Trade Management Module 7

Trade Management Sales Negotiation Sales Documents Sales Order Work Order Invoices

Trade Management Sales Negotiation Purchase Documents RFP/RFQ Purchase Order Specification Contract

Trade Management Sales Negotiation Negotiation Strategy Determine final scope from RFP and selected proposals Confirm budget Determine elements on which there is flexibility Define non negotiable Primary “Key” (proposed v target) Secondary (proposed v target) “Walk-away” negotiation factors

Trade Management Factors to considered Price Scope Schedule Milestones/deliverables Performance measurement/ SLA’s/Incentives Specification Final acceptance criteria Warranty period Warranty Maintenance Invoicing/payment Terms and conditions

Trade Management Sales Negotiation Strategy V Tactics Strategy Identify objectives Collect intelligence Plan tactics Tactics Use negotiation techniques

Trade Management Conducting Negotiations Prepare an agenda for the meeting Negotiate with the right people (authority to negotiate) Avoid quick and hurried negotiations Confirm all of the requirements, expectations and supplier promise in writing Use your contract Lock down the scope of works Strive for a “win-win” negotiation outcome Do not be undersold Protect your interests Use payment as leverage Beware of “ automatic renewal “ clauses

Trade Management Sales Negotiation Techniques “win-win” Salami To reach a goal by using small, consistent steps Good cop/Bad cop Act surprised Walk away Develop power Competition Legitimacy Knowledge

Identify negotiations issues & objectives Determine overall negotiation approach Assess bargaining strengths and weaknesses of the parties Tailor Team Input RFP Technical Reports Input RFP Technical Reports Establish negotiation priorities & potential trade offs Identify sellors/purchasers likely approach Prepare negotiation plan Prepare negotiation plan Identify sellors/purchasers likely approach Brief management on the plan Prepare a negotiation plan

Trade Management Sales Negotiation Inter-cultural negotiations (sales, purchases, alliances) Salacuse (2005) lists 10 ways that culture can impact negotaition Goal Attitudes- Win/Win ( collaborative) Win/Lose (confrontational) Personal styles – high impact from culture Communcation Time sensitivity (high:low) Emotionalism Agreement form- contract Agreement building- detailed (a deductive process) /specific (an inductive process) Team organization- know how the other side is organized ( commitments, decisions made, leader) Risk Taking