Danish Team

Your team represents Dansk Meat A/S, a Danish firm exporting plants for processing turkeys into low-fat hams, bacon and sausage. In DM’s super-modern, ecological and ultra-hygienic plants the turkeys trot in the front door and pop out the back door two hours later as juicy sausages.

Last year you sold plants to Hungary, Mexico and Germany. Your new target market is China and you are now in Beijing on your fifth visit, hoping to conclude a sale.

Your prospective customer is China Foods, a big public sector company. Mr. Yi Er San, head of procurement, is a tough negotiator. You and Mr. Yi have agreed on all open issues except cost: he keeps insisting that your price is too high. But you have already reduced your offer by the 10% margin which your management had added to the initial quotation and you now have no room for a further reduction.

Your final offer to China Foods is DKK 2.2 million per unit, the lowest price your company has ever offered.

Nevertheless old Yi keeps hammering on the price issue and seems to expect further price concessions.

Your strategy has been to keep reminding Mr. Yi of the superior quality and efficiency of Dansk Meat’s plants, which your research confirms can command a premium price in China. But although you have built a good working relationship with Yi during numerous meetings and dinners, he smilingly responds that other foreign suppliers are offering better prices.

At last week’s meeting Yi even hinted that China Foods may decide to buy from Poland, the USA, or Italy unless you can offer him a “substantial concession.”

As you prepare for today’s meeting you continue to ponder ways to overcome Mr. Yi’s apparent obsession with price.

KEY ELEMENTS OF THE CHINESE NEGOTIATING APPROACH

Public sector counterparts

· Officials may expect bribes.

Both private and public-sector companies

· A w-i-d-e bargaining range, tendency to haggle.
· Negotiations tend to proceed relatively slowly.
· Frequent indirectness in language, often avoid saying ‘no’ directly.
· Mobile phones ring regularly during negotiating sessions.
– Great bargaining persistence.
· Frequent repetition of standpoints.
· Building guanxi with counterparts is very important.