Information Sharing

You are: Pierre Constanze, Transport Manager for RSA. You are responsible for deliveries of all RSA’s printers form their factories in Armenia to all other countries in Europe. The most important aspects of these deliveries for you are not speed or cheapness, but carefull handling and efficiency. Toy are going to a meeting with the Managing Director of Haulage International, and you want to find out what he can offer you.

Detail of rsa’s needs

1. You paid Briggs & Co $4000 per 1000 km for transportation (of about 1000 printers). You want to know what Haulage International will charge you.

1. You want to transport about 1,000,000 printers a year with Haulage. Your output for export is about 2,000,000 printers a year. The remaining 1,000,000 printers will be transported by four or five smaller firms.

2. You want to transport printers all over Europe, including Eastern Europe and Russia.

3. It is very important to know that:

   1. the drivers making the deliveries are reliable and punctual

   2. the goods will be handled carefully

   3. Haulage will pay for any breakages.

Instructions:

At your meeting with Lawrence Van der Valk, the Managing Director of Haulage, try to find out all you can about the following:

• prices

• the countries they deliver to

• how much business they can do for you

• whether they can guarantee that the goods will be handled carefully and efficiently, and if they will take responsibility for breakages.

This is not a bargaining session. Your aim is to provide and receive information.

Dialogue

Claude Schmidt, the Managing Director of RSA, is talking to Lawrence Van der Valk, the Managing Director of Haulage International, about the possibility of Haulage to transport RSA’s printers.

CS: Good morning, Mr. Van der Valk. I wonder if I could talk to you about our transport.

LW: Yes, certainly. I suppose you know I’ve been talking to Mr. Constanze?

CS: Yes, yes. Now, could I ask you about your prices?

LW: Our prices are fairly standard for all our deliveries. Our normal charge for lorry transport is $8,000 per 1000 kilometers, and we’ve estimated that we could get about 1.500 of your printers into one of our lorries.

CS: Well, look, I’m rather worried about this question of cost – it seems this would put our transportation costs by one third and I’m afraid that wouldn’t be possible.

LW: Well, we could probably lower the price for you. This would depend on the amount of business, which is… er…

CS: I wonder if I could come in here, , Mr. Van der Valk… What would your lowest price be for, let’s say, one million printers for export?

LW: Well, of course this would depend on the contract, but I would say, for that amount of business… we could probably lower the price by about 10%.

CS: Ten per cent?

LW: Yes.

CS: Ten per cent… so you’d be asking $7,200 per 1000 kilometers…

LW: Yes.

CS: … and that would be for 1,500 printers each time?

LW: Yes.

CS: Hmm… that’s still a little high for us… Would you then be prepared to accept responsibility for breakages?

LW: Our normal costs do not include breakages. The client is always responsible for insurance of goods in transit.

CS: I see… well… no… we really couldn’t accept that. Is there any possibility of a lower price from you?

LW: This might also be possible, but again, of course, it would depend on the amount of business.

CS: I see. Well, perhaps we can still come to an agreement, Mr. Van der Valk. Can I arrange another appointment for you with Pierre Constanze?

LW: Certainly.

CS: Next Tuesday, perhaps?

LW: That would be fine.

CS: Good. Goodbye, then.

LW: Goodbye.

1. Practice the dialogue in pairs.

2. Find an expression in the dialogue that is used for each of the following:

a asking for information

b interrupting

c bargaining

d making an offer

e disagreeing

3. Fill in the missing words. Don’t look at the text.

a I’m rather worried about this ____ of cost.

b This would _____ on the amount of business.

c I would say, for that ______ of business…

d Would you then be prepared to accept _______ for breakages?

e The client is always responsible for insurance of goods in ______.

4. Discussion

Write down three things you have learned about RSA, and three things you have learned about Haulage International. Discuss these points with the class.

5. Problem

What price would Haulage have to offer if RSA’s increase in costs were to be kept down to 10%?

Brief for negotiating

You are: Pierre Constanze. You have just had a meeting with Claude Schmidt, your Managing Director. He is very worried about increased transportation costs that would result if you sign a contract with Haulage. Haulage have offered to lower the price by 10% if they transport 1,000,000 of RSA’s printers a year. Schmidt estimates that this would still mean an increase of 20% in transportation costs. He wants the increased costs to be a maximum of 10%. This means that you have to try to get Haulage’s price down to $6,600 per 1500 printers per 1000 km.

Your wants are basically these:

1. You want Haulage to offer you a maximum price of $6,600.

2. 2 You want Haulage to be responsible for any breakages. That is, they will pay for any printers that are lost, stolen or damaged.

3. You do not want to offer Haulage more business than 1m printers a year. The reason for this is that because Briggs let you down in the past, you do not want to be dependent on just one firm. You feel that this is a bad business practice.

You will have to negotiate on all these points. First, get together with all the other Transport Managers from RSA and decide what your upper and lower limits are. Then meet with the Managing Director of Haulage and try to make a deal.