Unit 8 Supply and Demand

Unit 8 Supply and Demand

I. Suggested Teaching Plan

Objectives

Students will be able to:

1. understand the key idea of International Business English Correspondence and Negotiation;

2. master some basicknowledge of International Business English Correspondence and Negotiation (establish business relations, inquiries and offers, counter-offer, bid and counter-counter-offer, acceptance and order);

3. conduct a series of reading, listening, speaking and writing activities related to the theme of the unit;

4. complete all the relative exercises in this unit collaboratively with other peers.

Time allotment

1st period pre-reading activities (familiarizing new words, warming-up questions and background information)

2nd period while reading (highlights of the text)

3rd period highlights of the text

4th period after-reading activities

II. Teaching Method(s)

1. ppt or

2. teacher gives lecture mainly or

3. students read, teacher asks questions with detailed explanation or

4. ask students do ppt to do presentation

III. Explanatory Notes on Technical Terms

1. circular－leaflet or letter sent to many people.

2．integrity－quality of being honest in character.

3．quotation－amount stated as current price of stocks or commodities on sale.

4．offer－to state the price and other terms of the goods to be sold.

5．catalogue－a list of articles usually, in alphabetical order, or under special headings, and often with descriptions of the articles.

6．quotation－the price stated; statement of the current price of an article.

7. discount－percentage by which a full price is reduced to a buyer by the seller.

8. specification－details, instructions, etc, for the design, materials of something to be done or done.

9. firm offer－an offer which cannot be changed.

10. non-firm offer－an offer that is subject to the seller’s final confirmation.

11. trial order －a small order which is to be followed by a lot of orders if it turns out satisfactory.

12. bid －a quotation or offer made by the buyer.

13. counter-offer －refusal and amendment to an offer.

14. counter-counter offer －refusal and amendment to a counter-offer.

15. margin －the difference between the money of the selling price and buying price.

IV. Detailed reading

Pre-reading tasks

Warming-up questions

1. How much do you know about how to establish business relationship?

2. Can you say something about the general process of doing a business?

3. Do you know how many steps are involved to enter into a business contract?

Contents

1. The most important functions of Business Correspondence

•Create goodwill

•Leave a good impression

2. Rules of writing:

Keep it

•Brief

•Specific

•Reasonable

•To the point

3. Establishing Business Relations

Channels for those who want to open up a market to sell something to or buy something from firms in foreign countries:

•Communication in writing

•Attendance at the export commodities fairs

•Contact at the exhibition held at home or abroad

•Mutual visits by trade delegation and groups

4. Contents of the letter:

1)The sources of the writer’s information

Banks

Periodicals

Advertisements

Business connections

Market investigations

The commercial Councilor’s Office

The Chambers of Commerce

Enquiries received from the merchants abroad

Self-introduction by merchants themselves

2) His intention.

3) The business scope of his firm and also its branches and liaison offices, if any.

4) The reference as to his firm’s financial position and integrity.

5)Enquiries and Reply

From regular customers

---maybe very simple

---only the name and /or specifications of commodity

From others

---in great details

---name of commodity

---quality

---specification

---quantity

---terms of price

---terms of payment

---times of shipment

---packing method

---discount

The reply to an enquiry should be prompt and courteous and cover all the information asked for.

6. Offers and Bids

•Making an offer is a most important step in negotiating a transaction.

•An offer is a promise to supply goods on the terms and conditions stated.

•Firm offer vs. non-firm offer

•The offer made by the buyer is called Bid. Bid is a kind of offer.

7. A satisfactory offer will include the following:

1)An expression of thinks for the enquiring, if any

2)Name of the goods, quality of specification, quality, details of prices, discounts, terms of payment, , and packing conditions

3)The period for which the offer is valid if it is a firm offer

4)Favorable comments on the goods themselves

5)A supplementary, short paragraph to draw.

6)An expression of hopes for an order

8. Counter-Offers and Counter-Counter Offers

When the buyer draft the letter of partial rejection, he should cover the following points:

•Thank the seller for his offer

•State reasons for express regret at inability to accept the offer.

•Make a counter-offer if , in the circumstances, it is appropriate

•Suggest other opportunities to do business together.

9. Order

To make your order clear and easy to understand, you should list:

Name of commodity, model number, size, color, or any other relevant information.

Quantity

Date and method of shipment.

Price per item.

Packing

Payment

10. When a seller receives the “first” order from a new customer, he must write a letter to acknowledge the order. The letter should be:

Express pleasure as receiving the order.

Add a favorable comment on the goods ordered.

Include an assurance of prompt and careful attention.

Draw attention to other products likely to be of interest.

Hope for further orders

11. Acceptance and Contract

•A deal is concluded when the sellers’ firm offer is accepted by the buyer or a non-firm offer.

• After acceptance and confirmation, a Contract or a Sale Confirmation is made out generally by us as the sellers, and signed by both parties.

12. Usual forms of contracts for import/export trade of Chinese FTCs:

Purchase Contract and Sales Contract, with General Terms and Condition overleaf, usually for business involving considerable amount.

Purchase Confirmation of Sales Confirmation, as short from contract, used mainly for trade of odd goods.

Agreement, such as Agency Agreement, Exclusive Sales Agreement (包销协议）

Order, signed by importer or end-user.

Indent, used usually bt agents or midman in other countries.

Memo, attached to contract, indicating that both parties agree on the correction of certain points of contract.

13. A typical international business contract of agreement

usually contains the following contents:

1) Preamble:

Title, Number of the Contract, Date of Signing, Signing Parties, Place of Signing, Each Party’s Authority, Recitals of Whereas Clause

2) Body (Including Definition Clause, Basic Condition and General Terms)

Name of Commodity(Specification), Quality, Quantity, Price, Packing, Insurance, ShipmentDelivery, Industrial Property Right & Patent, Payment, Inspection, Training, Confidential, Guarantee, Claim, Breach & Rescission of Contract, Arbitration, Force Majeure, Applicable Laws, Miscellaneous.

3) Witness (Ending)

Concluding Sentence, Signature, Seal

14. Packing

Packing is to goods means what clothing is to man

•Transport packing (outer packing)

•Sales packing (inner packing)

15. Packing must be strikingly marked

Packing marks:

•Transport marks

•Directive marks

•Warning marks

16. Transport marks consist of

Consignor’s or consignee’s code name,

Number of the contract or the L/C

The port of destination

Numbers of the packed goods

“STC

NEW YORK

5278”

“USE NO HOOKS THIS SIDE UP HANDLE WITH CARE KEEP DRY DONOT DROP”

“DANGEROUS GOODS KEEP AWAY FROM HEAT ACID WITH CARE INFLAMMABLE EXPLOSIVE”

17. Shipment

The time limit governing a shipment is of three categories:

1. The shipment with a fixed date, eg. Before the end of June, on June 25;
2. The shipment with a date in the near future, e.g. immediate shipment, prompt shipment.
3. The shipment with an indefinite date, e.g. shipment within 30 days after the date of receipt of the letter of credit, shipment subject to shipping space available, shipment by first opportunity.

18. Export transportation involves a lot of complicated procedures. Before the goods are to be dispatched, the following must be duly seen to:

•Send the shipping instructions by the buyer.

•Select a shipping line and a particular vessel

•Book shipping space or chartering and sign the contract of carriage.

•Register the cargo on shipping note and send the shipping note to a shipping company;

•Register details on customs, entry forms and send them to Customs

•Arrange adequate packing, including shipping marks

•Receive the bill of lading from the shipping company

•Pay the freight bill

•Arrange shipment

•Send the shipping documents and shipping advice

19. Payment and Balance

Method of payment commonly used in international payments and settlements includes:

Remittance

Collection

Letter of credit

Bank guarantee

20. Insurance

-Insurance of Marine Transportation

•Basic insurance coverage

FPA

WPA

ALL RISKS

•Additional insurance coverage

General additional coverage

Special additional coverage

-Insurance of Land Transportation

-Insurance of All Transportation

21. Commodity Inspection

It covers the quality, quantity, weight,packing etc.

Certificates of Commodity Inspection

(specimen letters such as “Inferior Quality” “Damage to Package” “Shortage of Shipment”)

22. Complaints , Claims and Adjustments

•The First Kind of Complaints of Claims

The wrong goods may have been delivered

The quality may have been found unsatisfactory

The shipment may have been found damaged, short, missing or late

The prices changed may be excessive or not as agreed

•The second kind of Complaints of Claims

23. Usually a complaint or claim letter should follow the under-mentioned outline:

1. The opening states the problem to complain by regretting, and mentions the date of the order, the date of delivery and the goods complained about
2. The body gives, if any, additional information why it is necessary to write, why and how you are inconvenient, etc., in order to state your reasons for being dissatisfied and ask for an explanation.
3. The body also states what you want to be done what you consider a reasonable demand to satisfy your claim.

24. The following rules should be followed by the seller when dealing with a complaint:

1. The first thing that has to be decided is whether the complaint is justified. If it is so, the sellers have to admit it readily, express his or her regret and agree to the buyer’s request.
2. If the complaint or claim is not justified, point this out of politely and in agreeable manner. It would be a wrong policy to reject the customer’s request.
3. If the seller cannot deal with a complaint promptly, acknowledge it at once; explain that the matter is being investigated and a full reply will be sent latter.

25. Agencies

The types of Agency

•General agent

•Sole agent

V. After-reading activities

A. Try to do the exercises according to the text.

1. Translate the following sentences into English.

1). 贵公司信誉卓越，我们极愿与你公司建立业务关系。为此，寄上商品目录和价目单，供贵公司参考。

2). 来函收悉，得知贵方愿与我方建立业务联系，谨表谢意。

3). 据了解，贵公司是中国工艺品有潜力的买主，而该商品正属于我们的业务范围。

4). 我们可以按国际市场价格给您报价。

5). 你们所有价格都是成本加运费保险费价格。

6). 如果你方报价具有竞争性，交货期可接受的话，我们愿意向你方订货。

7).我们建议你方再次重新考虑发价，使之与国际市场价格一致起来。

8). 如果你方能接受我方的数量，并答应提前交货，我方就接受你方的价格。

2. Translate the following sentences into Chinese.

1). We write to introduce ourselves as one of the leading exporters of a wide range of electronic products from the United States.

2). We thank you for your letter dated March 1st and shall be glad to enter into business relations with you.

3). Please quote your lowest price CIF Shanghai for each of the following items, inclusive of our 3% commission.

4). If you can supply goods of the type and quality required, we may place regular orders for large quantities.

5). In reply to your letter on March 15th ,we have found it impossible for our customers to accept your quotation as it is too high.

6). This offer is based on the expanding market and is competitive.

7). Although the prevailing quotations are somewhat higher, we will accept the order on the same terms as before with the view of encouraging business.

8). I found your price much too high to be acceptable to us. We hope you will take the initiative and bridge the gap.

B. Compose a dialogue on the following situation.

1) Mr. Yu, General manager of Changsha Electronic Products Imp. & Exp. Corporation, makes an inquiry for IBM Computers. Mr. Kinch, General Manager of Far East Industrial Corporation, makes a firm offer: price is $950 per set FOB New York; the Payment is by irrevocable L/C; and the minimum is 1000 sets.

2) Mr. Yu wants to know whether it is firm offer, and he expresses hopes to place a trial order on certain conditions, so Mr. Yu and Mr. Kinch are discussing the details.

C.Complementary reading materials

Sentences Commonly Used on Establishing Business Relations

We are a state-operated corporation, handling the export of animal by products and we are willing to enter into business.

 We write to introduce ourselves as exporter of fresh water pearls having many years’experience in this particular line of business.

1. On the recommendation of Merrs. Harvey & Co., we have learned with pleasure the name of your firm.
2. We have your name and address from “The Journal of Commerce”.
3. Your letter expressing the hope of establishing business connections with us has been received with thanks.
4. We now avail ourselves of this opportunity to write to you with a view to entering into business relations with you.

Sentences Commonly Used on Enquiries

Please send us samples and quote us your lowest prices for…

Please quote us your lowest price with the best discount and the date of delivery.

1. Please quote your lowest price C.I.F. Singapore for each of the following items, inclusive of our 3% commission.
2. Please send us your best offer by cable indicating packing, specification, quantity available, discount and the earliest date of delivery.
3. If you can supply goods of the type and quality required, we may place regular orders for large quantities.
4. We hope that your prices will be workable and that business will result to our mutual advantage.

Sentences Commonly Used on Offer and Bid

1. We thank you for your enquiry of July 6 and are sending you, under separate cover, a specimen of … together with our price list.
2. Thank you for your recent enquiry. We have a large quantity of … in stock, and are pleased to offer them as follows:
3. With reference to your letter of …, enquiring for …, we enclose our Quotation No… for your consideration and trust you will find our prices acceptable.
4. Our best offer is given below subject to our final confirmation.
5. Please select the items in which you are interested and let us have your enquiry or order promptly.
6. We regret to say that the goods required by you are unavailable for the time being, and for this reason we refrain from making you an offer.

Sentences Commonly Used on Counter Offers

1. This is our rock-bottom price, we can’t make any further concession.
2. Our price is fixed at a reasonable level.
3. Our counter-offer is in line with the international market.
4. The price we have given is a fair price.
5. Let’s meet each other halfway.
6. We’ll be waiting for your confirmation.

Sentences Commonly Used on Orders

1. We may place considerable orders with you if your quality is satisfactory.
2. With reference to your letter of May 6, we are pleased to give an order for the following.
3. Please supply 5,000 tons of coal in accordance with the details in our order No. 114.
4. This order must be filled within six weeks, otherwise we will have to cancel the order.
5. We are pleased to confirm your order of July 11 for 1,000 dozen silk handkerchiefs.

Sentences Commonly Used on Packing

1. We can meet your special requirements for packing but the extra packing charges should be borne by you.
2. Packing in sturdy wooden cases is essential. Cases must be nailed, battened and secured by overall metal strapping.
3. The outer packing should be strong enough for transportation. As to the inner packing it must be attractive and helpful to the sales.
4. The details concerning packing and marking must be strictly observed.
5. Effective measures must be taken to protect this product, as it is particularly subject to breakable goods.
6. We usually pack each piece of men’s shirt in a polybag, half dozen to a box and ten dozen to a wooden case.

Sentences Commonly Used on Shipment

1. We should be glad if you could manage to ship the goods by S/S East Wind sailing from July 1st.
2. We shall appreciate it if you will effect shipment as soon as possible, thus enabling our buyers to catch the brisk demand at the start of the season.
3. We trust you will make all necessary arrangements to deliver the goods in time.
4. Please amend the covering letter of credit to allow partial shipment, under advice to us.
5. We are pleased to inform you that we have booked shipping space for your order No…of …on S/S …, ETA…
6. We are pleased to inform you that the goods under your Order No… were shipped per direct steamer …on …and the relative shipping samples had been dispatched to you by air before the steamer sailed.

Sentences Commonly Used on Payment and Balance

1. Payment is to be made against sight draft drawn under a confirmed, irrevocable, divisible and transferable letter of credit without recourse for the amount.
2. As agreed, the terms of payment for the above orders are letter of credit at 60 days’ sight or D/P sight draft.
3. As to payment, we are agreeable to draw on you at … days’ sight, documents against acceptable (D/A)
4. With regard to Contract No…, we are agreeable to D/P payment terms.
5. We hope (that) you will accommodate us in this respect and look forward to your favorable reply.
6. Please do your utmost to expedite L/C, so that we may execute the order smoothly.

Sentences Commonly Used on Insurance

1. We shall take our insurance at this end under our Open Policy.
2. Insurance is to be covered against All Risks and War Risks.
3. Generally we cover insurance WPA and against War Risks in the absence of definite instruction from our clients.
4. Insurance on the goods shall be covered by us for 110% of the CIF value, and any extra premium for additional coverage, if required, shall be borne by the buyers.
5. This risk is coverable at a premium of …%.
6. We regret being unable to agree the buyer’s request as stated in the L/C stipulations for insurance to be covered up to the inland city because our price is based on CIF Taibei.

Sentences Commonly Used on Complaints, Claims and Adjustment

1. On examination we found that the goods do not agree with the original samples.
2. When unpacking the case, we found the color unsatisfactory.
3. …cases were found to be badly damaged. This is apparently