Business|Adults|Advanced|13. A sponsorship deal

pic1_Business|Adv|L13

Comment on the quotes

«Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal — a commitment to excellence — that will enable you to attain the success you seek.»

«Small successes lead to huge rewards. Never give up!»

«Success isn’t about how much money you make, it’s about the difference you make in people’s lives.»

Study the examples in the Useful language section and do the task below

pic6|Business|Pre-Int|L4

Bargaining

  • If you increase your order, we’ll give you a bigger discount.
  • We can deliver by that date, providing we have the goods in stock.
  • If we lowered the price, would you be prepared to increase your order?

Checking understanding

  • Sorry, could you repeat that?
  • Are you saying you don’t have that quantity in stock?
  • So what you’re saying is you’ll …

Signalling

  • I’d like to make a suggestion. I think we should leave this point and come back to it later.
  • I want to ask a question. How are we going to pay for this?


Listen to the conversation and answer the questions

Exporter Buyer

Exporter: If you place an order for only 50 rugs, we can offer you a discount of five percent off list prices. So you’ll be paying just under 2,400 euros for our standard rug. It measures 184 by 320 centimetres.
Buyer: What if we ordered rugs of different sizes?
Exporter: I’m afraid the discount would be less and you’d pay according to the rug’s size.
Buyer: Supposing we increased our order for your standard rugs, what discount would you give us?
Exporter: Well, what sort of quantity do you have in mind?
Buyer: OK, if we ordered 100 rugs, made in Eşme, would you double the discount?
Exporter: No, not double it, but we’d be willing to increase it to seven percent. That’s pretty generous, I’d say.
Buyer: That sounds fairly reasonable. I’d like to ask a question now about delivery. Could you get the rugs to us by the end of this month?
Exporter: Mmm, that’s asking a lot, I honestly don’t know. I’d have to check our stock levels.
Buyer: Are you saying you don’t have that quantity in stock?
Exporter: No, I’m just not sure how many we have in the warehouse at the moment.
Buyer: I’d like to make a proposal. I’d be prepared to place an order for 150 standard rugs if you could give us a discount of 10 percent, and provided you delivered the goods by the end of the month. How about that?
Exporter: Hmm, 150 rugs, made in Eşme? OK, if I’m certain we can supply you that quantity by the end of the month, you’ve got a deal. We’II give you 10 percent off the list price for that amount.
Buyer: Great. When can you confirm the order?
Exporter: I’ll check with our warehouse supervisor this afternoon to find out if we can meet your delivery date. I’m pretty sure we can do that.


1. What agreement do the exporter and buyer reach concerning

a) quantity, and b) discount ?

2. What delivery date does the buyer want? Is she going to get what she wants for sure?

Listen again and complete these sentences


[h 5 p id=»9621″]

Exporter Buyer

Exporter: If you place an order for only 50 rugs, we can offer you a discount of five percent off list prices. So you’ll be paying just under 2,400 euros for our standard rug. It measures 184 by 320 centimetres.
Buyer: What if we ordered rugs of different sizes?
Exporter: I’m afraid the discount would be less and you’d pay according to the rug’s size.
Buyer: Supposing we increased our order for your standard rugs, what discount would you give us?
Exporter: Well, what sort of quantity do you have in mind?
Buyer: OK, if we ordered 100 rugs, made in Eşme, would you double the discount?
Exporter: No, not double it, but we’d be willing to increase it to seven percent. That’s pretty generous, I’d say.
Buyer: That sounds fairly reasonable. I’d like to ask a question now about delivery. Could you get the rugs to us by the end of this month?
Exporter: Mmm, that’s asking a lot, I honestly don’t know. I’d have to check our stock levels.
Buyer: Are you saying you don’t have that quantity in stock?
Exporter: No, I’m just not sure how many we have in the warehouse at the moment.
Buyer: I’d like to make a proposal. I’d be prepared to place an order for 150 standard rugs if you could give us a discount of 10 percent, and provided you delivered the goods by the end of the month. How about that?
Exporter: Hmm, 150 rugs, made in Eşme? OK, if I’m certain we can supply you that quantity by the end of the month, you’ve got a deal. We’II give you 10 percent off the list price for that amount.
Buyer: Great. When can you confirm the order?
Exporter: I’ll check with our warehouse supervisor this afternoon to find out if we can meet your delivery date. I’m pretty sure we can do that.


Find an example of checking understanding and another one of signalling language

pic3|Business|Pre-Int|L4

Role-play the situation

Bargaining

  • If you increase your order, we’ll give you a bigger discount.
  • We can deliver by that date, providing we have the goods in stock.
  • If we lowered the price, would you be prepared to increase your order?

Checking understanding

  • Sorry, could you repeat that?
  • Are you saying you don’t have that quantity in stock?
  • So what you’re saying is you’ll …

Signalling

  • I’d like to make a suggestion. I think we should leave this point and come back to it later.
  • I want to ask a question. How are we going to pay for this?


Role Card

Student

You are the Sales Manager for the Spanish briefcase manufacturer.

You want the retailer to agree to the following:

Delivery time: Four weeks after receiving order (three weeks are affordable)
Place of delivery: The retailer’s main warehouses in Zurich and Geneva
Price: Top-of-the range briefcase: €550 (€520 is affordable)

Medium-priced briefcase: €320 (€300 is affordable)

Colours: Black and brown
Payment: By bank transfer when goods have been dispatched
Discount: 4% for orders over 100
Returns: Medium-priced briefcases (easier to resell)

Teacher

You are the Chief Buyer for the Swiss retailer.

You want the manufacturer to agree to the following:

Delivery time: Two weeks after receiving order
Place of delivery: Individual retail outlets (16 around the country)
Price: Top-of-the range briefcase: €500

Medium-priced briefcase: €270

Colours: Black, brown, maroon, pink
Payment: Two months after delivery
Discount: 10% for orders over 200
Returns: All unsold briefcases returnable up to one year after order


Read the background information, listen and complete the chart

Background Information

Kensington United is one of the great success stories in English football. Today, it is in second place in the Premier Division and has reached the third round of the European Champions League competition. The club regularly attracts over 40,000 spectators at its home matches, and its Italian manager, Marco Conti, is adored by fans. Kensington United is also a commercial success and is very profitable.

What has brought about its success? Firstly, Marco Conti had a clear strategy for the team from the start. He developed young players who had come through the club’s youth training scheme. The team was also strengthened by one or two carefully chosen foreign players.

Current situation

Kensington’s current four-year sponsorship deal with an insurance company is about to finish. Ingrid Tauber, the club’s Commercial Director, is considering a new and better deal with Universal Communications, the powerful media group. It is not only the increased money from sponsorship which appeals to Kensington United, however. Universal Communications’ broad range of business activities would offer many other opportunities to increase revenue.

Universal Communications is interested in Kensington because the club’s success has brought it over four million fans in the UK and 40 million in Asia. Kensington played a friendly match recently in India, which was shown on television. Another friendly match in China attracted a TV audience of over 250 million. The team’s popularity in those countries would help Universal Communications to boost sales of its mobile phones in Asia.

Representatives of Kensington United and Universal Communications are meeting shortly to discuss a possible sponsorship deal.


Presenter Bill

Presenter: Let me ask you about Kensington United now, Bill. Dо you think they can get into the final of the Champions League?
Bill: Frankly, I can’t see it happening. Not with the present team. They lack a real star player who can score goals that win matches.
Presenter: I see. But there are rumours they’re trying to buy the African player, Henry Obogu. He would be a real star, wouldn’t he, if they could get him?
Bill: Well, he’s young, but he was African Player of the Year, so, yes, he could be a huge asset to the team if he signed with them.
Presenter: What about the problem the club’s having with its fans? I believe it’s looking for a new sponsor, maybe Universal Communications. They won’t be very impressed with what happened last week at the stadium.
Bill: Right. The fighting in the crowd was a disgrace, it went on for too long. Some of the fans are hooligans, there’s no other word for it. And those sort of fans are harming the reputation of the club, no doubt about it.
Presenter: It’ll be a problem in any deal they make with Universal Communications, that’s for sure.
Bill: Yeah, but let’s face it, Kensington has a great future if they can buy more players. The club’s making a lot of money, you know.
Presenter: Can you expand on that a bit?
Bill: Ingrid Tauber, their Commercial Director, is a really smart woman. She’s done a lot to exploit the Kensington United brand. The club owns a travel agency that their fans use a lot. Their hospitality facilities are popular with businesspeople. Companies pay a lot of money to entertain clients in the boxes. They have a joint venture with an insurance company, and they run training courses on leadership in their conference centre. Just recently, I’ve heard they want to have a sponsorship deal with Sprint, the football-boot manufacturer. They’ve got a finger in every pie.
Presenter: Very impressive. Ingrid Tauber seems to be a bit of a whizz kid.
Bill: She is. She’s been responsible really for the club’s commercial success. They’ll make even more money soon, because the TV rights will be renegotiated, and Kensington will get a share of the income. And then there’s the sponsorship deal, if they can pull it off.
Presenter: Things look pretty rosy for them, then.
Bill: I’d say so. They’ll be in a strong position to negotiate with Universal Communications. Who knows, in a few years’ time, they could be the new Manchester United.

Read your role-card and prepare for the negotiations

Agenda

Date: 10 May

Time: 10 a.m.

Venue: Conference room, Kensington Football Ground

  1. Total value of the contract
  2. Timing of payments
  3. Advertising
  4. Control of players and club activities
  5. Control of spectators
  6. Official supplier of Kensington football boots
  7. Other commercial opportunities
  8. Fringe benefits for players
  9. Other points

Role Card for the Student

Kensington United negotiating team

There are two other companies interested in sponsoring the club if the negotiation with Universal Communications (UC) fails. However, UC is an international company, with excellent management and a high profile in the business world. You want:

1. A four-year contract

The contract should have a total value of €80m. €40m should be paid within the first year, as you need money to enlarge the stadium’s seating capacity, introduce sophisticated surveillance technology and hire more staff for crowd control.

2. Limited advertising

Advertising of UC at the club ground should be limited. You want the ground to keep its identity and intimate atmosphere. Too much UC advertising could upset the fans.

3. Limited promotion by players

Players’ appearances and promotional activities should be limited to 10 days a year. Too much time doing promotion work affects performance on the field. If the team fails to reach the final of the European Cup though, you could increase players’ availability by five days.

4. Crowd control at home matches

You are working actively with the local police to deal with the problem of hooliganism at home matches.

5. An additional payment

UC should pay an additional €16m towards the cost of buying one or two star players. Marco Conti says this is essential to Kensington’s success in the European Cup.

6. Diversification into other areas

You have contacted baseball clubs in the United States. Two US clubs have agreed to play a competitive match at Kensington’s stadium during the summer. This will greatly enhance Kensington’s image.

7. A deal with a football boot manufacturer

You want to make a deal with Sprint, a football boot manufacturer. Sprint has developed an innovative football boot which gives players greater speed. It has offered Kensington €5 million to sponsor the product.

8. Perks

Try to get as many perks as possible from UC — for example, €20,000 for each goal that a player scores over his individual target of 70 goals. Also, free cars for players, memberships to clubs, etc.

You can offer UC:

a) the advantage of being linked to the most exciting young team in English football;

b) the opportunity to work with one of the best managers in the Premier League;

c) the benefit of working with a brilliant Commercial Director, Ingrid Tauber;

d) the possibility of becoming better known throughout Asia;

e) the use of a hospitality box, with space to seat 10 people.


Universal Communications negotiating team

Your negotiating objectives are listed below. Keep them in mind when you plan your strategy and tactics. You want:

1. A four-year contract worth €50m

In addition to €50m in sponsorship, you could offer Kensington (KU) an additional €20m if the club wins the European Cup. Decide how much you wish to pay each year and when payments will be made. If KU play badly and have to drop down to the next division, the sponsorship deal should be renegotiated.

2. Maximum advertising at the football ground

a) four huge billboards advertising the company at the sides and ends of the ground;

b) the company’s logo on flags at all entrances;

c) the main stand to be renamed «The Universal Communications Stand»;

d) the company’s name on the surface of the pitch (playing area).

3. Approval of Kensington’s new ventures

If KU wants to diversify into other businesses, UC should be consulted. The new ventures must be in keeping with the company’s image.

4. Cancellation of Kensington’s deal with Sprint

You have learned that Kensington plans to make a sponsorship deal with Sprint, a football boot manufacturer. You insist that their players must use the football boots made by a small firm you have just bought.

5. Use of a hospitality box

Two hospitality boxes at the ground should be provided for the exclusive use of UC staff and guests. There should be space for at least 30 people.

6. You can offer KU:

a) a sponsorship package worth €50m;

b) good exposure in China and India because of the group’s strength in those countries;

c) perks, for example:

— a car with the company logo on it for all first-team players;

— free travel to holiday destinations

— cheap loans for apartment/house purchase;

— media training courses for players to improve their presenting and interviewing skills;

— financial help for older players to attend coaching courses or obtain academic qualifications.

d) a financial contribution of €5 million towards the cost of a new player.


Listen to an excerpt from the radio programme Sporting World. How does it affect the result of your negotiation?

Now some hot news for football fans. Kensington United have announced that the brilliant African player, Henry Obogu, will be joining the club for a transfer fee of 20 million euros. Obogu is a superb Player. The club’s President describes him as the next Pelé. However, Obogu is known to be very quick-tempered on the football pitch. This will probably appeal to the club’s fans, but his fiery temperament is likely to give the Head Coach nightmares! The question is: will Obogu provide the winning touch that will enable Kensington United to win the European Champions League Cup? Time will tell.

Listen to the expert and answer the questions

Liz Crede is an organisation development consultant. She believes that the results of any organisation can be improved by building the quality of the relationships within it. Whether they’re person to person, team to team, department to department or organisation to organisation.

Interviewer Liz

Interviewer: Liz, how should each side prepare for this negotiation?
Liz: Well, that’s a really great question because the preparation, that is key to any good negotiation, it’s spending time really preparing two things, not only your own position which obviously is really important, but as important is the position of the other party. Trying to understand what will be important to them, what you think they will want from the negotiation. So, looking at both sides is really important in the preparation. And within that looking for 3 positions … By position I mean what would be the ideal outcome for you, what would be your best possible solution to this deal. And getting clear on what that would look like. Then having a middle position. What would be good, but, you know, a bit less that your ideal, but would be good enough, having that mid position. And then the final position would be the best known as a BATNA, so, it stands for the best alternative to a negotiated agreement. It’s your bottom line, and one that you don’t want to go below, otherwise it won’t be a good deal for yourself. And the advantage of having prepared these three positions, is that it, it gives as a negotiator room for manoeuvre, room for flexibility. And that’s what you need to bring in the negotiation, otherwise it can feel very stuck and fixed and no room for movement which is not a negotiation.
Interviewer: What do all good negotiators have in common?
Liz: Well, in my experience, a couple of things come to mind … The first is good negotiators focus on the real needs of the other party rather than what their stated position might be. So, we talked about positions in the last answer. And it’s about really understanding what’s driving them to that position rather than the position itself. So, for example with the advertising. The Kensington United don’t want to upset the fans with the advertising and that’s why they want to keep it to a minimum. So if you look at not upsetting the fans as the key issue, then there might be very many different ways that the advertising can be done that Universal want, but they can have a lot of advertising but in ways that don’t upset the fans. So, both needs can be met when you really understand the fundamental needs of both parties. The other thing is really being a good listener. So, in a negotiation itself really paying attention to what the other party is saying. And listening with an attitude of «win-win», how can we get what we want, but also how can we help the other party get what they want. And a further point is that good negotiators focus on coinage. Now, what I mean by that is what do I have to give you if I’m negotiating with you that is easy for me to give, or very cheap for me to give, but would be a very high value to you, you’d appreciate it a lot. For example, here in the UK we have an honour system, we offer titles to people. So, very easy to give, very low value, it doesn’t cost us anything to recognise somebody as a sir for example, but has a very high value for the person who is receiving it. So, thinking about what coinage is on offer here would be a great thing to do.
Interviewer: Which areas of the sponsorship deal do you think can benefit both sides?
Liz: Yes, good to focus on that. It’s easy, isn’t it, when you see two sides of a negotiation, that apparently are very different in miles apart and you forget how much common ground there is between the needs of both parties. And it’s clear from this situation that that is the case. You know, the opportunity for business development that Universal Communications will bring Kensington United and the opportunity for broader exposure that the football club will bring the Communications Company is very … overlap a lot, there’s a lot of synergy there. And particularly I think in the areas of advertising they’ll reach agreement, in the areas of their own money, the actual total is not that far apart. They just want to structure it differently. So lots of opportunities for creative solutions there. And also with the new business ventures, Universal Communications just want approval of Kensington United’s activities, they are not saying no to the baseball for example in the US. So, I think there’re a lot of areas there for good flexible exploration of options, and they’ll come up with a good deal.


1. What two things should you prepare for negotiations?

2. What can give you more room for manoeuvre in the negotiations?

3. In what way do the interests and opportunities of Universal Communications and Kensington United overlap?

4. Describe a perfect negotiator according to Liz’s commentary.

Read the text


Master the mix of continuity and change

by Stefan Stern

What makes winning businesses different from the also-rans? Having better products and services helps. Good leadership is essential. But the strongest companies manage something else that is rare. They cope with crisis and big strategic change without drifting off course. How rare is this?

Gerry Johnson, a professor at Lancaster University Management School, and two colleagues from the Rotterdam School of Management, George Yip, the dean, and researcher Manuel Hensmans, have been studying companies that, over a 20-year period, achieved almost uninterrupted success while dealing with big changes. They have interviewed senior executives (past and present) from some of these companies to find out what went on, how decisions were made and what the prevailing atmosphere was like.

«The big danger, even for successful businesses, is strategic drift,» Prof Johnson says. Сompanies start out on the right track but they can all too easily lose their way. When things become critical, existing leadership is kicked out, new leaders come in, and the cycle starts again. But not, in the case of a few exceptional businesses. Tesco, Cadbury and the medical products group Smith & Nephew all dealt with big changes while avoiding disaster.

How? A combination of four characteristics, or traditions as the researchers call them, seems to be crucial. The first is continuity. This involves «the reinvention of the company’s distinctive business model» to fit in with prevailing market conditions.

The second is anticipation. This is where it starts to get tricky. To build in anticipation, «alternative leaders» have to be allowed to start work on the future shape and direction of the company but without undermining the current leadership. At Tesco in the late 1960s and early 1970s, a new generation of managers (including future boss Ian MacLaurin) began transforming the business under the nose of the founder Jack Cohen.

This leads to the third characteristic of a winning business, which the academics call «contestation» or «respectful difference that grows out of conflict». This is vital. Dynamic, growing businesses benefit from the creative tension of civilised disagreement. The Smith & Nephew culture was shaped by argument, Prof Johnson suggests. A witness to Tesco board meetings in the mid-1980s told him that they were argumentative and confrontational «but like a family arguing rather than a group of enemies».

The final characteristic is mobility, meaning a flexible recruitment policy that tries to put the best person in the job, which prevents the growth of a time-serving culture.


Find the nouns that mean the following

Read the follow-up letter to a negotiation and complete it with the words in the box


Read the answer and complete it

pic3|Business|Pre-Int|L15

Listen and complete the sentences

Listen and repeat. Try to sound positive and friendly


1.
— Would you like me to double-check those figures?
— Oh, thanks a lot. That’s very kind of you.

2.
— Could I use the photocopier?
— Yes, sure. Just go ahead.

3.
— Is Arabic your first language, then?
— Yes, it is, actually, although we used to speak French as well.

4.
— It’s a bit stuffy in here, don’t you find?
— It is, isn’t it? Shall we let some fresh air in?

5.
— Would you like us to order a taxi for you?
— Oh, thanks very much. I don’t really fancy walking in this rain!



1. I’m afraid we’re not in a position to extend your credit at the moment.

2. Could you give us a discount?

3. If you pay on delivery, we could process your order in a week.

4. I’m sorry, but we cannot possibly consider lowering our price even further.

5. If you order over 100, we can give you 8% discount.

6. I was wondering whether you could alter the specifications.

  • Warm-up
  • Language of negotiating
  • Negotiation phrases
  • Improve your negotiation
  • Kensington United
  • Negotiating a deal with KU
  • Expert's commentary
  • Reading
  • The follow-up letter
  • Useful responses
  • Speak in a friendly way
  • Master the mix of continuity and change
  • The follow-up letter
  • Useful responses
  • Speak in a friendly way
  1. 1. Business|Adults|Advanced|1. Good communicators
  2. 2. Business|Adults|Advanced|2. E-mail: for and against
  3. 3. Business|Adults|Advanced|3. The price of success
  4. 4. Business|Adults|Advanced|4. Marketing and partnerships
  5. 5. Business|Adults|Advanced|5. Marketing internationally
  6. 6. Business|Adults|Advanced|6. Going global
  7. 7. Business|Adults|Advanced|7. Describing relations
  8. 8. Business|Adults|Advanced|8. How East is meeting West
  9. 9. Business|Adults|Advanced|9. Building customer loyalty
  10. 10. Business|Adults|Advanced|10. Working across cultures
  11. 11. Business|Adults|Advanced|11. What makes people successful
  12. 12. Business|Adults|Advanced|12. The greatest achievements
  13. 13. Business|Adults|Advanced|13. A sponsorship deal
  14. 14. Business|Adults|Advanced|14. Job motivation
  15. 15. Business|Adults|Advanced|15. Job satisfaction
  16. 16. Business|Adults|Advanced|16. Relationships at work
  17. 17. Business|Adults|Advanced|17. Taking risks
  18. 18. Business|Adults|Advanced|18. Insuring trade risk
  19. 19. Business|Adults|Advanced|19. Evaluating risks
  20. 20. Business|Adults|Advanced|20. Working across cultures 2