Selling Skills and Selling Strategies 97 MRF Tyres Mr Dilip Gangadharan is the Vice P; MRF Tyres, who is negotiating with Mr Chandrapal Singh, the Vice President (Purchase) Limited, the leading car manufacturer in India, for a contract to deliver tyres for the car line called ‘Alt’ in the Indian market. MrChandrapal Singh: My position is that we are not prepared to pay more than 1200 INR per tyre which has to be steel belted, radial with a warranty of 25,000 kilometres. What are you willing to offer? Mr Dillip Gangadharan: We are prepared to deliver such tyres at 1600 INR per tyre, That's the rack bottom we can go. We are barely making any profit at this level, MrChandrapal Singh: Come on, Why are you tying to fool me? Iam in this profession for quite some time. You people have a reputation for sticking it to your customers. I know your costs cannot be more than 600 INR per tyre, We are thinking of placing an order for 250,000 tyres for our new model of ‘Alto’ this year. Let us skip the preliminaries and get straight down to the lowest that you can offer. You should also know that other tyre companies are also trying to do business with usand many of them will come down to our price level by merely looking at the size of the order. Mr Dillip Gangadharan: Our price is 1600 INR, Given the quality of our product, we feel that we don’s pee negotiate with prices. The product can sell a resident (Sales) of of Maruti Udyog Mr Chandrachud Singh: What you mean is that you really want to stick it to your large original equipment manufactures. Even with the volume we are offering you, you seem to be too greedy. If you really want our business, you should try to do business with us. This take ic or leave it attitude is going to backfire for your Mr Dillip Gangadharan: I's OK. The company does not allow any of the salespeople to play with the prices for any customers. Mr Chandrachud Singh: What do you mean by this? With the kind of volume we are offering, you are not ready to come down on prices? Mr Dillip Gangadharan: That's right. My company has gor the best rated steel radial tyre in the industry and we cannot afford to negotiate on price Mr Chandrachud Singh: All right gentleman, you use missing an opportunity here for some big business; if this is the way you do business, then I don’t find a day when you will be able to do business with us, at least as long as Iam there in this company. Questions |. Isthisa good illustration of how negotiations should take place? What kind of bargaining tactics are used by both the parties in this case? 2. What should Mr Dillip Gangadharan have done to close the sale? Suggest a negotiat him.by the Government of fy under the Companies the company was to be- for the promotion and employment to more ndloom sector is the largest only to agriculture in India. d across all parts ofthe country village clusters—a legacy from the tion. The handloom weaving acti- village cluster to village cluster in terms used for weaving, the preloom and es that are carried out, etc. Most of m weavers have passed on their weaving generations and thus have kept up a ithe presence of the power loom sector along advantages, the handloom sector has been thstand the competition. It has also proved ity on certain fronts. Wave of ethnic Amand effective stateintervention through finan sistance and implementation of various develop Schemes have brought about more than ten-fold in the production of handloom fabrics. Sector contributes nearly 23 per cent of the al cloth produced in the country. During the year 97, 2 total production of 7,235 million sq tes of cloth was achieved. The handloom sector ‘exists in the form of cooperatives of weavers FWho produce cloth from the yarn supplied to them by ‘ama 7 th competative. The cooperatives them buy back he sloth rom the weavers and take the responsibly makeing it, The weavers are mostly paid wages ggg piece ate hasis where arate is fixed for a specific ‘of doth produced. One of the major problems thar has | Development Corporation constantly plagued the handloom ctor the pereni lack of availability of good quality yarn in the fi 4 atthe right time. Typically, the yarn ued for handlooms is of diffrent quality types. The quay of textiles produced is directly linked to the qual of nui yarn used. Abo, certain products requite certain speci varieties of yarn, Ys in produced in mills which ae scattered across the length and breadth of the coun. try. Usually, handlooms have a seasonal variation in demand and hence the demand for yarn also vate seasonally, Thus. typically the producers and buyers of yarn ae seattered, the seaonalty of demand, unpredictability of the marker, and the different vatie ties of yarn only compound the discrepancies in the production and consumption proces. Handloom cooperatives are among the major buyers of yarn. Private entrepreneurs as well as marginal wea vers, who are not members of cooperative societies, are the other major buyers of yarn. Since cooperatives typically buy yarn in bulk, they expect to get good discounts from the producers he Intervention by NHDC in the Yarn Market the NHDC through its network of offices collects orders trom the buyers and matches them with the production schedule of the weaving mills. Once the NHDO identifies the spinning mill which can supply he requisite quantities of yarn, at a preferred price both the buyer and the mill are notified, and further tr ton takes place between the mill and the buyer. tof the state governments have vernment depart ments to promote the han ctor. These depart mentsalso playa part in the transactions wherever small vopetatives are not ina position to directly purchase 1 sullicient quantities, The NHDC is perfectly equipped to perform this junction since its already in constant touch with both he producers and the buvers. It has a repository of‘transportation incur in transporting yarn. The eligi agencies basically encompass dine are produce handloom or state government bodies involved inhandloom development. According to this scheme, ll eligible agencies can place their indent with the NHDC indicating type and quantity of yarn, prefered mil, tc. Alter the receipt of these indents, the NHDC will verify the availabilty of the yarn from prefered source and convey terms and conditions to the agency. Upon confirmation of financial arrangement by the agency, the NHDC will inform spinning mills to send the yarn by their transporters to the agency. Upon receipe of yam, the agency will pay the transportation cost t0 the transporter and thereafter claim for reimbursement {0 the transportation chatges from the NHDC by producing the relevant documents ek of buyers and offices and 15 Sure: www appatel.indiamart.com ‘Questions 1. Is the NHDC a distribution channel for your answer rt in channelizing the Government by SE PMA > Analyse the activities of cs implemented by the ple is the mill-gate price ed forallowing the weavers wo transportation costs. The ludeficightreimbursement, and mobile van running Sive reasons VHDC in terms of the basic discrepancies between the production and the consumption function. . What isthe value addition that the NHDC provides to the weaversand producers? In coordinating a scheme such as the mill the NHDC reinforce its value addition in terms of its main activities? scheme, how doe do certain agencies deemed tobe ie REFERENCES: |, Dynamic Marketing Behavior A Fun. in Proceedings of the American Marketing Asocuation af Marketing, Richard D. Irwin, Educators conference, Ametican Marketing, Association lines. Chi ‘Freidman, J. 1994, ‘Middlemen as Guaran- Pict, L.F., Berthon, P. and Berthon J.P. 1999, ‘Changing hhannels: the impact of the Internet on Distribution Siratgy’, Busines 422), pp. 19 )Rationalising drug distribution in India’, Rubinstein, A. and Wolinsky, A. 1987, “Middlemen’, Quar > terly Journal of conomio, 102, pp. 581-94 Stand, Sirgy 1985, Applications of Gen- Stern Louis W. and Adel 1. El-Ansary 1992, Mark ‘Theory Concepts to Marketing Channels hannek, Fourth Edition, Prentice Hall Intemational Editions,to enter the low- low-end segment is the Colgate is the biggest TTT Anchor Switches phyer. Anchor diversified into the low-end toothpaste segment to expand its business base and reduce is dependence on the electrical switches business. The low-end of the toothpaste market was growing rapidly as many firms, such as Hindustan Unilever Limited, Procter and Gamble, and Colgate Palmolive, had entered. this segmenc in a big way, Anchor, as aa quipment company, already enjoved a deep electricagets of the parent tle retraining after their is is a situation simi- firms that cannot training, Anchor's the inconsistent ‘company and had Taunch in mind, it may of the earlier company a plan to go sequentially from one Fy to the other so that by end of five ja marker coverage comparable to the urs in the business. ndrajit Singh (CS) was hired as the sales de- ‘officer in charge of sales training at Anchor. b was to examine the existing abilities of the ple and prepare a training plan for the new re He had to suggest a refresher programme for the existing salespersons too. The reputation of Anchor had always been associated with the best quality of product and the best possible customer service in the switchgear division. The company now wanted co translate this reputation into sales through a strong Training the Sales Force 363 and effective sles force inthe toothpaste marke. Bie Randate was to make the tothpane le as efficient and commited as the salespeop electrical equipment division. ie CS had begun a taining need assessment of the sales force of the newly acquired company and had decided to meet the salespeople in a group of six to seven people at different market locations. His initial meetings with a few groups made him believe that the BBS people were very exchusiantic abour the new fl and company. However, he was disappointed with a few salespersons who felt that they were unnecessarily brought back from the field as their job was to sell and not to talk about the training. He was unable to schedule a meeting with these people. CS needed to finalize the training programme of scleipenple fram bath the’acquited company and the new recruits of the Anchor Toothpaste Division. The Board of Directors of Anchor expected a recommend- ation from CSzbour the training process soon ta enable them to take a decision about the training schedule: Questions |. What training issues must CS include in his pro: posal? ‘What kind of suggestion should CS offer to the sales- people of the Anchor Toothpaste Division? Should it be different from that of the new recruits? Were the groups of salespeople who were not attending the repeat meetings making a mistake by staying away? What is your opinion on this? Why were they behaving in this way and what action should be taken against chem? Ifyou had been in CS's place, what training content would you have recommended to the board of directors and why?