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

InputRFP

Technical

Reports

Establish negotiation priorities &

potential trade offs

Identify sellors/purchas

ers likely approach

Prepare negotiation

plan Identify sellors/purchas

ers 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