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Lecture 3 Presentation and negotiation skills Contents 1 Types of presentations 1 2 Plan your presentation 3 Deliver your presentation 4 The negotiation process 5 Negotiation styles 6 Negotiation tactics 1. Types of presentations The proposals you deliver in the morning calls for a different approach from the toast you give at a banquet that evening. informative presentations: to tell persuasive presentations: to sell ceremonial presentations: to entertain 1.1 Informative presentations informative presentations briefings reports training explanations 1.1.1 Briefings -- short talks that give an already interested and knowledgeable audience members the specific information they need to do their jobs e.g. nurses and police officers attend briefings before each shift to learn what has happened since their last watch the executive chef of a restaurant briefs waiters about the details of the day’s menu specials the advertising account manager briefs the agency’s team about a client’s interests and quirks before an important meeting representatives attend briefings before they staff the company’s exhibit booth at a trade show Features of briefings: aim to get the attendees ready to do the job at hand usually don’t make complex arguments conversational and factual, not dramatic no more than 2-5 minutes organized in a simple way, usually topically or chronologically rarely contain presentational aids 1.1.2 Reports -- give your audience an account of what you or someone you represent has learned or done, or plan to do classification by audience: internal reports: given to superiors or colleagues external reports: given to clients, agencies or the general public classification by purpose: status/progress reports: e.g. contractor or architect’s report to client, quarterly financial report to board of directors, monthly marketing report to marketing manager, annual report to public final reports: e.g. Was a customer’s complaint justified? Why has our overhead increased 15% in the last quarter? Is there any gender bias in our hiring and promotions? feasibility reports: e.g. Will staying open 24/7 profitable? Can we afford to offer health insurance to part-time staff? Usual format of status reports: introduce the report (include your name and your role) review the project’s purpose state the current status, include the people involved and give credit for their contributions identify any obstacles you have encountered, and attempts you have made to overcome those obstacles describe your next milestone forecast the future of the project, and focus on your ability to finish the job by the scheduled completion date Usual format of final reports: introduce the report (include your name and your role) provide necessary background of the undertaking describe what happened at the level of interest appropriate for your audience (e.g. the challenges and actions, others’ contributions) describe the results tell listeners how to get further information Usual format of feasibility reports: introduce the report (include your name and your role) define the problem and explain its significance and consequences outline your criteria to evaluate possible solutions describe your methodology/approach in detail possible solutions evaluation of the solutions recommendation and conclusion (see “Feasibility Report Outline” on Page 34) 1.1.3 Training -- teaches listeners how to do something: e.g. operate a piece of equipment or use software, relate effectively with the public, avoid or deal with sexual harassment investment of time: McDonald’s, IBM investment of money: IBM can be done by experts: firms or freelancers, on a fee-for-service basis can be conducted by full-blown institutes, e.g. Disney, Anheuser-Busch, Dell, Harley-Davidson, General Electric can be very brief and informal: 75% Guidelines on designing and delivering training: planning a training program: define the training goal: the more specific, the better develop a schedule and list of resources: time, steps, staffing, delivering equipments, training materials choose the best training approach: lecturing, exhibits, diagrams, posters, live demonstrations, videos, site visit, coaching organize your presentation delivering the training: link the topic to the audience: make them know that the information will benefit them personally, e.g. show the payoffs that comes from listening start with an overall picture: sketch the highlights to make them less confused by your information trees emphasize the organization of your material: use number items, signposts, interjections, repetition, add internal summaries and previews cover only necessary information: they will ask for it if they need more 1.1.4 Explanations -- inform the listeners how a new program/measure will affect them, esp. when a firm faces a major change in its business, e.g. how the company’s new tax- reduction plan will increase their real income Guidelines on delivering explanations: avoid jargon: don’t be a techno-snob; tell people what they need to know in language they will understand link the familiar to the unfamiliar: people have the best change of understanding new things when they bear some relationship to something they already know Compare the two versions below: More confusing: Money-market funds are mutual funds that buy corporate and government short-term investments. More familiar: Money-market funds are like a collection of IOUs held by a middleman. The funds take cash from investors and lend it to corporations and the government, usually for between 30 and 90 days. These borrowers pay the fund interest on the loan, and that interest is passed along to the investors. 1.2 Persuasive presentations proposals -- you advocate your audience to take specific actions persuasive sales presentations presentations -- you persuade your audience to buy your products/services 1.2.1 Proposals external: e.g. to lobby the municipal government to loosen the building height restriction internal: e.g. to persuade management to reimburse employees for personal career training costs to convince your boss to give your department more staffing support to request a raise in pay Suggested organization of proposals: the problem-solution approach I. Introduce the problem a. Demonstrate nature of problem in terms the audience will understand b. Show undesirable consequences of the problem c. Highlight that the current situation is WRONG d. Provide causal analysis of the problem II. Provide a solution (with supporting evidence) a. Describe the positive results of your proposal b. Show how your proposal will avoid bad consequences c. Highlight why it’s the RIGHT thing to do d. Address the feasibility of your proposal by indicating cost, time, procedures Communication practice: Proposing a wellness program You are the HR manager of the DC company. The management of the company is now haunted by employees’ health problems. On the one hand, the health-related costs are increasing dramatically, especially insurance premiums and out-of- pocket expenses for employees in case of emergency. On the other hand, you have noticed that productivity of DC is declining due to growing absenteeism, lower work efficiency of workers who stay on the job, and higher turnover caused by employees suffering from serious illnesses. Now you’re supposed to propose a wellness program to the CEO of DC to address the health issue. Draft an outline in the problem-solution organization plan. A sample proposal outline: I. Health-related problems are hurting our company. [problem] a. Health costs are increasing. 1. Insurance premiums are increasing. 2. Out-of-pocket expenses for employees are growing. b. Productivity is declining. 1. Absenteeism is rising. 2. Workers who stay on the job are less productive. 3. Some employees are leaving us due to health problems. II. A wellness program could reduce the impact of these problems. [solution] a. Elements of the program 1. Nutrition education 2. Exercise education 3. Substance-abuse counseling b. Benefits 1. Healthier and happier employees 2. More productive employees 3. Lower heath costs (insurance and out-of-pocket) 1.2.2 Sales presentations formal: platform speeches in front of large audiences Informal: sit-down talks with small groups of decision-makers Guidelines on making sales presentations: establish client relationships before your presentation: the six steps of personal selling? try to talk informally with your clients to make you more knowledgeable about your audience and their needs, and make your audience more comfortable with you put your clients’ needs first: your clients don’t care about you and your product; they care about how to solve their problems; “True selling means being passionate about your company’s product or service and compassionate with the wants, dreams, needs of your fellow human beings.” (business educator Robert Kiyosaki) listen to your clients: questions and concerns are not interruptions, but a chance to learn more exactly what the client wants; “The great salespeople ask questions and have great listening skills. Poor salespeople get locked into script mode.” (business trainer Kevin Hogan) emphasize benefits, not features: it really isn’t features that will impress clients and motivate them to buy – it’s the benefits that will flow from those features close effectively: summarize the main benefits and call for action; think long term; “I’ve never been a believer in closing because my objective is not to close the sale but to open a relationship.” (business consultant Hans Stennek) for a sample sales presentation see Page 35-41 1.3 Ceremonial presentations welcoming a guest or group introducing another speaker honoring a person or institution giving a toast presenting an award accepting an award 2. Plan your presentation choose analyze define the develop an the objectives the thesis organizational situation pattern identify add plan the plan the main ideas supporting introduction conclusion in the body details & visual aids 2.1 Define the objectives review Lecture 1, 2.1 Sender strategy (general → action → communication) be as specific as possible Communication practice: Reword the following vague goal statements into more specific ones: I want to collect some I want to collect at least RMB100 Yuan donations at this dinner. from each person at this dinner. I want to get my I want my manager to give me one day per manager’s support for my week and the help of a secretary to program. develop my program. I want the audience has I want at least five people in the audience positive attitudes towards to ask me for my business card after my me and my company’s talk, and at least one person to schedule services. an appointment with me to discuss my company’s services. 2.2 Analyze the situation analyze the audience: review Lecture 1, 2.2 Receiver strategy analyze yourself as the speaker: review Lecture 1, 2.1 Sender strategy analyze the occasion: room arrangement or seating (see “Room arrangement options” on Page 42) lighting background noises staffing the hour of the day: 10 a.m. or 5:30 p.m. the length of time you are allowed to speak analyze the culture: review Lecture 1, 2.5 Culture strategy 2.3 Develop the thesis -- also called “key idea”, a single sentence that summarizes your message, and that every other part of your talk should support e.g. “We’re behind schedule for reasons beyond our control, but we can catch up and finish the job on time.” Methods for formulating a thesis statement: imagine that you met a member of your audience at the elevator and had only a few seconds to explain your idea before the doors closed imagine that you had to send a one-/two-sentence text message that communicated your main idea suppose that a friend asked one of your listeners what you were getting at today: what would you want the audience remember to say? Don’t confuse the thesis with the goal: goal thesis I want Krakos Grocery to Switching to Sun Valley Bread order Sun Valley Bread. will increase your sales. Parents will be confident Our preschool curriculum may that their children are being look like nothing but play, but it prepared for later schooling. is based on sound educational Audience members will be theory and research. able to respond to sexual You don’t have to accept harassment instead of sexual harassment. accepting it. Recent advances have I want to acquire new changed my field dramatically customers seeking state-of- in the past few years. the-art technology. 2.4 Choose an organizational pattern First, tell them what you’re going to tell them; Then, tell them; Finally, tell them what you have told them. The standard format (the safest in the business field) Introduction: a. Attention getter b. Thesis Body: a. … b. … c. … (no more than five main points) Conclusion: a. Review b. Closing statement Organize the body: Inexperienced speakers make the mistake of starting to plan a talk by beginning at the beginning. This is like trying to landscape a piece of property before you’ve put up a building. choose the best organizational pattern for your body: informative: chronological, spatial, topical, cause- effect persuasive: problem-solution, criteria satisfaction, comparative advantages, motivated sequence (attention – need – satisfaction – visualization – action) for detailed description of the above patterns, see Page 43-51 2.5 Identify main ideas in the body A presentation should contain no more than five main points: people have difficulty recalling more than five pieces of information when it is presented orally. All points should develop the thesis. Each main points should contain only one idea. e.g. Business discrimination on the basis of age and sex. Main points should be stated as claims (vs. simple three- or four- word phrases). e.g. • choosing a physician →It’s essential to choose a health care provider from the list of approved doctors. • sexual and ethnic discrimination → Allowing sexual or ethnic considerations to intrude into our hiring decisions isn’t just bad judgment; it’s illegal. • demographic changes in the market → Due to demographic changes, we can expect our market to shrink in the next 10 years. Main points should be parallel in structure whenever possible. 2.6 Plan the introduction Functions of the introduction: capture the listeners’ attention: esp. when they are ordered to attend, or their minds are somewhere else give your audience a reason to listen set the proper tone for the topic and setting: put them in a good mood, prepare them to think seriously, or to establish rapport establish your credibility, if necessary introduce your thesis and preview your presentation Case study: An insurance agent’s start An insurance agent introduced a 30-minute talk to a group of 20 prospects. Do you think his introduction fulfills the five functions mentioned above? Being an insurance agent gives me a lot of sympathy for tax collectors and dog catchers. None of us has an especially popular job. After all, it seems that with life insurance you lose either way: If the policy pays off, you won’t be around to enjoy the money. On the other hand, if you don’t need the policy, you’ve spent your hard-earned savings for nothing. Besides, insurance isn’t cheap. I’m sure you have plenty of other things you could use your money for: catching up on bills, fixing up your house, buying a new car, or even taking a vacation. With all those negatives, why should you care about insurance? For that matter, why am I devoting my career to it? For me, the answer is easy: Over the year, I’ve seen literally hundreds of people – people just like you and me – learn what a difference the right kind of insurance coverage can make. And I’ve seen hundreds more suffer from learning too late that insurance is necessary. Well, tonight I want to give you some good news. I’ll show you that you can win by buying insurance. You can win by gaining peace of mind, and you can eve win by buying insurance that works like an investment, paying dividends that you can use hear and now. Types of opening statements: ask a question: e.g. “Is it just me, or does anybody here feel we’ve spent too much time filling in forms?” tell a story use humor: e.g. “Some people say that problems are not problems; but rather, they are opportunities. If that’s the case, then given the present situation, we are faced with a hell of al lot of opportunities.” present a quotation: use a source with high credibility to back up your message make a startling statement: an excellent way to get listeners’ attention is to surprise them; don’t offend them refer to the audience: mention your listeners’ needs, concerns or interests; e.g. “I know you are all worried by rumors of cutbacks in staff. I called you here today to explain just what the budget cuts will mean to this department.” refer to the occasion: e.g. “We’re here today to recognize some very important people.” 2.7 Plan the conclusion the conclusion should contain: the review: a restatement of your thesis and main points to reinforce your idea the closing statement: to create a favorable impression, and give your remarks a sense of completion; “You shouldn’t leave your audience wondering whether you’ve finished.” A closing statement can be: any of the techniques used in the introduction the ending of the story you told in the introduction rewording of your opening statement/thesis an appeal (asks for action) a challenge (demands action) see “A Complete Presentation Outline” on Page 52 2.8 Add supporting details and visual aids 2.8.1 Transitions Listeners do not stay oriented as easily as readers; they may not even remember what you are talking about unless you use transitions. use strong transitions: ineffective: Secondly effective: “The second recommendation is …”, “Let’s move on to the second recommendation.” Use repetitive transitions: between each major section and subsection , use a backward look/forward look transition e.g. “Now that we have looked at the three elements of the marketing plan, let’s turn to the financial implications of the plan.” 2.8.2 Facts do research and collect as many facts as you can choose only those facts that will get your thesis across remember the “KISS” rule: Keep It Short and Simple bring along extra facts for answering questions or involving in the subsequent discussion prepare handouts for complicated facts 2.8.3 Visual aids Functions of visual aids: add interest, variety, and impact remain in the memory longer than just words reach 40% of your audience who are likely to be visual, rather than auditory, learners for a thorough guide on PowerPoint slide design, see “PowerPoint: The Rules of Design” How to provide visual aids: translate your outline into draft slides tie your slides together with connectors: same numbering system in the agenda and in the slide heading same phrasing in the agenda and in the slide heading repeated agenda slide design or choose your Slide Master (幻灯片模版): virtually all of the PowerPoint templates are inappropriate for business presentations: too much visual distractions at least choose a plain one: less is more avoid the “fruit salad effect”: use four distinct colors as the maximum choose a visible color combination: background and text colors should contrast sharply select a sans serif font (非衬线体), e.g. Arial, Verdana, Calibri make sure your letters are large enough: 28-32 point for headings, 18-24 point for text, and 14 point for labels avoid using ALL CAPITAL LETTERS or Title Case: slow down the reader and impair readability use bold and italics sparingly: for emphasis only design and edit individual slides: use message titles, not topic titles, as headings: e.g. “Company rankings” vs. “Company B ranks second. design tables and graphical charts to show “how much”, and concept diagrams to show “how” design text slides to show “why” and “how” avoid overload: not as word-for-word scripts/documents, but with key ideas only; the “six by two” guideline (six bullet points per slide, two lines of text per bullet) use telegram language: “ABC has continued the push for globalization of purchasing.” → “ABC pushes for globalized purchasing.” do not use bullets unless you have at least TWO bullets to list use animation to focus audience attention and to highlight: avoid excessive animation and use the simplest “Appear” effect as the norm check for errors: grammar and spelling errors are “credibility killers” next Table TEXT TEXT TEXT TEXT TEXT Title A Title B Title C Title D Title E Title F Line chart 380% 230% 300% 160% 150% 70% 50% 100% Year 00 01 02 03 04 05 06 07 Text in here (unit: %) Bar chart 140 12 120 30 100 90 15 65 80 23 60 30 88 40 30 33 65 30 20 20 10 25 0 1 2 3 4 5 A B C 3-D Pie Chart Text2 Text3 Text1 Text4 Text6 Text5 back Diagram Add Your Text Add Your Text Add Your Text Add Your Text Add Your Text Add Your Text Add Your Text Add Your Text Diagram Text Text Text Add Your Text Add Your Text Add Your Text Diagram Add Your Text Add Your Text Add Your Text Text Add Your Text Add Your Text Add Your Text Diagram Title Add your text ThemeGallery ThemeGallery is a Design Digital is a Design Digital Content & Contents Content & Contents mall developed by mall developed by Guild Design Inc. Guild Design Inc. Diagram Text Text Add Your Title Text Text Diagram 1 2 3 ThemeGallery is a ThemeGallery is a ThemeGallery is a Design Digital Design Digital Design Digital Content & Contents Content & Contents Content & Contents mall developed by mall developed by mall developed by Guild Design Inc. Guild Design Inc. Guild Design Inc. Diagram 2001 2002 2003 2004 Diagram ThemeGallery is a Design Digital Content & Contents mall developed by Guild Design Inc. Add Your Text Text Add Your Text Text Add Your Text Text Add Your Text Text Add Your Text Text Progress Diagram Phase 1 Phase 2 Phase 3 Cycle Diagram Add Your Text Text Text Text Cycle name Text Text Block Diagram Add Your Text Add Your Text concept Concept Concept Concept Organizational chart CEO Sub Department Sub Department Sub Department Sub Department Sub 01 Sub 01 Sub 01 Sub 01 Sub 01 Sub 01 Department Department Department Department Department Department Marketing Diagram Concept Concept concept Concept back 3. Deliver your presentation 3.1 How to get over stage fright Fear of public speaking ranks as American NO.1 fear – ahead of both death and loneliness. Practice is the golden rule: a well planned speech does not guarantee an equally good speech, if there is no practice practice makes confidence rehearse your presentation 3-6 times: on your feet, before an audience, in the real setting if possible always check your slides on the big screen (not just on the computer monitor) in your rehearsal Notes is the security blanket: use short phrases for each point tie your notes to your slides: print out slides, and then add your notes around the slide copies include about 5-mins’ worth of info on each note card: no need to constantly change cards use large enough lettering: can be read at arm’s length add reminders to yourself: e.g. “Stand upright!”, “Eye contact!”, ”Pause!” Last-minute physical relaxation techniques: take a hot shower breathe deeply exercise specific body parts: neck and throat, shoulders, arms, hands, face avoid drinking milk drink warm liquids, e.g. herbal tea, water with lemon try chewing gum Last-minute mental relaxation techniques: think positively: you don’t have to be perfect, because nobody is your audience are friendly people; image you are speaking to a friend, not to a group repeat positive words or labels, e.g. “I’m excited” rather than ”I’m scared” remember that you probably look/sound much better than you think you do meet, greet and talk with the audience before you start do not think while you are speaking: turn off your internal self-analysis, and focus on your objectives and ideas 3.2 Nonverbal delivery skills posture: stand in a relaxed, professional manner – comfortably upright, squarely facing your audience, with your feet aligned under your shoulders (neither too close nor too far apart), without rocking, swaying or bouncing gesture: avoid nervous-looking gestures, e.g. hands on hips, hands clasped in back; avoid “authority killers”, e.g. flipping your hair, waving your arms randomly facial expression: relaxed, interested and animated; avoid a stony, deadpan expression; vary according to the subject; avoid smiling when talking about something sad/negative eye contact: start by looking at the friendly faces, and then connect with others in the room; avoid looking continually at your notes, the screen, the ceiling, the floor, or a single listener; avoid fake eye contact, e.g. “eye dart” or “lighthouse scan” volume: speak loud enough to be heard by the people in the back row of the room; vary your volume to add interest seating: horseshoe, round table, or classroom? height: speak on the platform, or sit in front of or around your audience? dress: dress appropriately for the audience, the occasion, the organization, and the culture; the safest choice: traditional business suit see “Common Interpretations of Speaker’s Body Language” on Page 53 3.3 The Q & A session 3.3.1 When to take questions inform your audience at the beginning of the presentation: “Please feel free to ask questions whenever they come up. ” “Please hold all your questions until the end of the presentation.” “Feel free to interrupt with questions of understanding or clarification, but since we only have an hour together, please hold questions of debate or discussion until the end.” 3.3.2 How to take questions prepare in advance: anticipate possible questions, e.g. value (“What will happen if we do this?”), cost (“Can we do it for less?”), action (“How can we do it?”), details (“What is your source?”) ask a colleague to play the devil’s advocate during your rehearsal bring along extra information treat questioners with respect: listen carefully to make sure you understand the question paraphrase complicated questions to make sure you are on the right track while listening, maintain eye contact, nod and do not interrupt stick to your objective and organization: esp. when answering questions during the presentation if possible, divert the question back to your main ideas keep everyone involved: call on people from various locations avoid a one-to-one conversation with a single listener while answering, maintain eye contact with the entire audience avoid ending your answer by looking right at the questioner 3.3.3 What to say if you don’t know the answer if you don’t know: say “Sorry I don’t know/I don’t have the exact figure.” suggest where the questioner might find the answer offer to get the answer yourself: “I don’t know the market share in that country, but I’ll look it up and email it to you by tomorrow morning.” never HAZARD A GUESS! if you need some time to think: repeat: “So you’re wondering how to deal with this situation.” turn the question around: “How would you deal with this situation?” turn the question outward: “How would the rest of you deal with this situation?” reflect: “Good question. Let’s think about that for a moment.” write: write down the main points of the question if there is a whiteboard 3.3.4 How to answer challenging questions confusing questions: long, multi-faceted, or overly broad paraphrase the question, and refocus to make it appropriate for your objective if the questioner repeats it: “I wish we had more time so we could discuss this in detail.” “Let me explore that in more detail during the tea break/after the presentation.” controlling questions: statements or comments do not say “So what exactly is your question?” thank the questioner for the interest and the comments, paraphrase the ideas and then go on with your due course hostile questions: take a deep breath, identify the hostility (“I understand you feel upset about this.”), and answer the question nonemotional and nonpersonally try to find a common ground: “We’re both trying to do what we feel is in the customer’s best interest.” Some final tips: arrive earlier than the scheduled time: allow yourself 10-15 minutes to get familiar with the place, talk to some listeners, and check the equipment check all equipments YOURSELF do not distribute detailed printed materials before you speak: it will become a public reading, rather than public speaking put the note cards in front of you on the lectern; begin the talk without looking at the notes keep water nearby, in case you have dry mouth ask someone (not your cell phone) to watch the time for you, if not arranged keep eye contact throughout the speech if you wish to point on-screen, stand to the left so that you can point at the beginning of each line; do not use the laser pointer, because the dot is too tiny and shaky to be seen state your transition before displaying the new slide learn to pause: “The right word may be effective, but no word was ever as effective as a rightly timed pause.” (Mark Twain); inexperienced speakers are often too nervous to pause, which only makes their listeners tired do not emphasize mistakes: simply go on, and adjust your remarks to make the error less noticeable be comfortable with fillers: e.g. “uh”, “well”, “you know”; occasional, but not habitual, distracting if you run out of time, don’t try to rush through every slide; instead, elaborate your main points and skip others end the Q & A with a second closing statement keep the closing slide visible at the end of your presentation and during Q & A do not pack up early: a nonverbal signal that you are in a hurry see “Tell/sell Presentation Checklist” on Page 54 4. The negotiation process Negotiation: -- 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 4.1 Before the negotiation 1. 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) 3. 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 4. 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 4.2 During the negotiation 1. Opening: exchange greetings and aims to set the “climate” for the later communication, establish some common ground before moving into areas of difference, esp. Japanese (slow start, value trust more than agreement), e.g. I’ve been long hearing of you and your company, and I’m very pleased to know you in person. We’re very glad to have the chance to visit your factory. I do hope I can make a substantial deal with you today. Hi Mr. Binley, 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? 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 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 negotiation The seller: Mr. Wang, the Export Manager of a Zhejiang- based 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? 5. Negotiation styles Possible negotiation outcomes: Win-win Win-lose Lose-win Lose-lose 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 6. Negotiation tactics Questionnaire for negotiating skills 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 identify 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 make the other party seem unreasonable: to challenge the validity of a proposition, e.g. Your company, as the seller, is responsible for any delay to the contract. – Normally yes, but you know, the seller cannot be responsible for events over which he has no control, such as war or riots. be personal and emotional: be dramatic and sometimes sentimental, as everybody can be charmed and touched, e.g. If we were not friends, I will have no way to quote you such a rock-bottom price. Oh, you are really tempting me! Oh believe me, you drive me to a tight corner. We don’t have any profit margin in that case. This is our latest design. I have to say you have incredible taste. After-class assignments 1. Communication practice The following presentations all have some problems in the body. Identify the problems and correct them. Presentation 1: Thesis: Allowing employees more latitude in choosing their work hours is good for the company and for the workers. a. Flexible scheduling is a relatively new idea. b. Flexible scheduling improves morale. c. Flexible scheduling reduces absenteeism. Presentation 2: Thesis: We can reduce operating costs in various ways. a. Reduce wattage in lighting fixtures. b. Hire outside data processing firm to handle seasonal billing rather than expand permanent in-house staff. c. Sell surplus equipment. d. Reduce non-business use of copying machines. e. Reduce temperature in less-used parts of the building. f. pay overtime rather than add new employees. g. Retrofit old equipment instead of buying new machinery. Presentation 3: Thesis: Many local businesses continue to discriminate against some job applicants. a. Business discrimination on the basis of ethnic background. b. Business discrimination on the basis of disability. c. Business discrimination on the basis of age and sex. Presentation 4: Thesis: Many local businesses continue to discriminate against some job applicants. a. Discrimination against minorities. b. Disability is another reason for discriminating against some job applicant. c. Some businesses even refuse to hire employees who are over 65. d. Women often have extra trouble finding a job. 2. Case study: Negotiation tactics The seller: Mr. Fang, the Manager of an import & export company which produces gifts and decorations for Christmas, Easter and other traditional holidays The buyer: Mr. Leeser, the General Manager of a German wholesaler The setting: In a trade fair in Guangzhou, Mr. Leeser walks into the booth of Mr. Fang’s company, and is attracted by the exhibited products. Your task: Based on the negotiation styles and tactics we’ve discussed, evaluate the performance of both parties in the negotiation. 3. Communication Practice: Lisa’s late arrival Read Lisa’s case on Page 55. Work with your partner to role-play Lisa and her boss Marion. The ideal outcome of the negotiation is to reach an agreement on Lisa’s working hours that meets both side’s needs.