Succeeding at Business in Southeast Asia

CHAPTER 2The Role Culture Plays in Determining Economic Value

A very simple phrase comes to mind when thinking about the Asian culture: “You get what you pay for!” That said, it does not mean you will not go through a fierce negotiation on the price.

I have yet to meet an Asian culture that did not negotiate on price. Everything is negotiable. Do not forget this when you are pricing your goods, especially in a business-to- business environment. It is also important to remember this when dealing with suppliers: do not take price at face value, even if it is a good one. A good negotiator is truly respected in the Asian culture; someone who does not negotiate may be seen as a lamb about to be fed to the wolves.

If your focus is on sales price, make sure you build this into your manufacturer’s suggested retail price (MSRP) or book price. A client negotiating a discount will feel they got a better deal and perhaps be seen as more valuable inside their own organization. Assuming you have initially priced it correctly, you may see a higher sales price than you might otherwise have expected. That said, do not thoroughly overprice your product or you could hurt your discussions.

Negotiation: Price Is Not the Only Consideration

When Gallagher & Associates first began operations in Singapore, we brought a slightly higher price into the market than what was normal at the time. We were not at U.S. pricing yet, but we were above market average. What we discovered was that although price ...