As seen in previous issues to learn to communicate with China is vital, in this issue we delve into the complexities involved when to negotiate. Many of what we try we have seen in previous topics but the emphasis and repetition is for me the basis of any negotiations with China. The negotiations are complex in themselves, but if we add the cultural difference and language barrier becomes a real challenge.
From my point of view we must consider the next 6 points when negotiating with China:
1. Structure of Negotiation:
Es vital y fundamental ir preparados a una negociación, sobre todo si es el primer encuentro, ya que es la percepción e imagen que guardarán de ti y tu empresa para futuras relaciones. Por lo general los chinos son bastante barullones, les gusta saltar de un tema a otro. Debemos ser nosotros quien organicemos y estructuremos las bases de la reunión y asegurarnos que antes de empezar con un tema nuevo el anterior queda resuelto. Son muy evasivos y si no les interesa o no conocen la respuesta intentarán desviar la atención a otros temas. Es importante preparar un buen guión de la reunión y dar una copia a cada uno de los asistentes para que se ciñan al plan y si puede ser en chino mejor!! Ya que la traducción de los contents are often misunderstood or even not translated if there is no real interest.
2. Bridging Cultures:
The jump between Western and Eastern cultures is enormous and at the time of the negotiation that stands out even more. If we compare the styles of negotiation:
- The Chinese tend to guide the negotiations in terms of personal / West tends to guide negotiations on the basis of available information.
- The Chinese value on status and hierarchy / West values \u200b\u200bmore skill, agility and go straight to the point.
- The Chinese are patient, indirect and very thoughtful / Westerners are impatient, aggressive and direct.
As you can see we are almost or completely opposed on many matters which creates stress and tense situations for the 2 sides equally. This makes Westerners often see the negotiations with China dishonest, inefficient and are not well educated. By contrast China sees us as emotional and not very friendly.
I think it's important before any negotiations create the right atmosphere, this means starting right ... use the right attitude and take the time to create a positive environment. For Westerners always want to go straight to their culture and this is not well seen. If we enter in good standing the Chinese say "let's see we can make "the wrong foot ... the Chinese will try to use any small obstacle as an excuse not to go ahead. We should be us who believe this atmosphere, because we are at home and we must adapt to their culture.
As I said before, Westerners want to go straight to the point, so many times the patience of the Chinese or attitude ends up causing us stress and frustration ... we should not express this stress even feel it, because they only show them something not right. And if it can detect that there is no negotiation ... is highly valued personal relationships the ability to stay calm, we must be able to remain calm and a friendly tone throughout the session, no matter how serious the problem. It can be serious and compelling without losing your cool.
Another issue that causes us great stress is the time usually taken to respond is more often out of a negotiation and you think they'll try to give the issue a response and when he returns remain unanswered. If it is wait and we know they are, we can avoid stress and learn to be patient. No longer a negotiating strategy to see our reactions. But yes it must be emphasized because it is resting on their laurels! The same happens with e-mails, quotes etc.
The Chinese are also good in the techniques of silence, sit and remain silent for no apparent reason ... the West have always felt that we say something is not the case. It is a tactic to analyze yourself and see your reactions. Mastering this technique in reverse helps a lot, they do not expect us to respect the silence ... so if we see their reactions as well. Especially negotiating prices, silences make the seller be nervous because he wants to close the sale and often lower the price without having said a word!
When a deal Westerners always consider the quotations or contracts as a stone inscription. For them it is a way to start the project but always feel entitled to redress if something changes ... exchange rates, rising oil ... any excuse to raise prices and skip the contract. Be very careful with this issue, bear and never confirmed a price point that actually the order is confirmed and released. Decisions in China are not final even if it is final!
We have already spoken of the "NO" in Chinese culture, but we must remember ... it's rare to hear them say something you do not, their answers are always "ok, we'll see" or "may be" ... even for their own employees is difficult to interpret. You may come to see his boss to introduce a new project and the chief answer "Ok, we'll see" and never talk about it again.
A part of the "No" should be able to analyze the body language
- If a Chinese man smiles in a negotiation when your boss is talking is usually interpreted as that they have understood and can be expected some reaction to your favor.
- Instead, a laugh between them usually means they are angry rather than happy but can not lose their appearance.
The best bet in these cases is always accompanied by an interpreter who can easily identify these signs, and if they do not know who speak it better!
3. Negotiating Style: From my point
of view there is only one valid way of trading in China, which is oriented collaboration, prospects for the future and create personal ties. Avoid negotiating styles as
- "Zero-Sum" is basically when the buyer tries to squeeze the seller to get almost the cost. This type of negotiation creates a great pressure on the supplier, provided there is a limit as far as one can get lower price! It may be that success is achieved with this technique, but the Chinese are clever and always manage to keep their margins ... how? Easy as changing materials, vendors, etc ... the end result a great price and product disaster.
- "Hard-Ball": This style focuses on the total inflexibility, where only one party ends up winning. Such companies often try to provide materials themselves to avoid changes as we speak in the old style. The end result is disastrous, lack of confidence and little interest by the supplier.
- "Adversarial": One side sees the other as an adversary or competitor rather than a partner or collaborator. This style is often used when there is a lot of complaints ... where we try to find a culprit. It can be very useful in some cases, but in the long term does not end on good terms.
4. Future Value (Claims and conflicts):
The future value that the Chinese have of yourself or your company is the key to getting their support or backing to a problem, either in quality, service, etc. Even as a small or of little value to them at the time, we must know how to build an image or a vision. In European or American companies are accustomed to when a quality problem must be agile solving the problem ... remove the defective product replacement, repair ... whatever it takes to satisfy customers and not lose our image. In China the first thing they do is look surprised, then deny it, are not responsible and most likely is that we do not receive a response! But if we get a good view of future is possible to settle it and even take responsibility for at least part of the problem.
5. External pressures:
Whenever possible, especially if it comes to prices, we should structure our negotiations based on external factors that you can not control. This gives the Chinese an opportunity to help achieve something, you feel part of it! In the case of prices must not limit has never "need this price, we must explain why, and if we involve an official release, a competitor, rules ... we take off the weight of wanting more room and avoids a lot of personal confrontations! If can justify or document it will be more credible.
6. Pricing Objectives:
As you know the Chinese are very agile when it comes to money, have a clear mind to work hard and save all you can. This means that the price negotiations can become eternal and complex. Usually the first offerings are usually always surreal. In the West we are used to price and discount rates depending on purchase volume, etc. Tactics used in China to lower score as little as possible and maximize profit as a bazaar or flea market.
When we receive an exorbitant price we must not lose your temper, unlike there to show them that we know what we speak and try to explore with them how they got to that price. Analyze the product, its components and try to arrive at a reasonable price. Once the price is reasonable, it is best to discuss our need and asking Him openly and directly as it could lower, than other material choices are ... the more we will get further investigation.
No doubt the tactic used by Westerners is the target price, I personally do not like to give a price target of hand. If you give, you have to be very clear that you can be losing money, because sometimes the price is lower given directly than you expect and you have to have this probability. We must also be realistic, Westerners often ask for a price far below target to achieve the best possible price. The result is that as it is impossible not likely receive no response .... From my point of view the best formula to give price targets is compared with its competitors. It goes without saying that if you do not reach the price we bought them, because it shows no loyalty to the manufacturer. The thing to say is "We've been watching" to see what your competition is to study it to see what they can do. They always try to be better and end up giving a good price, not for fear of losing you as a customer, but because they want to show you are the best.
short, we should not try to impose a price, we let them think they are working and contributing to the future of the relationship!
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