we'll pay. Take it or leave it!'. I told him we would have to leave it, and they changed their mind two days later. It was like a game of poker.'

Geoff:

'I hope so. Anyway, I have some good news about Clayton Logistics. It's progressing very well with them. We've reached a compromise on the price and scope of the project. They are very happy with the terms and conditions that we are offering them. In my opinion, I think they are ready to sign. I'm meeting them next week. So, I'll be hopefully brining back a 4 year deal then.'

Sally:

'Excellent. It's a big company and it should be good for a lot of follow on business. Oh, by the way, it looks likely that we'll have to renegotiate the Pemberton Contract. They're currently having a lot of problems because of the crisis and they contacted me about reducing the cost on their existing support contract. So, if you're not busy, I would appreciate if you could take care of it.'

Geoff:

'No problem.'


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MaruДата: Понедельник, 29.04.2013, 07:56 | Сообщение # 3
Your English Teacher
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Сообщений: 2562
Репутация: 101
Negotiating Price

Read the following negotiation between a television manufacturer and a components company for a 2 year contract for components. Bill is representing the television company and Fleur is representing the component company.

Fleur:

'So, we could supply you with 40,000 components per month, for a two-year period at a unit cost of $4.35 per component.'

Bill:

'There seems to have been a slight misunderstanding. You do realise that we want to order nearly a million components. And for that quantity, the price per unit does seem to be very high.'

Fleur:

'We have taken into account the size of the order you require. And we have reduced the unit price markedly from what we normally ask. In terms of unit price, what were you thinking of?'

Bill:

'Well, we were hoping for something around $3.40 per unit. Please bear in mind that we want to order nearly a million components, not a thousand.'

Fleur:

'$3.40 per unit. I am afraid that is out of the question. If we sold it to you at that price, we would be making loss on every unit sold.'

Bill:

'Well, we have received a quote from one of your competitors at $3.53 per unit.'

Fleur:

'I am afraid that we can't match that. But If I were you, I would be asking myself how can they sell the components at such a low price? I would say that they are sacrificing the quality of the component for price. But there may be some room for manoeuvre. If you were to increase your order to 50,000 components per months, then we could lower the unit cost to $4.15.'

Bill:

'For 50,000 units per month we wouldn't expect to pay more than $3.85 per unit. I would say that this price is the going rate for this quantity.'

Fleur:

'I don't think that we could go that far. Under $4 per unit. It's not enough.'

Bill:

'Well, could you meet us halfway? At $4 per unit?'

Fleur:

'If that's $4 per unit, 50,000 per month for 2 years. I think we can do that.'


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MaruДата: Понедельник, 29.04.2013, 07:57 | Сообщение # 4
Your English Teacher
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Сообщений: 2562
Репутация: 101
Delaying in Negotiations

Read the following two business negotiations where the buyers are trying to delay making a decision. In the first, the negotiation is for a service contract for IT support. In the second, the negotiation is for a contract for television components.

Negotiation One
Seller:

'So, here's a copy of the support contract that we're offering you.'

Buyer:

'Do you mind if we have a few minutes to go over it?'

Seller:

'Not at all. Take your time.'

20 minutes later

Seller:

'As you can see, we're offering you an excellent deal with full 24 hour on-site and off-site support.'

Buyer:

'It looks good. Could you clarify what exactly this means in your proposal?'

Seller:

'It means that if there is a serious problem then the on-site support team can contact one of our senior developers. If they can't resolve the problem remotely they will come on-site within 2 hours. Does that answer your question?'

Buyer:

'Yes it does.'

Seller:

'Well, if that's all, shall we start to talk about money?'

Buyer:

'Sorry, before we move on, we require clarification of your procedures for data confidentiality.'

Seller:

'Well, as is standard in the industry, all our staff have to sign a data confidentiality agreement before working with any new client. This prevents any external use of data.'

Buyer:

'Sorry, I'm still not clear about it!'

Seller:

'I have a copy of a confidentiality agreement here with me. Have a look at it.'

5 minutes later

Seller:

'Does that answer your question?'

Buyer:

'I'm afraid that it doesn't say anything about performing criminal background checks on your staff. We're a bank and it's necessary that anyone who works for us has had one done.'

Seller:

'Of course they are carried out.'

Buyer:

'I'm afraid that we need it on paper before we can do anything. Can you put that in writing?'

Seller:

'No problem, I'll send that to you today. And do you want to know our price?'

Buyer:

'Send it to us when you send the copy of the checks procedures.'

Seller:

'Ok. Do you want to meet again this Friday?'

Buyer:

'I'm afraid that we can't do this Friday. I'll let you know in a couple of days when we can meet.'

Negotiation Two
Seller:

'So, we'll reduce the price per unit to $4. It's a substantial reduction.'

Buyer:

'So, if I'm correct, you're now offering a 35 cent reduction on the price of each component.'

Seller:

'Yes. Do we have a deal?'

Buyer:

'I'm afraid that I need to check with head office before I can make any decision.'

Seller:

'No problem. I'll give you time to call them.'

5 minutes later

Seller:

'So, what's the decision?'

Buyer:

'My boss wasn't there, so I left her a voice message.'

Seller:

'You know you won't get a better price.'

Buyer:

'I appreciate what you're doing, but I have to wait for her to call me back.'

Seller:

'Ok, what if we offer you an extra year's guarantee. But it's on condition that you order today.'

Buyer:

'I'll make a note of that, but it's out of my hands. When my boss calls me, I'll tell her.'

Seller:

'It's a one-off offer. We can't keep it open.'

Buyer:

'I appreciate that, but I can't approve anything without the agreement of my boss first. So, my hands are tied. It's with my boss now.'

Seller:

'Maybe it's better if I spoke with her.'

Buyer:

'Look, this is going nowhere. I think we've both had a long day. I appreciate the concession that you've made, but I think we ought to sleep on it. I'll speak with you tomorrow.'


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Используйте код VEF438 для получения скидки 10 долларов при первой покупке.
 
MaruДата: Понедельник, 29.04.2013, 07:58 | Сообщение # 5
Your English Teacher
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Сообщений: 2562
Репутация: 101
Selling the Positives in a Negotiation

Read the following business negotiation between a seller and potential buyer for a contract to supply television components to a television manufacturer. The buyer is negotiating for a better price.

Seller:

'So, we can offer you 40,000 components at a unit cost of $4.35 per unit.'

Buyer:

'$4.35 per unit. Hmm.'

Seller:

'You don't seem entirely pleased. Could I ask you what the issue is?'

Buyer:

'We weren't expecting the price to be so high.'

Seller:

'It's an extremely competitive price for the quality of the component that you'll be getting.'

Buyer:

'As you are aware, we've had a number of different offers and in comparison with those, the price that you're offering us is a lot higher.'

Seller:

'I can understand why you're looking around other companies for offers. I do the same. I recently concluded a negotiation for microcircuits. I visited so many different suppliers. It's a very time-consuming process. At times it feels like it'll never end.'

Buyer:

'Yeah. I've been very busy with negotiating for this order for the last couple of weeks. This is the third meeting this week that I've had with a supplier about it. It's tiring.'

Seller:

'I can appreciate how you feel.'

Buyer:

'It's what we're paid for.'

Seller:

'True. Let's have a break.'

5 minutes later

Seller:

'Although you see the price is high, what I'd like you to consider is the quality of the product that you're obtaining. This component is not only the best built and most reliable on the market, it's also the most innovative and advanced. In fact, it won first prize at this year's Berlin TV component fair. So, what this gives you is the confidence that this component in two years time will still be at the cutting edge. Unfortunately, with some of the components on the market from other manufacturers, in six months they'll be obsolete.'

Buyer:

'It's something that we have taken into consideration, but the price you're asking is very high.'

Seller:

'Let's put the question of money to one side for the moment. You know that our company has one of the best reputations in the industry for not only the quality of the product and innovation, but also the quality control system in our factories. We have the lowest rate of returns of any company in the sector. So you know what you're getting, a cutting edge quality product with a negligible risk of failure.'

Buyer:

'The quality and innovation of the product is not in doubt. But the price is higher than we're willing to pay.'

Seller:

'I understand that you see the price as a little high, and I'm sure that you've been offered less. But how much do you spend each year replacing faulty components? What would you say if we guaranteed each of the components not for the standard 3 years but for 5 years. Plus, if one of your televisions breaks down due to a failure of one of our components, we'll not only replace the component for free, but also cover your labour costs of repair.'

Buyer:

'So, if I understand correctly, you offering a 5 year guarantee and you'll pay for all labour costs where one of your components has caused a television to break down?'

Seller:

'Yes.'

Buyer:

'Hmm.'

Seller:

'Don't give me an answer straight away. Think about it and get back to me.'


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MaruДата: Понедельник, 29.04.2013, 07:59 | Сообщение # 6
Your English Teacher
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Сообщений: 2562
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Dealing with Unreasonable Demands

Read the following two business negotiations where one side/party is being unreasonable in its demands or behaviour. In the first, the re-negotiation is for a service contract for IT support. In the second, the negotiation is for a contract for television components.

Seller:

'For a 2 year extension to the current service contract, the price will be $5 million.'

Buyer:

'It's a lot higher than what we paid for the current contract.'

Seller:

'To be honest, we've made a lost on the current contract with you. We've looked at the numbers and we can't lower it.'

Buyer:

'Let me just make sure I know what you're saying, for exactly the same contract as we have now, we'll have to pay $1.5 million more.'

Seller:

'As I said before, we've lost money on the existing contract we have with you. Plus, consider how much time and money it will cost you to change to a new service provider, at least $2 million and hundreds of hours of training and business downtime.'

Buyer:

'I don't think that I'll be able to sell this back at head office.'

Seller:

'As I said, to set up with a new provider will cost you more with higher risk.'

Buyer:

'What would you do in our position if you had to pay 33% more to extend an existing contract?'

Seller:

'I appreciate how you feel. It does seem a lot, but it'll cost you more if you change.'

Buyer:

'What do you think will happen if we don't agree?'

Seller:

'I suppose that you'll decide to give the contract to someone else.'

Buyer:

'So, would you prefer to lose the contract or make a concession? A price which is reasonable.'

Seller:

'Of course, we don't want to lose the contract, but we feel we've made you a very reasonable offer.'

Buyer:

'So you won't consider making a concession on price?'

Seller:

'I'm afraid it's the lowest price we can offer you.'

Buyer:

'Well, if that's your position, I'm afraid there's nothing else we can do! I think it's better if we finish the meeting now. If you reconsider your position, get in touch with me.'

Negotiation Two
Buyer:

'From our perspective, $4.35 per component is too much. We're not willing to pay more than $3.00 per component.'

Seller:

'So, if I understand you correctly, you're looking for $3.00 per unit for an order of 40,000 per month.'

Buyer:

'Yes.'

Seller:

'would you excuse us for a moment?'

Buyer:

'No problem.'

10 minutes later

Seller:

'Your offer is very low. For that price we would make a loss on each component we sold you. It wouldn't make any sense for us to agree to a contract with these terms.'

Buyer:

'We have found two suppliers who are willing to offer that price.'

Seller:

'But will they provide the same quality of product and guarantee of service and delivery?'

Buyer:

'Yes.'

Seller:

'What if we offered you each component at $4.15 on condition that you increased your order to 50.000 per month?'

Buyer:

'I appreciate the offer, but we're only prepared to pay $3. You do know that prices of televisions fell by 15% last year. We need to cut costs I'm afraid. So, are you willing to accept our offer?'

Seller:

'I understand what you're saying, but we simply couldn't do it. It would ruin us. How do you suggest we proceed?'

Buyer:

'I appreciate how you see it and I would like to make a compromise, but we have to save money somewhere!'

Seller:

'I think it's best if we have a few days to think about it.'


iherb.com - натуральная косметика, БАДы, товары для дома и детей и многое другое по очень низким ценам.
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Учебные материалы » The world of Business » English for Office and Business Conversations » Negotiations
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