Negotiations are a part of life, from deciding where to go on holiday with your family to making a multi-million dollar deal in business. We negotiate everyday.
In the modern world, where companies do business in different countries, it is important for you to not only know how to negotiate in English, but also to know the meaning of the vocabulary which is used when doing it.
In this first of two online exercises on business negotiation vocabulary, we will both look at and I will explain the meaning of fundamental/essential vocabulary in English for negotiations. In addition, we will also look at the names of basic negotiation strategies and tactics.
Click here to go to the second part of this 'Essential negotiation vocabulary' exercise
In the following conversation, Sally the sales manager for a large English company advises Geoff a new sales executive what he should do in his first negotiation.
From the context, try to guess what the meaning of the words/phrases in bold are. Then do the quiz at the end to check if you are right.
Geoff:'Hi Sally, you wanted to have a word.'
Sally:'Yes Geoff, take a seat. I know that you are going to enter your first negotiation next week and I just wanted to go over a few things with you. I know it's obvious, but the main purpose of a negotiation is to make a deal with the other company. Remember, anything can happen until you have that signed contract in your hands. So be prepared and do your homework about the company, what they want, what they need and who our competitors are before you start.
Also, be aware that you're representing our company and that both our and your reputation is very important. I don't want you being aggressive and bullying them into signing the contract. It's not good business. Try to persuade them that they are getting the best service from ourselves. In this type of negotiation, we're not looking for one-off deals, we're looking to build up trust and confidence with them and obtain follow on business in the future with them. So don't try to negotiate for a zero-sum game.'
Geoff:'Sorry Sally, but what does zero-sum game mean?'
Sally:'It means that one side wins and the other side loses. It's good for one-off deals but it's the worst thing you can do when you want to build up a relationship. So negotiate for a win-win result, where we both benefit from the deal.
Because we're looking for follow on business from them, our margin on the deal doesn't need to be very high. But do not make a deal where we make a loss. All negotiations are about give and take, they will make a demand for more than we offer and you'll agree to it if they do something in exchange. I have no problem in you doing that. They will certainly ask for a reduction in the price they will pay for the whole project.
When they do, tell them the price is the price. That we can only do it for the price they want to pay if there is a reduction in either the services they'll receive or in the scope or size of the project. Make them aware that there will be a trade-off between the price they are willing to pay and the level of support, service or functionalities we can provide. This is normal when negotiating and it usually ends with each side reaching a compromise, in which both parties are satisfied, although both haven't got their ideal price or service level.'
So just keep me updated on what happens. And if you have any problems, let me know.'
Match the words/phrases in bold from the above text to each of the definitions/descriptions below. Click on the "Check" button at the bottom of the quiz to check your answers.
When the answer is correct, two icons will appear below the answer. The "" icon contains extra information on the word/phrase. In the "" icon, you can listen to the pronunciation of the word/phrase.
Now that you understand the meaning of the words/phrases and when to use them, practise using them by creating your own sentences with them in English. Also click on the "" icon under each correct answer and listen how each is pronounced correctly.
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