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Silk Selling
Background
By the middle of 1980s, Hong Kongs silk market was mainly taken by Japan, South Korea,
Taiwan and Hong Kong products. Silk products manufactured in the mainland were reduced from
90% to 10%. To alter the situation, the director of Shaoxing Silk Plant, Fan Shizhou, decided to
open new markets. After very careful markets survey on prices, customers demand and inquiry,
his plant started producing silk with printed patterns in small quantity for each kind and rich
variety. The product patterns are designed to cater to different culture, customs and tastes.
Negotiation
On a cool day of autumn, an American saleswoman, Edward Nicolar, came into Shaoxing
Silk Plant and Fan Shizhou received her. After looking carefully at the samples exhibited, she
showed a look of satisfaction. Then suddenly, she turned to Fan and said she wanted to order 7
patterns at the price of $3.8 per yard. However, Fan did not answer her directly but mentioned the
prices of the similar products in Italy, France, America and Europe, and then he gave his
counteroffer of $5.36 per yard.
At this she shouted and said $5.36 was Hong Kongs retail price. Her boss would get
crossed at her if she ordered silk at such high price. Fan replied confidently that the price was
Hong Kongs retail price, however, there was no such kind of products at the market, besides, the
price was not at all high because it cost him $5 for buying plain silk and $0.36 for printing. If the
products were sold at European market, the price could reach as high as $30. Fan further
emphasized that since it was the first time they did business with each other, he hoped to establish
good relationship first, so he actually offered
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