The exporter should use the following check list of the questions to ascertain whether the preparation for the negotiation is complete or not.
1. What are the objectives of negotiations?
2. What are the main issues to be included in the agenda?
3. What are the main strengths?
4. What are the main weaknesses?
5. Who has the strongest bargaining power?
6. What concessions may be made, and how?
7. What are the maximum and minimum limits of concessions?
8. What aspects are negotiable?
9. What aspects are not negotiable?
10. What are the expected offers requiring counter-proposals?
11. What will be the strategy and tactics?
12. What will be the opening offer?
Critical Points for Preparations for Negotiation
The exporters should bear in mind the following points while preparing for negotiations. They should:
1. Obtain as much background information about the subject to be discussed from the other side as possible.
2. Assess the other party’s strength, weakness, and perceived need and negotiation strategies.
3. Study the culture of the other party and negotiation style.
4. Identify their needs.
5. Determine their bargaining range and the best option in a negotiated agreement.
6. Prioritize and determine the cost of the concession that they are prepared to make.
7. Prepare for price or other objection in advance.
8. Develop a negotiating strategy and plan of action.
They should however, ensure that they do not :
9. Enter in to negotiations without preparation.
10. Access the other party’s position and behavior on the basic of their own culture or background.
11. Develop negotiation strategies based on assumptions.
Critical points during the Negotiations
During the negotiations, the exporter should:
1. Adopt cooperative tactics but be ready to use a competitive approach when warranted.
2. View negotiating as an opportunity to build a rewarding working relationship that is mutually beneficial over the long term.
3. Project confidence, credibility and professionalism.
4. Search for common goals, interests, need.
5. Concede low-value items in the early stages to initiate reciprocity.
6. Give explanation when rejecting an offer.
7. Use such openers as “yes, but…..”, “What if…?” or “if… Then…” when making a counter-offer.
8. Know when to listen; ask well conceived questions and maintain two-way communication.
9. Make full use of the four “p’s” of marketing in the negotiation instead of relying on the price issue only-product, promotion, place and price.
10. Refer to the price quotations with qualifiers such as: “about, ““approximately,” “roughly,” and “in the range of,” as it sends a message that there offer is open for negotiation.
11. Summarize regularly the agreed item to insure that there understood by both side before proceeding other issues.
12. Ensure that the other party participates fully in the negotiating process and fills “ownership” of the option being discussed.
13. Keep personalities out of the negotiation; concentrate on the problem.
The exporters should ensure that they do not:
14. Underestimate the other side.
15. Make concessions, even minor ones, unless they ask for something in returns or wish to encourage a more cooperative approach from other side.
16. Make too many concessions in the earlier stage of negotiation.
17. Make final, best or non-negotiable statement in the early stage of negotiation.
18. Rush into hasty decision and calculation.
19. Accept an offer at the first stage of negotiation.
20. Rejects offers without asking more questions.
21. Make their moves based on assumption.
22. Change the price unless they change the pricing package.
23. Get involved in the non essential, controversial or personal issue.
24. Use such words as: “to tell the truth,” “honestly speaking,” “frankly.”
25. Agree to an offer until all the elements to be negotiated have been discussed.
26. Make promises that they cannot fulfill.
The exporter should remember that:
27. The other person has the authority to negotiate the deal.
28. Small price concessions may have a major impact on the profit over the long run.
29. Most major concessions are agreed to near the end of the talks.
30. The party without time constraints has an advantage.
31. The party that asks most of the questions is likely to obtain a better agreement.
Concluding the negotiation is an art; it needs to planned in advance as and when the negotiations would be closed by the exporter. The next section deals with issue involved in closing the negotiation
Closing negotiations :
The exporter should:
1. Anticipate last-minute demands when planning their negotiating strategy and tactics.
2. Agree to an agenda that reflects their objectives and to realistic deadlines.
3. Listen to the other party’s objection and ask why they are not agreeing.
4. Emphasize the benefits to be gained by the other side by accepting their proposal.
5. Look for a change in the pattern, size and frequency of the other party’s concessions.
6. Overcome objection by giving clear explanation.
7. Take notes throughout the discussions, including their own concession and the ones made by the other party.
8. Make their “last offer” credible and with conviction.
9. Examine the draft agreement and clarify any points that they don’t understand, before signing.
The exporter should not:
1. View closing as a separate step in the negotiations.
2. Be in a hurry to close.
3. Make large concession at the last minute.
4. Rush into costly concession because of deadlines.
5. Push their advantage to the point of forcing the other side to live the negotiations.
6. Lose sight of their long-term objectives when getting locked on minor issue.
7. Become too emotional when closing (they need to think as clearly as possible) the negotiations.
8. Discuss the deal with the other side once they have agreed (They run the risk of reopening the negotiations).
The exporter should remember that :
1. Flexibility is heart the heart of closing a deal.
2. Experienced negotiators plan their closing tactics during their preparation for the negotiations.
3. Successful negotiators follow their pre-set goals and concentrate their efforts on essential issues.
4. Encourage the other party to close, when the time is appropriate, since many negotiators either fear or do not know how and when to close.
5. The best time to close is when both sides have achieved their expected goals.
6. Close only if the deal is good, not only for them but for the other party as well.
7. The notion of closing varies in different part of the world because of cultural factors requiring closing techniques.
8. Closing is not done in a hurry.
9. Overcoming objection is a part of getting approval of proposal.
10. Successful closures seek consensus.
11. Buyers often say “no” one more time before saying “yes’.
12. Nothing is agreed until everything is agreed.
13. Not all negotiations lead to closing on a deal-sometimes no deal is better than a bad deal.