Preparation of the negotiation based on the implementation of a famous Belgian brand in Turkey.

1. International sales management
Turkey (Istanbul)
Class 3XA1 19th August 2011
DIARRA Mamadou
EPHEC 2010-2011

2. TABLE OF CONTENTS
INTRODUCTION .................................................................................................................................................. 1
SALES FORCES MANAGEMENT ........................................................................................................................ 2
1. HUMAN RESOURCES MANAGEMENT: ........................................................................................................... 2
2. SELLERS PROFILE: ......................................................................................................................................... 3
a) Image of the sellers: .......................................................................................................................................... 3
b) The seller kit: .................................................................................................................................................... 3
c) Prior research for the missionary (Belgian staff): ........................................................................................... 3
d) Trip organization: ............................................................................................................................................ 4
e) Operating costs: ................................................................................................................................................ 4
f) Prospection activities ........................................................................................................................................ 5
MANAGEMENT OF THE RELATIONSHIP WITH THE PARTNER ............................................................. 6
1. HOW TO CHOOSE AND CONQUEST THE PARTNER? ...................................................................................... 6
2. HOW TO MANAGE THE LOCAL PARTNER? .................................................................................................... 7
• Elaborate commercial objectives with the Turkish partner. .................................................................. 7
• Establish a relation based upon trust. .................................................................................................... 7
• Manage the Turkish partner on the long-term. ..................................................................................... 7
3. ORGANIZATION ........................................................................................................................................... 7
4. DECISIONS ALLOCATION ............................................................................................................................. 8
4.1. Short term ........................................................................................................................................... 8
4.2. Long term ........................................................................................................................................... 8
INTERNATIONAL NEGOTIATION .................................................................................................................. 9
1. NEGOTIATION PRACTICES ........................................................................................................................... 9
1.1. A full presentation .............................................................................................................................. 9
a) Identify well the market ................................................................................................................................... 9
b) Provision of equipment and office machines ................................................................................................. 9
1.2. Negotiate with Turks: ......................................................................................................................... 9
a) Common ground choice .................................................................................................................................. 9
b) Listen more, talk less ...................................................................................................................................... 10
c) The main rules of the game ............................................................................................................................ 10
d) Negotiation tempo ......................................................................................................................................... 10
e) Some tips: ........................................................................................................................................................ 10
2. CULTURAL ASPECT: BUSINESS CULTURE .................................................................................................... 10
2.1. Appointment .................................................................................................................................... 11
3. MAKING A DEAL: ....................................................................................................................................... 11
3.1. Sales contract in Turkish law ........................................................................................................... 12
3.2. Commercial contract with the partner (joint venture) .................................................................... 13
4. SALES ARGUMENTS .................................................................................................................................... 14
4.1. Selling Point...................................................................................................................................... 14
4.2. Price .................................................................................................................................................. 14
4.3. Merchandising (find some pictures in appendix) ............................................................................ 14
4.4. Selling method .................................................................................................................................. 14
4.5. Local store manager ......................................................................................................................... 16
5. PREPARATION OF THE NEGOTIATION ........................................................................................................ 17
6. CONTRIBUTION POINT .............................................................................................................................. 18
CONCLUSION ..................................................................................................................................................... 20
BIBLIOGRAPHY .................................................................................................................................................. 21
APPENDIXES ....................................................................................................................................................... 22

3. Executive summary
Problematic
We analyzed the Turkish negotiation skills in order to make a future negotiation about the
establishment of a luxury ready to wear clothing shop in Istanbul. The objective is
afterwards to lead negotiations in a foreign language, put into practice a CRM tool,
evaluate the profitability, optimize the client portfolio, organize and manage the sales
capacity. And finally, elaborate and build sales argumentative, approach the client and
negotiate, conclude and ensure the orders.
Objectives
- Measuring the operation risks of a sale or an implantation at the
international level.
- Evaluating the environment and the functioning of exportation markets.
- Defining all communication techniques and establish a communication
plan.
- Using adequately the Internet tools.
- Knowing the tools in order to put them correctly into practice in a
framework of negotiation project for the export.
Methodology
The first part concerns the sales force management. It includes the sellers profile and
image, the organization, local representation, journey costs, functioning budget and
representation fees, formation, sellers’ memory help, seller’s remunerations, organization
of prospecting journeys, sellers’ evaluation, and useful information for sellers,
administrative formalities, organization and management of time, adaptation of the
expatriate to local context.
The second part affects the management of clients’ relations. It encloses the clients profile,
clients’ risks, and conception of the suppliers-clients relation.
The third part concerns the international negotiations. It includes negotiation practices,
relevant cultural information, contact organization, sale recommendation, contract
conclusion modes, the adaptation of the typical contract to country’s realities taking into
account the negotiation results.
Results
The gathered information will allow us to lead the coming negotiation for a potential
implantation of the luxuryready to wear shop in Turkey. They made us able to establish
different advices for the future negotiation.

4. Introduction
An emerging market always seems a great opportunity for investors. Turkey, and more
particularly Istanbul, is a dynamic place with a high economic growth.
As Belgian businessman, studying the business environment is the first step. Now that we
saw the potential of the market throughout an emerging market analyzes (Volet A), we can
go further in our work and study the negotiation environment.
Therefore, different points will be tackled, first of all the management of the sell force, the
management of the relationship with the future partner and finally the negotiation. And
those, under different aspects: cultural, legal, theoretical and practical.
Finally, we have devoted a chapter to the preparation of the negotiation.
In a word, trough this work you will discover how we consider concretely the
implementation of our luxury ready to wear shop “Belgian Fashion” in Turkey.
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5. Sales forces management
1. Human resources management:
In Turkey, foreign companies can hire and fire freely Turkish employees.
BelgianFashion should only hire local employees. On one hand, an expatriate with the
same language and a common working vision can be helpful to run the shop but Turkish
law obliges companies to hire 5 local employees for one expatriate. On the other hand, the
local employee can provide a deep and useful knowledge about the market and culture.
Moreover the administration procedures are more complicated for an expatriate than a
local employee.
Expatriate Local employee
ADVANTAGES: ADVANTAGES:
- Same language and same business vision - Same language and culture of the
than the investor customers
- Turkey has one of the cheapest labor force
DISADVANTAGES: in the world
- Recruitment costs are higher
- Lack of culture knowledge DISADVANTAGES:
- Obligation to hire 5 local employees for - Their unwillingness to decision making
1 expat from Belgium. can disturb the development of the project
Advice:It is more attractive to hire local staff, but also important to have at least one
expatriate in the team to keep the Belgian aspect of the products.In our case the expatriate
(missionary) will give a temporary tutorial(4 weeks max) and will stay under “Belgian work
legislation” during his sojourn.
To limit the costs of recruitment, it is possible to recruit foreign staff in association with a
local partner who speaks the language and know what Turkish customer are expecting.
In general, the salary is distributed on a monthly basis but it can also be on a weekly basis.
Foreign companies can fix freely the salary but they have to respect some thresholds.
Belgian Fashion has to take into account the minimum level of wages fixed by the local
administration.The minimum wage is US $435/month.Actually, in the retailing and
household goods sector, the average labor cost per employee is TRY 2,077 representing US
$1,168 or € 820.
To motive their employees, the foreign companies give frequently some incentives namely:
‐ Christmas bonuses
‐ Performance’s incentives over the year
‐ Fringe benefits
‐ Stocks options
Opening hours: Shops in Istanbul usually open at 09 A.M. For the closing hour, it depends
on the activity. We should close the shop at 7P.M. Belgian Fashion could close on Friday
instead of Sunday because Friday is the official holiday in Muslim countries.
2

6. 2. Sellers profile:
The company « Belgian Fashion» needs 2 of 3 sellers (including one manager) for the
establishment, and they have to meet some requirements:
‐ Bilingual (Turkish – English B2 level)
‐ At least 6 months experience in ready to wear sector
‐ Good commercial approach (ability to advice customers)
‐ Good communication skills (careful about customer’s needs)
‐ Good appearance
‐ Good knowledge of the products
a) Image of the sellers:
Belgian Fashion’s sellers should wear uniforms provided by the store, in order to be easily
identified by the customers. Shoes are not provided by the shop, but sellers should wear
appropriate and comfortable shoes.
They should be welcoming with the customers and able to give good advices, building
long-term relationships with clients.
b) The seller kit:1
Intellectual requirements
A good knowledge of the culture and the history is always very important when dealing
with people in order to know the value and to have an appropriate behavior. Sellers have to
be trustworthy, respectful and loyal with everyone.
Practical actions and documents
In addition to a fixe phone in the shop and a computer with EDI system, the manager of
the shop should have business card and catalogues in English and in Turkish.
c) Prior research for the missionary (Belgian staff):
Our Belgian staff won’t have a statute of expatriate but he will work during 4 weeks like
when he is in business travel.
Going in a foreign country, a businessman should do some prior research about the general
environment of the country.
Security on the road
You should be careful on the road because weak road-user are systematically ignored.
Pedestrian crossings do not guarantee protection. Cars turning right keep on moving even
if the traffic lights are red.
Infrastructure for health care
In big cities, the quality of the health care system is satisfactory. You can even find people
speaking English in certain hospitals. Outside cities, access to medical care is very difficult.
1
http://www.diplomatie.be/fr/travel/countrydetail.asp?COUNTRYID=58
3

7. Drinking water risk and food
Do not drinktap water, drink mineral water.
Vaccinations
No obligatory vaccination is required before going to Turkey. Generally, shots against
tetanus, diphtheria and hepatitis are recommended when traveling in a country with
uncertain sanitary conditions. In any case, consult reference website such as the World
Health Organization before the departure.
Payment
Credit cards are accepted in most international hotels and shopping centers. To get some
cash, there are lots of ATM accepting the most common card types.
Travel insurance
Before leaving, check if you are covered with your regular insurance. An adapted insurance
is needed for stays longer than 3 months and a full coverage of the risks is required.
Cell phone and communication
The supply for local Sim-Card is various and wide. The quality of the network is generally
good in urban areas. Roaming is possible in Turkey but stays very expensive.
d) Trip organization:
Trip budget:
To begin, we can consider that 1 person of our company will go to help with the settlement
of the shop and teach the sellers. Therefore, here is an insight of the costs they will
encounter.
Activities Costs (USD)
1 return ticketBrussels-Istanbul (03/10/2011- $215
29/11/2011)
Hotel 4 Weeks $1,745
Food $450
Taxi $ 0.7015/Km $850
Communication Fees $285
Catalogue + specifications + Business card Translation $644
Mailing $57
Total $ 4,246 or €2,972.20
e) Operating costs:
Working budget:
4

8. ‐ Localization: 70 square meter shop in the luxury shopping mall Kanyon in Istanbul.
Kanyon in Istanbul offering 400,000 square-feet of retail space, 26 tower floors of offices,
179 luxury residences and luxury hotels all around the shopping mall.
We suggest Istanbul as the best district because of its huge population of upper and middle
class populations. It is also a place where people are really westernized with a particular
taste for fashion. The cost for the monthly rent is $190/sq meter2.
f) Prospection activities
o Commercial fair:
The “Fashion week3” event takes place in Istanbul, following the idea of the Ministry of
Foreign Affairs of Turkey. Indeed, it is an opportunity to gather and to show the Turkish
main designers and “prêt-à-porter” brands to the different international media and foreign
investors.
At the beginning, Belgian Fashion has to increase the popularity of the brand Essentiel and
product visibility via exhibition and of course sponsors and media partners can reinforce
the strength of Belgian Fashion.
o Contact:
Contacts are another way to increase the popularity of the brand and to get reliable contact
in business relationship. The company should get in touch with potentials clients in textile
sector and therefore, the Turkish partner can be very useful.
o Targeting:
Prospectors should target people living especially in Istanbul by distributing catalogues in
strategic areas.
Indeed, there are a lot of uppers class foreigners and expatriates working in Istanbul who
are the perfect target for the Belgian Fashion.
2
http://www.kanyon.com.tr/#/en/shopping-1/fashion__clothing-40/
3
http://www.ifw2010.com/en.html
5

9. Management of the Relationship with the partner
Turkey has a really different culture than Belgium. Relations with administrations are
complicated and there are lots of ongoing laws for foreign investors. That is the reason why
a local partner is essential. But the questions are to know, how to choose it? What are the
risks? How to build a relationship based upon trust?
1. How to choose and conquest the partner?
There are two different kinds of partners:4
1. The investor partner: he participation in the project is concentrated on the capital
provision.
2. The active partner: he is involved in the organization of the create company.
Limiting our partner to afinancial investment would be too risky, because we don’t have
enough experience to manage a company on an unknown market.
Therefore, we will choose the second option: The active partner, who will be a precious
help to adapt our business to the local market.
The investor has to pay attention to the indispensable qualities of the partner. First he must
be bilingual (English-Turkish) and obtains a degree in business, management or
international trade.
Then, he must have experience and a strategic position in the textile sector. He also needs
to have good reputation (it is possible to check if the company is legally registered and if it
practices its activity under a brand name) and, as the investor has to contact local
administrations, his partner should have good relationships with the government body.
The partner is the best insurance for the investor, only if he owns the necessary knowledge
concerning the different steps to enter in the country. Thereby, he will help us to answer
some questions:
What are the needed documents?
− The partner knows which documents are needed and can get them faster than the
normal procedure.
To whom get the authorizations?
− The partner helps the investor to build links with the administration.
How to write a good contract?
See chapter “International negotiation” part “Contract conclusion: law”
How to cope with corruption?
4
www.igeme.gov.tr/english/ allaboutturkey/pdf
6

10. − Corruption is unavoidable in Turkey. The partner will advise the investor whom to
pay bribery and how to avoid being abused.
What are the specificities of the local market?
− In Turkey, there are lots of different bills and a foreigner could easily make mistakes
between them. The partner can also provide a qualified labor force to the investor.
Moreover, the partner has a better value of the local money.
What are the specificities of the Turkish culture?
− See chapter “International negotiation” part “Cultural aspect: Business Culture”.
2. How to manage the local partner?
Elaborate commercial objectives with the Turkish partner.
Indeed, the investor and its local partner must be on the same wavelength concerning the
management of the project. For instance: market shares, turnover etc.… Those objectives
will be clearly defined with him during the negotiation.
Establish a relation based upon trust.
Manage the Turkish partner on the long-term.
A local partner without any follow-up wouldn’t be useful. Moreover, a total trust would be
a huge mistake. That is the reason why a local mystery shopper appears as a relevant
solution. The mystery shopper will receive precise instruction from the headquarters in
Belgium. They will have access to an online questionnaire every semester, like this way we
could evaluate seller’s services to clients.
It will be one periodical anonymous person chosen from a Turkish interim agency.
3. Organization
Sales staff composed of 3 people, including 1 manager, 1 assistant manager and 1 seller.
The manager:
He is responsible for day-to-day running (sales, accounting, stock watch, employee’s
schedule, and sellers’ training) and put into practice strategic decisions concerning the
shop. He should regularly help and gives advices to the sellers. He should give periodical
feedback to the Turkish partner.
The assistant manager:
He will be responsible for the shop when the manager is absent for different reasons.
The sellers: Their main objective is to deliver high quality services to the customers.
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11. 4. Decisions allocation
4.1. Short term
There will not be an expatriate, but Belgian Fashion will send someone in Istanbul during 4
weeks in order to tutor the sellers and the manager Belgian Fashion’s policy and vision.
4.2. Long term
For a joint venture, it’s better to put in place a strong Turkish direction. Indeed, Turkish
partner and Belgian staff have different visions of the economic fundamentals.
Therefore, Turkish managers have a much better understanding of what is worth in
comparison with Belgian staff and are a key to success in financial transactions when
buying or selling products or services in Turkey.
The CEO will be the Turk who plays the role of ambassador of the joint venture. This is
much more efficient when things have to be done locally.
The risks are:
• Being manipulated by the better-informed Turkish partner.
• Corruption in favor of the partner.
• Bad communication.
Advice: To prevent and minimize those risks, a Belgian member has to travel at least each 3
months in order to control the running of the business.
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12. International negotiation
1. Negotiation practices
If you are going to Turkey to do business, know two things.
1 - Your success is defined by your ability to build effective personal relationships
combined with a clearly outlined and well-presented proposal. Turks are primarily oral and
visual communicators so in addition to written statistics, projections and the like to present
information vocally or with maps, graphs and charts.
2- If you are doing business in Turkey involves negotiating, it may not always be necessary
to focus on financial benefits. It is just as useful to point to areas such as power, influence,
honor, respect and other non-monetary incentives.
In additional, Turks enjoy food and the meal is a time for relaxing and engaging in some
good conversation. The protocol of Turkish hospitality dictates that the host always pays
for the meal. The concept of sharing a bill is unfamiliar. You may try and offer to pay,
which may be seen as polite, but you would never be allowed to do so. The best policy is to
graciously thank the host, and then a few days later invite them to dinner at a restaurant of
your choice. It may be a good idea to inform the restaurant manager that under no
circumstances are they to accept payment from your guests.
1.1. A full presentation
a) Identify well the market
Turkey has 76 millions of inhabitants but they aren’t all consumers. Only one minority of
Turks (average 10% of the population) can be considered as realistic consumers. It means
that they can save money and spend the rest choosing the products they consume
according to quality, brand and tastes.
Turkey is a country but they are several markets. Actually they are strong geographic
inequalities, but the little consumer’s proportion can be hard concentrated in some regions
or cities.
b) Provision of equipment and office machines
Even in Istanbul, you can be sure that the hardware and office equipment will be accessible
and of good quality.
Advice: It's better to make sufficient photocopies of all documents. If you need audio or video
equipment, it is safer to bring your own.
1.2. Negotiate with Turks:
a) Common ground choice
Turks seek doing business with people they like, trust, feel comfortable with and with those
that can provide a long-term relationship. As well as looking to the person, Turks are also
astute business people. Ensure your proposal clearly, demonstrates the mutual benefit and
profitability of any agreement or partnership.
9

13. b) Listen more, talk less
"A word is worth a thousand pieces of gold", so the prudence of your words is more
important than how fast you respond. In addition to that, listen carefully is considered as a
real quality.
c) The main rules of the game
Personal contact and trust relationship are the essential basis for success with Turks.
Words have the same value than a contract.
During the negotiation, each party must make compromises. The price is always
negotiated in Turkey.
Different points should be fairly negotiated; the negotiation should result in a win-win
situation.
d) Negotiation tempo
Prior doing business or entering negotiations with Turks, you should know your target
figure and work slowly towards it through meaningful concessions. When conceding,
ensure you present this as a favor and a decision made out of respect and liking for your
counterpart(s). Try and concede only once you have gained agreement on a reciprocal
concession on a separate or related issue.
Do not use deadlines or pressure tactics as the Turks will use this to their advantage and
reverse the tactic by threatening to cancel agreements or end negotiations; so be patient.
e) Some tips:
o Remain honest, professional, nice and modest during the negotiation and even after
o Be patient and calm
o Avoid saying directly “No” but “we are going to think about it”.
o What is unspoken reflects the Turks way of communication, which is ambiguous,
indirect and related to context.
o Made presentations of quality. Do not discuss about technical details before getting
a real agreement.
o Consider negotiations and business with Turkey in a long-term
2. Cultural aspect: Business culture
When meeting, shake hands firmly. When departing, it is not always customary to shake
hands although it is practiced occasionally.
In the business context most women will shake hands with men. However, this may not be
the case in Eastern or rural Turkey where people are more conservative. If you are not sure,
wait for the woman to extend her hand.
When addressing to a Turk the most common method is to call a man by his first name
followed by 'bey' (pronounced bay). Similarly a woman's first name would be followed by
'hanim' (pronounced ha-num).
When professional titles exist such as Doctor or Professor, always use them either on their
10

14. own of before the first name. Curiously this is also the case with many other professions
such as lawyers 'Avukat', engineers 'Muhendis' and managers 'Mudur'.
Knowing the origin of the person will be important. Generally, people from Eastern sides
are more conservative, attached to Islamic traditions and values. Whereas, people from
Izmir, Ankara and Istanbul are more westernized.
Advice:Never back away and keep eye’s contacts during the conversation are the keys to make
your counterpart feel comfortable and respected.
Different to western habits, Turks express a "Yes" by nodding their head, while "no" is shown
by raising their head back and rolling their eyes. To say, "I don’t know", they lift their
shoulders
2.1. Appointment
First of all, being late for an appointment is considered as non-polite in Turkish business
culture. It is important to avoid following periods for appointment
‐ Children’s day and national independence: the 23rd of April
‐ Victory day: the 30th of August
‐ Republic day: the 29th of October
‐ Minute of silence at 9:05 am for Atatürk: 10th of November
o Ramadan:
Three days of “SekerBayrami” (days before Ramadan)
Three days of “KurbanBayrami” (70 days after Ramadan)
“CumaNamazi” every Friday from about 1 a.m. to 1:30 p.m. in Islamic countries, Friday is
the traditional weekly holiday. Many Turkish males attend the Friday congregational
prayer
3. Making a deal:
In the main, being honest and well prepared with a concrete proposal is very important for
Turkish businessmen. Turks are used to be sure about which kind of company they are
working with. They also want to feel that their counterpart is ready to build a long-term
relationship with their company.
Moreover, there are also some tips that we have to adopt during a business negotiation
with Turkish people:
In turkey many companies are owned and run by the family, business is usually
perceived as personal. So dealing with Turks, we should know the hierarchy system of
the company or the family.
Commonly, at the first meeting, we may negotiate with less senior members. So, the
decision can be postponed. That’s why we must give some time for our counterpart,
and wait for the decision made by the head of the organization.
In each proposal, we must demonstrate mutual profitability and benefits.
11

15. Turks usually start at extremes to gage our response. Then, we must prepare our target
figure and work slowly towards concessions and alternatives.
Each suggestion has to be seen by our counterpart as a favor. During the negotiation,
we must try to reach an agreement with a mutual concession.
Turkish people don’t like deadlines and pressure. These tactics can lead the negotiation
to a negative result such as cancelling agreements. Consequently, we should be patient
and give our counterpart time to make decisions.
In western countries, people used to focus on financial benefits during a negotiation.
Nevertheless, negotiating, in particular with Turkish people, the financial issue won’t be
the most important thing. Conversely, pointing out some aspects such as power,
influence, honor, respect and other non-monetary incentives seem to be essential for
Turks.
3.1. Sales contract in Turkishlaw5
The Turkish contract definition is the same as the Belgian conception: “the sale contract is
a contract within a seller transfers a good propriety to a buyer who engages to pay the
price”
• Propriety transfer and propriety reserve clause
The propriety of the movable is transferred during the material delivery. However parties
can depart from the disposition in delaying the propriety transfer to complete payment
day.
• Risks
The risks are generally transferred during the goods delivery except if goods have already
been given to the transporter. In the last case the risks are transferred during the contract
conclusion.
• Price indetermination
Price can be fixed by the judge in reference to uses, if there is any parties’ agreement.
• Parties’ obligations
Seller Buyer
× The delivery of goods. In case of × Pay the price of contract and take
non-execution buyer can ask for possession of the goods during
termination. If the seller delivers too delivery.
much goods, buyer can accept or not
× Verify the goods compliance and
5
http://www.turkisheconomy.org.uk/econom
12

16. the surplus. notify every irregularity to the seller.
× Guarantee the real goods propriety × During a “high purchasing sale” if the
and that nobody can claim for buyer doesn’t settle the payments
propriety. Buyer can suspend the (less than 1/5th of the total price) the
payment. seller can terminate the contract and
ask for indemnity (temporary goods’
× Guarantee the quality of products as
use).
agreed in contract. Buyer can ask
for damages and contract reparation
or termination.
• Other non-execution obligations
A party is responsible for her non-execution except in the major force case. Therefore
parties can introduce result and middle obligations.
The creditor has an action against the debtor of his own negligent debtor if he suffers a
particular prejudice due to this negligence (for instance the delay payment).
3.2. Commercial contract with the partner (joint venture)
In order to avoid any misunderstanding; parties must sign each page of the contract and
eventual appendixes.
The contract’s content:
The precise talks of Turkish partner: connect with administrations, provide appropriate
documents, reach the same sales objectives, provide qualified staff, and come to
agreement over decision repartitions.
Obligations of each party
Goods and territory definition
Declare clearly that the know-how, discovery, (final) products prototypes, etc is own
entirely by the Belgian Fashion.
The length precision (1 or 2 years without tacit renewal) if Turkish partner
performances default.
Sales objectives: minimal guaranteed objectives
Financial responsibility, clients’ claims, benefits sharing, anticipated termination,
redundancy payment, compensation breaking off.
Obtain more complete and more precise information about your potential partners
The fact of going through an intermediary will make your partners more comfortable.
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17. 4. Sales arguments
4.1. Selling Point
Kanyon in Istanbul offering 400,000 square-feet of retail space, 26 tower floors of offices,
179 luxury residences and luxury hotels all around the shopping mall.
We suggest Istanbul as the best district because of its huge population of upper and middle
class populations. It is also a place where people are really westernized with a particular
taste for fashion. The monthly rental of a shop I Kanyon is $190/sqmetter.
4.2. Price
As Belgian Fashion supply luxurious items, we decide to have a profit of at least 400% on
the purchasing cost. It means that our price to the final costumers will be around Ex-work
price times4.
4.3. Merchandising(find some pictures in appendix)
Attractive departments: sales force presentation / clean departments
Display: right and logic product’s display, harmony in color. Premium products and
new collections on eyes level and aisle end displays.
Selection: number of references in the right quantity.
Boutique’s fitting out = Renewing of departments’ disposition / Women and men
collections on separated departments and accessories near to cash desk / Great
fitting room at the back of the shop with several equipment.
Appealing windows shopper regularly changed (every 3 weeks) according to
seasons, collections, and local events. We will use specific silver-coated mannequins
to highlight the luxury context.
4.4. Selling method
Considering our Business-To-Business activities, we want to be present in showrooms
taking place during the fashion weeks in Istanbul. This event happens twice a year. This is
the occasion to present our new collections and to develop the image of Essentiel in
Turkey.
In the context of a long-term process, we envisage to build up a customers portfolio, made
up of clothes distributors and investors having opened new shops with our clothes.
To avoid to take many risks and to be obliged to end contracts suddenly with non
trustworthy customers we will introduce two distinct watch systems: An A.B.C. analysis:
According to the contribution tour our turnover for the B2B activities, we will classify our
customers in three categories (percentages are given for information only, it can changes
and be different in effective situations):
A category: “Big customers” that will represent only 15 to 20% of our clientele but
contributing up to 80% of our B2B turnover. We will have to focus on them by regular
visits, flexibility for the terms of payments, discounts and specific and individualized letters
informing them about new collections and products.
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18. C category: “Small customers” that will represent 75 to 80% of our clientele, but
contributing for only 10 to 20% of our B2B turnover. This share of our customers shouldn’t
incur big costs considering the development of loyalty because they will be considered as
“less important”. They will be managed as normal customers and won’t benefit from any
specific advantages. This entire category will receive standardized letters and flyers.
We will maybe have also a middle category (category B), still interesting for their
contribution but less important than the A category. They will benefit from intermediary
terms of payments. We will maybe focus on them also, following the aim to make them
access to the A category.
This analysis will also serve as an indicator of our position with our customers:
- If we have a big amount of small customers, it could represent a risk for our
profitability and then a risk also for our credibility in front of the banks, putting
into danger our possibilities to get loans. We will therefore try to stimulate these
customers to increase their buying baskets before to decide give up them if it’s
impossible.
- If 2 or 3 customers contribute for a too big share of our turnover, we will have to be
vigilant about them because it will mean a big dependence and a too risky position.
We will, then, have to consider developing our portfolio by focusing on negotiation
techniques during the fashion weeks. The final aim being to get new customers.
- Key indicators and ratios to analyze the current situation of the customers (mainly for
big customers):
First, obviously, if we are able to get the current balance of the customers, it is the best way
to analyze the situation and to prevent from any risks. But in some cases, it is not available
and then we will have to analyze the income statements.
Several indicators could be interesting:
General profit is divided in three parts: Operating profit, financial profit and
exceptional profit.
The operational profit is the main indicator because it shows if the main activity of
the customer is profitable. If not, it means big problems and maybe the customer
should specialize in another sector.
The financial profit is really important also because it represent the level of debts of
the customers or the opposite, his financial stability. If the customer doesn’t manage
it well it can mean a big dependence to the banks. Moreover, if the customer have
too many debts it will be difficult for him to get loans.
The exceptional profit, should not really be taken into account, if the bad situation
is temporary and could be solved in a short-term context, it should not be very
risky.
Cash Flow = net profit + depreciation of tangible fixed assets and allocations to
provisions – depreciation of tangible fixed assets and provisions write-back + book
value of assets sold – proceeds from sales and assets.
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19. This indicator will show the ability of the customer to finance his activity by himself
without the help of the banks.
Working capital = equity (depreciation of fixed assets and provisions) + liability –
fixed assets.
This indicator will show the share of the stable resources financing the current
assets. Then, it means the internal wealth of the customer, increasing his power of
negotiation with the banks and partners.
Non-operating working capital = Stocks + claims – liability.
This indicator has to be compared with the working capital to be sure that the
treasury is positive. This will mean that the customer doesn’t need external help
(loans from the banks for example)
But also some ratios:
Self-financing = equity / permanent financing.
This ratio shows also the ability of the customer to finance his activities by himself.
The perfect situation should be 100% but the threshold to detect a potential risk
should be 40%. Under this, the banks could ask a higher risk premium.
Liquidity of the assets = (current assets + available funds) / total of the assets.
This ratio shows the possibility for the customer to get money available in a short-
term context. The threshold should be 30 or 40%. But if the customer has other
possibilities to get money this should not be a problem.
Customer’s solvency = (claims + available assets) – stocks / short-term debts.
This is an important ratio to know the situation of the customer. If his solvency is
decreasing, it should be take into account as a risk. The ratio should be 100% to show a
perfect healthy situation.
4.5. Local store manager
The shop will be opened from 9 AM to 7 PM, six times a week, and only closed on Fridays.
During rush hours, all the staff must be present in the shop to run well the business. While,
during slowdown periods, only 2 persons will be required. Each sales team member should
have to work maximum 6 days a week but the working schedule will be flexible.
We will teach the sellers how to use the “5C” and “SONCA” techniques to manage the
customers’ relationships.
“5C” = Contact/Search/Convince/Conclude/Conserve (Hierarchical structure of the
relationships)
SONCAS = Security / Pride / News / Comfort / Money / Sympathy (=Customer’s
needs)
Customers’ oriented sellers should be able to increase the purchasing baskets of the
costumers.
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20. 5. Preparation of the negotiation
In order to make a good negotiation, we have to be fully prepared. The following points
reflect the way to proceed. Note those information are general, so we will reveal the key
aspects and put into practice our BATNAs during the negotiation.
OBJECTIVES INFORMATIONS CONCESSIONS
Ours What we want? Does he have requirements?
Convince a Turkish − Contacts with − Incentives
businessman to become our administration. − Shares in the company
partner showing him all the − Facilitation of the import − Decision making
advantages of investing in our procedures − Localization
project. We don't only want − Knowledge of the market − Assortment
him to invest money, but also and culture − Fees participation
to motivate him being deeply − Protection, advice against
involved in the development of corruption
the new shop. − Local staff
His What he wants? What can we do?
Invest in a project that − Information about the − Giving him proof to explain
guarantees him long- product our arguments
termprofits. − Information about the − Showing him the advantages
company of our proposition
− Our objectives
− Guarantee about the
company's reliability
What can't we do?
− Giving him too much
responsibility in the
beginning
− Blindly trust him
− Give him too much technical
elements before signing the
contract.
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21. To be sure that the partner will be interested in investing in our project, we must
demonstrate to him the different advantages of it. Therefore, we will do the “SONCAS”
analysis of our project.
During the negotiation, make sure to respect the cultural
specificities of the partner. Long-term relation is important in
SYMPATHY
Turkey; therefore we must take it into account to build a
trustworthy relationship.
Our product is up market. Its USP (Unique Selling Proposition) is
PRIDE the fact that it’s a Belgian luxury brand whish offer limited
collections to its customers.
Turks are really sensitive with fashion and luxury items and Belgian
NOVELTY
Fashion specialties can bring them something new.
Concerning the stock, orders can be made by the “EDI” system to
COMFORT avoid big stock in the shop. They will be delivered in a way to
facilitate the storage.
MONEY
High add-valued with high quality
To avoid goods arriving in bad shape in Istanbul, we will order our
own travel packaging.
SECURITY
In order to prove to him our reliability, we can invite him to visit
our shopsin different location in Belgium.
6. Contribution point
A luxury Belgian BrandESSENTIEL:
a. Industrial support:
- Specifications (Famous designers, Products & Services and know-how)
- Reputation
- International experience
The value of our industrial inputs is around 45% of the subscribed capital. We limit this
value on 35%.
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22. Furthermore, we will handle the manufacturing and the exportation of our accessories
exportation in Turkey. (Taking into account transport, production, specifications, know-
how, and adaptation.)
Thus, we will negotiate to reach 75% on the sales profits. Our limit will be around 60%-
65%.
b. Financial sharing:
- 5% of the issued capital, our limit is 15%
c. U.S.P: Why should they (Turkish partner) choose us?
‐ A reputation confirmed in the luxury sector
‐ Temporary & Territorial exclusivity
‐ On the products: handmade Accessories, Famous designers, Limited collections
‐ Offer possibilities to Turkish young designers to participate on our collections
d. Payment terms
‐ A bank account in Turkey
‐ Payment deadline
‐ Payment terms: 30 days at side.
‐ Exchange of the mutually solvency evidence
e. Confidentiality & Legalization of the contract6
To protect our specifications license and to legalize the contract with the Turkish partner,
we will register it at the Belgian Foreign Affairs Ministry, but also at the Turkish Chamber
of commerce and industry.
6
http://www.interex.fr/fr/fiches‐pays/turquie/modalites‐d‐implantation
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23. Conclusion
Throughout this work, we have apprehended different aspects of the negotiation. First, we
have seen how to organize and manage the sales force. Then we explain how to prepare an
offer, build a sales pitch, approach the customer and negotiate. Finally, we discovered how
we could conclude our commercial contract with a Turkish partner in the most favorable
way for us.
After analyzing many advantages and disadvantages, we decided to no hire expatriates but
send someone (missionary) during 4 weeks to teach sellers and to assist for the shop
implementation. Concerning the localization, we are recommendingIstanbul, the most
appropriate places for a luxury clothing shop.
Besides, the governmental procedures are extremely complicated. Therefore the foreign
investor should maintain good relations with the administration.We can say that an active
partner could help us to adapt our business to the local market.
So, any investor should know that, the essential bases of success with Turks are personal
contact and relationship based upon trust. That is why negotiations and business with
Turks is a long-term process.
During the negotiation, each party must make compromises in order to achieve a win-win
situation.
In order to offer to the Turkish counterpart best commercial proposals and alternatives,
different elements have been tackled, such as market prospection, sales management and
CRM.In additional of that, we’d used the “SONCAS” (Security, Pride, Novelty, Comfort,
Money and Sympathy) of our products and concept, to build our arguments in order to
convince our Turkish investor.
Regarding contracts, it is a joint-venture contract automatically submitted to the Turkish
law. The various elements of contracts such as the propriety and risks transfer; price
determination or parties’ obligations are the same as in Belgium.
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24. Bibliography
Books
Carole Hamon, Lézin (P.), Toullec (A.), Gestion de clienteles, Dunod, Paris, mai 2004
Files
« Ouvrir un point de vente à Istambul », Editions Ubifrance 2008
Web sites
www.igeme.gov.tr/english/ allaboutturkey/pdf
www.istanbul.mydestinationinfo.com
www.wto.org
www.invest.gov.tr
www.turquie-news
http://www.turkisheconomy.org.uk/econompublicfinances.htm
http://www.globalnegotiationresources.com/cou/Turkey.pdf
http://www.abh-ace.be/fr/binaries/turquie-03.2010-gn_fr_tcm449-104588.pdf
http://www.kwintessential.co.uk/etiquette/doing-business-turkey.html
http://www.kanyon.com.tr/#/en/shopping-1/fashion__clothing-40/
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25. Appendixes
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