This article provides insight as to why some proposals may not succeed, as explained by a buyer. It also looks to tactics they may employ to get you to drastically reduce your bid, whilst revealing that such a gesture on your part may not always be necessary to bid success.

1. SCA Conseils France| Your Partner for Export Tenders | © 2011 For Non-Commercial Use Only
What do you do when your buyer tells you they like your offer but they
have another option that is 20% cheaper.
It is one of the elements that makes a capitalist economy. Competition. This can work for
us, in the guise of lowering the prices we pay, or against us if we're on the receiving end of
this downward pressure. Competition is one of the mainstays of good buying as without it
a buyer is either bluffing or is just looking for a non-negotiated purchase.
A good tender from a buying point of view is one where there are more than two
participants, they are competing on very similar product specifications and offer similar
ancillary services. In this scenario all participants are at a disadvantage as the only variable
is price. And we invariably end up with a situation comparable to the Perfect Competition
model in econonics where the selling price is completely market-determined.
In reality this tends not to happen, which is good news otherwise none of us would make
any money. But a word of caution, just because this scenario is very difficult to achieve
doesn't mean that a good buyer will not give every last ounce of energy to achieve
something close to it. And if they can't they will certainly go the extra mile to make you
believe it is true. Which brings us to the title of this discussion.
You are confident in your product, you know your market and your competition and you
know that the quality of your product justifies a premium (large or small) over the market
offering. Anyone can knock out a basic version of what you do, but no-one does it better
than you.
Unfortunately this argument on its own does not resonate with your buyer. They may
counter that they have a list of characteristics to deliver and all tender participants have
covered this. Anything above this is surplus to requirement, and if it costs more money
then it probably isn't worth it.
That is the argument, but it should be taken with a pinch of salt. The buyer actually means
they have to buy the best product for the least price, as no-one wants to come back and
replace a product 18 months after installation. Nonetheless by convincing you of the
SCA Conseils France is registered in the UK. All Rights Reserved.
www.scaconseils.fr

2. SCA Conseils France| Your Partner for Export Tenders | © 2011 For Non-Commercial Use Only
'mimimum requirements' argument above, they may also convince you to take that 20%
hit on your premium product.
Indeed you may be tempted, as the way the buyer has skillfully conveyed the situation has
made you believe that you are categorically sidelined unless you drop your price.
It is important at this stage to recognise that you are never going to get away with giving
nothing. Psychologically it works wonders by conceding on ones price, even if it is 5%.
The key is damage limitation therefore, to make the buyer think they've won big whilst
you concede the strict minimum. Examples of damage limitation are as follows,
– Compliance with the buying specification. If someone else offers your product at a
60% discount, it is probably not the same product. One must insist on adherence to
the specification and that whatever you give it is on the understanding that your
product is being compared fairly.
– Physical comparison. Is it possible to arrange for competing parties to line their
products up side by side to show your superiority? Bear in mind this will entail an
investment on your part in the guise of a free sample.
– Find the differentiator. You shouldn't be afraid of pressing the buyer for
information so as to be able to point out what makes you different. Once you have
this differentiator, you can either use it to reinforce your position, or to concede it
and pass the saving onto the buyer.
________________________________________________
SCA Conseils France is a tender consultancy specialised in the French market. We are here to provide timely
and astute advice from the moment you receive an enquiry relating to an export project in French-speaking
markets. For more information on how we can help, please click here.
SCA Conseils France is registered in the UK. All Rights Reserved.
www.scaconseils.fr