Relationship Building

C: -Good morning!
A: - Good morning!
C: -It is a pleasure for us to have you in our country!
A: -Thank you very much for this invitation!
C: -So, corect me if Im wrong: this is your first visit in the Gulf?
A:-That is right. Ive always wanted to come here, but my schedule from work does not allow me to
have so much free time. Honestly, every time I get to come to a country I try to visit as much as I can.
Can you tell me what interesting places to visit are in your country?
C:-Ohbut there are so many! But that will depend of what kind of attractions you like! You can visit the
House of Mirrors, The Grand Mosque, Kuwait Towers, Maritimes Museum and the list will go on if you
want. Also, you can go on our famous Al Kout Beach or if you love shopping youre like in heaven of
shops here! For that, you can visit Souk Mubarakia! Of course, that depens of your spare time and also your
schedule! So, what do you do usually on your free time?
A:- I like to play at the piano, to socialize or to learn new things. Speeking of that, my fields of
interest are cooking, dancing and riding. So, what about you?
C:- I like to travel to places I didnt till now and also cycling. Im very curious..What is the most
extravagant place you travel to?
A:-Thats a difficult question. I think Dubai is the answer. The things that made me think is an
extravagant are, for example: the imposing buildings, their luxury, culture and also every day life.













Agreeing procedure
C: Good thenI think is the time to move on to our business. So, I think both know that the main interest
in this negotiation is to reach an agreement about the distribution of your poultry products in the Gulf area.
Can we now agree on the overall procedure?
A: Yes, indeed. Talking about interests, our main objective is to establish the countries where we will
export our products, and of course the quantities, prices and also the payment methods. Does that fit
into your plans?
C: Yes, that is fine. That is very important for us. And, because we wanted to see what is coming next
meaning if your production capacity can cover the demand- we did a preliminary survey and the results
predicted that in the next 5 years the demand will double. Does that fit into your objectives?
A: Certanly. It is very good for us to know that we will not fell through if we are breaking a new
ground. Of course, price, payment methods and quantities exported ar also very important for us as
we said earlier. We dont whant to behave like a bunch of amateurs and because of that we have to
establish a price that is suitable for this type of market, or to see which is the best method of
delivering because the freight can increase the cost and that will be highlighted into the prices of our
products. Is that ok with you?
C: Yes, I agree. I think that after we dicuss that, we need to talk more details and also about a future joint
venture. Also, I think that both are interested to have a long time collaboration . Does that fits with your
plan?
A: Yes, indeed. We think that a joint venture suits perfectly with our plans. We will make that the X
item to the agenda.
Exchanging infos
C: Lets move one to another subject. Can you give me a backround of your company?
A: Certanly. We are a well known producer of frozenpultry products located in the North of
England, in Carlisle. We started this type of business ten years ago, and firstly we expanded in
France and then in Germany and Italy. We are specialized in the industrial preparation and deep
freezing of chickens, turkeys, ducks and geese. We think that we are smart operators and that is why
we expaned all over the Europe, making more loyal and satisfied clients. Because we are well
established on this continent, we decided in 2013 to look for new and attracting markets, and we
think firstly to the Gulf, because we heard that partenersin this area are very reliable. And because
of that we are now here, at this table. How about your company?
C: Our company was founded in 2009 and we were involved in the cereal distribution sector. Although it
was a profitable activity we decided to break new grownd 2 years ago in the food processing and poultry
farming industry as our market surveys showed a considerable growth in potential for the next 10 years.
The Company is engaged in breading, selling, distributing and importing a range of birds and poultry, and
other related activities, as well as the establishment, operation and management of restaurants, cafes and
food processing centers. We are now the fifth largest distributor in the Gulf with a turnover of 123 mil $.
Our key interest is to grow in this sector and become the second largest distributor in a 2 years
period. At the moment of lesser importance to us is the activity in the cereral industry.

Saudi Arabia
Questioning
A: Can we just move on to the first item on todays agenda? I would like to ask you a few questions
on your sales projections? Is that ok with you?
C: Yes, indeed
A: What are the main markets in which you are operating?
C: The main 3 markets are: Saudi Arabia, Kuwait and Oman. These three markets have experienced a g
There are also: Abu Dhabi, Bahrein, Qatar.
A: What are the sales projections for the first 3 markets?
C: Our market survey shows a number of 5550 units for Saudi Arabia, 2700 units for Kuwait, and 2450
units for Oman. As you can see Saudi Arabia represents more than half of the market taken into
consideration. What we propose is for your company to handle our distribution in all of the markets
mentioned before, especially Saudi Arabia, which is of great importance to us.
Options
A: In the present conditions that would be difficult for us. We would be prepared on the other hand
to agree on that if we discussed a bit the conditions. You see, we cant put our eggs in one basket.
Shall we first list the options and than examine them?
C: That sounds fair to us. What do you suggest?
Bidding
A: One of our objectives is to penetrate the Gulf market, but since we are breaking new ground is a
bit risky for us to handle the distribution throughout all the Gulf. We would be able to distribute the
products only for smaller markets like Abu Dhabi, Bahrein, Qatar. Handling Saudi Arabia wouldnt
be that profitable for us. We can suggest that you subcontracted another distributor to this country.
How does that sound to you?
C: It would be very difficult for us to do this as this will mean negotiating with a lot of other companies.
Also this does not fit with our plan of using a unique distribution system. Maybe a better solution would be
for you to take over the distribution in the 3 main markets (Saudi Arabia, Kuwait and Oman) and we can
find other distributors for the other markets. Would you go along with that?
A: We could go along with that if you agreed for us to handle only Saudi Arabia and Kuwait. That
covers more than half of your market. What do you think?
C: That sounds fair to us.




PRICE
Options/Bidding
C: Can we now move on to the next item on the agenda?
A: Certainly
C: We belive that we should also be discussing the problem of prices. We analyzed your offer and although
it seems a promising one Im afraid it makes it difficult for us to reach an acceptable profit margin. For
example we would be able to buy a larger amount of chickens and turkeys if you lowered the price at 425
pounds/ton for chickens and 550 pound/ton for turkeys.
Bargaining
A: If you increased your order to 7000 tons of chickens and 4000 tons of turkeys, we could offer you a
disccount of 5% each.
C: Thats like water of a ducks back and you know it. We could buy 6300 tons of chickens 3500 tons of
turkeys if you offered a disccount of 15% for chickens and 10 % for turkeys. How does that fit in with your
plans?
A: We will offer you a discount of 12% for chickens and one of 7% for turkeys if you bought 6500
tons of chickens and 3700 tons of turkeys. Is that ok with you?
C: Thats perfect. Lets move on now to duck and geese. We could buy 1000 tons of duck and 800 tons of
geese if you offered us the duck at 570 pounds/ton and the geese at 600 pounds/ton.
A: If you bought 1300 tons of duck and 1200 tons of geese, wed be prepared to offer you 640
pounds/ton for ducks and 660 pounds/ton for geese. How does that sounds?
C: If you agreed for 610 pounds/ton for ducks and 630 pound/ton for geese, we would be able to buy 1100
tons of duck and 1000 tons of geese. How does that fit with your plans?
A: That seem ok to us
C: We might also be able to reduce costs if you took the delivery at Flexistowe (UK port). From there the
products could be transported by a local shipping company: Kuwaiti Shipping lines. How does that sound
to you?
A: We could reduce the costs if you accepted for us to deliver FOB at Flexistowe. The total transport
and insurance cost would amont 9 pounds per ton for any kind of bird. Does that suit you?
C: Yes thats fine.





Airfreight
Questioning
C: And now, can I just ask you a few questions about the way of you will transport the products?
A: Certanily. We think that the better way is to transport the products by airplane. Our products are
very perishable and that is why we must deliver them fast, in special conditions.
C: Can you give me an idea about these special conditions?
A: Yes, indeed. There must be special boxes with waterproof lining and of course, these boxes should
be pluged in to maintain a constant temperature, so our products wont loose their quality and, in the
worst case, alter. Can I just move on, and ask you a question?
C: Yes, indeed!
A: How soon you want us to start delivering the poultry products on your market?
C: As soon as possible. We think that is a great idea that you want to deliver the products by place, because
we want to be on the market as soon as possible, especially in Kuwait, Oman and also Saudi Arabia.
A: Oh! But that is just great!
Options
C: It seems to me that there are a number of ways we could transport the merchandise.
A: Ok. Shall we list the options first and then examine them in more detail one by one?
C: That is great but we think the better way to is to deliver the products by plane, and that is why we dont
want to dicuss very much about other kind of transport. Is that ok with you?
A: Certanly. It is fine.
C: I would like to start by suggesting anpartenership with a local company to transport the merchandise, for
example, Air Kuwait.
A: I think that has a lot of potential. The main strength of anpartenership is that they could offer
discounts and of course, that could be great for the price products, because will not suffer an
increase.
Bidding
A: So, now that we settle this, we can move on and talk about more details about the partenership,
and of course, more important about delivering conditions. Is that ok with you?
C: Certanly. We propose that we should talk more about the partenership for the moment. Is that ok with
you?
A: Yes, indeed. It could be a good idea if you will talk with the airline company and ask them about
an offer.
C: Oh,but we already done that! They offered a price of 137,500 pounds including insurance on a
guaranteed delivery of 1000 tons in two months. Is that ok with you?
A: Yes, of course. We think that, even if this price is a little bit high, will be like water off a ducks
back for the company, and also for the products price.
Bargening
A: But, how you already know, the monthly quantity is bigger then 1000 tons so we will probably
would have to pay extra charges each month.
C: We will take this offer if you agree to share the extra costs with our company.
A: Ok, we will accept the extra charges that provided that we will sign a contract immediately.
C: We will sign the contract immediately we decide the terms of the joint venture.
A: That would be just fine!





















Payment methods
QuestioningC: And now, can I just ask you a question about the payment methods that we will use?
A: Usually, our policy is to use an irrevocable letter of credit payable at sight with our new
customers, because we think is the safest way. What do you think about that?
C: We are not used to letter of credit, we usally use as a payment method a bank draft.
OptionsA: It seems to me that there are a number of methods we could use for payment. I would like
to start by saying that the letter of credit is the better way for both of us.
C: Shall we list the options first and then examine them in more detail one by one?
A: It seems to me that we already discussed about our 2 options. Do you need more details about
that?
C: No, that is just fine. Have you considered the idea of giving up your traditional way of payment and
have a mixture between the 2 options that we discussed?
A: No, we dont. We think that the main strenghts of the letter of credit are the facts that itreduces
the production risk, if the buyer cancels or changes his order, the seller is able to calculate the
payment date for the goods, the buyer demonstrates his solvency and also allows the buyer to avoid
or reduce pre-payment.
BiddingC: Yes, you were right. I know that a letter of credit has a lot of advantages, but we are not sure
about using it, so, alternatively we could talk more about the mixture. Can we agree on that?
A: Ok then. Let me pick your brains.
C: Speeking about the mixture, our proposal would be like that: using the letter of credit, but you grant us
payment terms of 90 to 120 days.
A: 90 to 120 days are a lot of time. We offer to our best clients 30 days maximum. We belive that in
this time our clients will procure the money for the merchandise. Can we agree on that?
C: Given the quantities that are involved we think that 90 to 120 days are good terms. Can we just agree on
that?
Bargening
A: We would go along with this mixture of payment methods you if you did the payment in 60 days.
How does that sound to you?
C: It is still impossible for us to do the payment in 60 because we wont have sufficient cash florw till then.
Our main creditors make their payment in minimum 90 days so we you can see that our money is tied up.
We would be prepared to accept the payment by letter of credit if you offered us a period of 90 days. Is that
ok with you?
A: Yes thats fine with us.

Joint Venture
Questioning
A: Can I just ask you a few questions about the joint venture between our companies?
C: Certanly. What would you like to know?
A: Can you give me an idea of how you see our future company?
C: We envisage a hatchery and production facility with an annual capacity of 17.500 tons, that would come
on stream within 18 months. Does that fit in with your plans?
A: We can do a facility that can produce so much, but we think 18 months is a bit soon.
C: Could I just move on to another question?
A: Yes, indeed.
C: Roughly, how much do you want to invest in this facility?
A: We did all the maths, and we think that it will cost us 1,6 million pounds. We think that it is a big
investment, and for that we dont want to become like a lame duck.
C: It seems to me that there are a number of ways we can split these costs, so both companies could have
advantages. For example, if we dont invest the whole sum, of 1.6 mil pounds, we can expand in other
areas.
Options
A: I think that has got a lot of potential. The main strenght of spliting the money is that we can invest
more in other businesses, to have a bigger profit.
C: Our proposal is that the cost should be shared 50-50 between our companies, so we dont argue which
will be the company who pays more or lesser.
Bidding
A: Oh, but we thought about another scenario. We were prepared to invest 30 percent of our profits
from the first year sales. Is that ok with you?
C: Maybe a better solution would be ours, with 50-50, because would be a fair one.
A: If you accept our offer we would provide to you two managers and 4 top engineers that are worth
360.000 pounds annually.
C: We couldnt accept your offer unless we were allow to have a senior manager too.
A: We would be prepared to provide only a manager provided that you accepted our four engineers
to lead the tehnical operations.
C: By all means. I am very glad we agreed on this matter and I am sure we will be succesful.


Conclusions
C: Can we now just sum up what we have disscused?
A: Certainly
C: Concerning the Saudi Arabia item we have decided that you will handle the distribution of your products
in Saudi Arabia and Kuwait and for the rest of our markets we will negotiate wih other companies or we
will try to handle it ourselves.
A: Yes that is right. Concerning the quantities and prices of your purchase we have reached the next
agreement: 6500 tons of chickens and 3700 tons of turkeys wtih a disccount of 12% for the chickens
price and a disccount of 7% for the turkeys price, 1100 tons of duck for 610 pounds/ton and 1000 of
geese for 630 pounds/ton.
C: Yes thats correct. We also agreed that we will be able to reduce costs if you delivered FOB at
Flexistowe. Let see what we have decided in terms of transportation. We chose to transport the products by
plane. We suggested a potential partnership with a local company and presented their offer. It seemed ok
with you
A: Indeed. Now for the payment methods we suggested the letter of credit as the safest method. You
said you are not familiar with this method and suggested your traditional form of payment, that is a
bank draft. We then agreed to use a mixture between the two of them, with 90 days terms of
payment.
C: Yes, thats right.
A: Another important asspect that we discussed is the possibility of creating a joint venture. We
agreed that we willboth contribue in equal shares to the establishment of a production facility with
an annual capacity of 17.500 tons.
C: Thats correct. Given all the aspects we have discussed I can say that our company is very pleased with
the outcome of this meeting. It has been a pleasure doing business with you.
A: We are also very pleased with the results.