What are the best negotiation strategies for buyers in emerging markets?

If you are a buyer in the agribusiness sector, you know that emerging markets offer great opportunities for sourcing raw materials, products, and services. However, negotiating with suppliers in these markets can be challenging, as you have to deal with different cultures, regulations, risks, and expectations. How can you prepare and execute effective negotiations that benefit both parties and foster long-term relationships? Here are some strategies that can help you achieve your goals.

1 Know your market

Before you enter any negotiation, you need to research your target market thoroughly. You should understand the political, economic, social, and environmental factors that affect the supply and demand of your desired goods or services. You should also learn about the culture, values, norms, and etiquette of your potential suppliers, as well as their business practices, preferences, and expectations. This will help you avoid misunderstandings, build rapport, and adapt your communication style accordingly.

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Jenilo Macanas

Former Consultant Brookside Farms Group of Companies QA/QC Laboratory & Feedmill
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If you are interested in a product from a certain company that has a product that you need and passes all the criteria including the quality that you need specially if it is a raw material. Ask the company if they can provide you additional information regarding the product and if possible request for a plant visit. In negotiating ask them if they can offer the best price. Also check if they can give the price for a blanket P. O. ( price good for the whole year). And if the product is imported ask them if you can do indent business so in return you can calculate your requirement/consumption of the said raw material for a period of time.

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2 Define your objectives

You should also have a clear idea of what you want to achieve from the negotiation, and what are your priorities, alternatives, and limits. You should set realistic and measurable goals that align with your budget, timeline, and quality standards. You should also anticipate the possible scenarios, challenges, and objections that you might face, and prepare your responses and solutions. Having a well-defined BATNA (best alternative to a negotiated agreement) will help you avoid accepting unfavorable terms or walking away from a good deal.

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Ronald Macali

Marketing Director - Asia Pacific - Famsun Co., Ltd.
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Establishing strong relationships with suppliers is crucial in emerging markets. Take the time to understand the local culture, customs, and business practices. Building trust and rapport with suppliers can lead to better negotiation outcomes. Thoroughly research the local market conditions, including pricing, competitors, and suppliers. Having a good understanding of the market dynamics gives you leverage during negotiations and enables you to make informed decisions. In emerging markets, it's often beneficial to have alternative suppliers or options available. This gives you bargaining power and prevents any single supplier from having too much control. Explore different suppliers, evaluate their offerings, and negotiate.

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3 Build trust and rapport

One of the most important aspects of negotiation in emerging markets is building trust and rapport with your suppliers. You should approach the negotiation as a collaborative process, not a competitive one. You should show respect, empathy, and interest in your suppliers' perspectives, needs, and concerns. You should also demonstrate your credibility, reliability, and commitment to the relationship. You can use small talk, humor, stories, and gestures to create a positive atmosphere and reduce tension.

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4 Be flexible and creative

Negotiation in emerging markets often requires flexibility and creativity, as you may encounter unexpected situations, changes, or demands. You should be ready to adapt your strategy, tactics, and offers to the changing circumstances and opportunities. You should also be open to exploring different options, solutions, and trade-offs that can satisfy both parties' interests and create value. You should avoid rigid positions, ultimatums, or assumptions, and instead focus on the underlying needs, motivations, and goals.

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Assoc. Prof. (Hon) R. Beniadi Setiawan, Ph.D. ST,MM,MMBA(SC),PMP(SC),CPLSC,CPGN,CPP,CPL,CPC.

Procurement, Logistics & Supply Chain Principal Expert & Sr.Practitioner | Associate Professor & PhD in Supply Chain Management | Outstanding Leader in Education Awardee (USA)| Books & Journals Author| IARSI | BPP HIPMI
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Negotiation in emerging markets may involve different norms, rules, and practices than what you are used to in your home country. For example, you may encounter different styles of communication (direct or indirect), negotiation (competitive or cooperative), or decision-making (individual or collective). You may also face different challenges such as language barriers, cultural differences, power imbalances, legal uncertainties, or ethical dilemmas. To adapt to the situation, be flexible and open-minded. Donâ€™t impose your own standards or expectations on your counterpart. Instead, try to understand their logic and rationale behind their behavior and actions. Adjust your style and tactics accordingly. Seek common ground and mutual benefits.

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5 Manage risks and uncertainties

Negotiating in emerging markets can also involve various risks and uncertainties, such as currency fluctuations, political instability, legal disputes, or quality issues. You should assess and mitigate these risks as much as possible, by conducting due diligence, verifying information, securing guarantees, or using escrow services. You should also plan for contingencies, such as alternative suppliers, backup plans, or exit clauses. You should also monitor and evaluate the performance and outcomes of the negotiation, and follow up with feedback and support.

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6 Respect the process

Finally, you should respect the process of negotiation in emerging markets, and understand that it may take longer, involve more parties, or require more formalities than you are used to. You should be patient, persistent, and courteous, and avoid rushing, pressuring, or offending your suppliers. You should also respect the cultural norms and protocols of the negotiation, such as the use of intermediaries, gifts, or ceremonies. You should also confirm and document the agreements, and honor your commitments and obligations.

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7 Hereâ€™s what else to consider

This is a space to share examples, stories, or insights that donâ€™t fit into any of the previous sections. What else would you like to add?

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Directory

What are the best negotiation strategies for buyers in emerging markets?

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1 Know your market

2 Define your objectives

3 Build trust and rapport

4 Be flexible and creative

5 Manage risks and uncertainties

6 Respect the process

7 Hereâ€™s what else to consider

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