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SilkSellingBackgroundBythemiddleof1980s,HongKong'ssilkmarketwasmainlytakenbyJapan,SouthKorea,TaiwanandHongKongproducts.Silkproductsmanufacturedinthemainlandwerereducedfrom90%to10%.Toalterthesituation,thedirectorofShaoxingSilkPlant,FanShizhou,decidedtoopennewmarkets.Afterverycarefulmarketssurveyonprices,customers'demandandinquiry,hisplantstartedproducingsilkwithprintedpatternsinsmallquantityforeachkindandrichvariety.Theproductpatternsaredesignedtocatertodifferentculture,customsandtastes.NegotiationOnacooldayofautumn,anAmericansaleswoman,EdwardNicolar,cameintoShaoxingSilkPlantandFanShizhoureceivedher.Afterlookingcarefullyatthesamplesexhibited,sheshowedalookofsatisfaction.Thensuddenly,sheturnedtoFanandsaidshewantedtoorder7patternsatthepriceof$3.8peryard.However,FandidnotanswerherdirectlybutmentionedthepricesofthesimilarproductsinItaly,France,AmericaandEurope,andthenhegavehiscounterofferof$5.36peryard.Atthissheshoutedandsaid$5.36wasHongKong'sretailprice.Herbosswouldgetcrossedatherifsheorderedsilkatsuchhighprice.FanrepliedconfidentlythatthepricewasHongKong'sretailprice,however,therewasnosuchkindofproductsatthemarket,besides,thepricewasnotatallhighbecauseitcosthim$5forbuyingplainsilkand$0.36forprinting.IftheproductsweresoldatEuropeanmarket,thepricecouldreachashighas$30.Fanfurtheremphasizedthatsinceitwasthefirsttimetheydidbusinesswitheachother,hehopedtoestablishgoodrelationshipfirst,soheactuallyofferedherafavorableprice.Nicolarcouldnotkeepcalmanylonger.Sheoffered$4,$4.2,$4.3andfinally$4.6.Fandidnotsaynonoryes.HesimplysaidthattherewasasayinginChinese:“Friendshipexistsdespiteoffailureinbusiness”.Nicolarsaidnomoreandsteppedontohercarandleft.RequirementsfortheSimulationStudentsaregroupedasinstructedbytheteacher.Halfofthegroupmembersaresellers(FanShizhou)andtheotherhalfarebuyers(Nicolar).ContinuethenegotiationbetweenFanandNicolarfromwhereitstopped.Thestudentsineachsubgroup(thesellersorthebuyers)shallfirstwithinthemselvesdiscussandagreeonthefollowing,andthenproceedtocontinueyournegotiationwiththeothersubgroup.1.IsthereanyproblemwithMr.Fan’sjustificationofhisoffer?2.DoyouthinkFanorNicolarhasemployedthecorrecttacticsintheirfirstroundofnegotiationwitheachother?3.Whatwouldyoudotomakeyourselfadvantageousor,atleast,wellpreparedforanypossiblenegotiationinthissituation?4.Whatinformationcanyoumakeuseof?Whatgoals,strategy,tactics,askingprice,bottomlines,etc.,wouldyouhave?5.Howwillyoucontinuethenegotiation?6.Whatwillbeyourfinalofferforthedeal?7.Willyoulinkanyconditionswithyourfinaloffer?