Business Marketing: Nueva Retailers' Sydney Shirts Negotiation

This project presents a market analysis of Nueva Retailers, focusing on its business-to-business (B2B) marketing relationship with Sydney Shirts, a manufacturer of men's wear. The analysis explores negotiation strategies, sales increases, and profit margin management. As the general purchasing manager, the author details the negotiations, including the launch of exclusive products, promotional sales, and agreements on net margins and order quantities. The project evaluates the impact of these factors on both short-term and long-term revenue, customer satisfaction, and market growth. It also examines the importance of maintaining a strong supplier-customer relationship, promotional efforts, and the impact of market competition. The project includes the congruence or deviation from what was wanted and what was gotten. The project also covers topics such as promotional sales, discounts, and the impact of various negotiation points on both companies' financial outcomes, and the overall marketing strategy.

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TITLE OF THE PAPER CENTERED AND IN CAPS LOCK
by Student’s Name
Code + Course Name
Professor’s Name
University Name
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Date

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Introduction
This following project is based on a market analysis of a firm named Nueva Retailers,
which shows the factors and the relationship between Sydney shirts and also compares with
other retailers of Sydney shirts. The firm is located in Australia and it has many retailing
stores in 50 different locations all across the country. It also includes the steps of negotiations
with Sidney shirts and the factors to negotiate with them. It is a brand that manufactures
men’s wear in Australia. The following project indicates a business marketing strategy called
B2B or business to business marketing, how to increase sales, how to avoid losses and how to
maintain a proper relationship between buyers and sellers (Geiger, 2017). The factors
negotiated with Sydney Shirts and the ones negotiated by them will be justified in the
segments below using marketing concepts and quantitative analysis.
Analysis
An explanation of why I agreed to the result, i.e., what benefits are there for our firm in the long-run
and short-run and the arguments made by the other party
I am the general purchasing manager of this firm. Therefore, I made the negotiations
with one of Sydney Shirt’s sale representative to increase the revenue of our firm and grow
the sales numbers in the long-term. Marketing is based on potential customers and if the
variety of products will increase then the rate of customers will also increase as well as sales.
So there should be a proper survey to know about the customer’s satisfaction and making the
store appealing to the customers (Jung, 2018). One of the factors that will make our retail
stores exclusive in the market is if we have something exclusive for them. For that, our
company wants to launch specially knitted wearables with our store’s label and we expect
Sydney Shirts to be the supplier of this product. Moreover, this product will be only sold to
us by them which would serve the purpose of being exclusive. It also means that this can
replace two and half percent of our current volume. We would like to build a unique selling

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point which will add to our store something special. It is our responsibility to respect all
suppliers and to understand the need If the customers and fulfill their needs by providing
them the right product at the right time. We aim to offer the most exclusive products to the
customer in a proper budget (Laubert & Geiger, 2018). The Sydney shirts will also be
benefited because we will sell our products through all fifty stores located in different places
in our country and it will not only promote Sydney shirts but also it will make new market
shares which will help the company to convince more customers. The exclusive product will
be beneficial for our market growth in the long-run. The main purpose of our company is to
sell more products to more people at a higher price but with added value. Since Sydney Shirts
is a quality brand, this will add value to our products. Our company aims to understand the
customer so well that the products and services fit them and sell themselves. Our company
also aims to develop different websites and build promotional material such as business
cards, brochures, signage, etc (Sigurdardottir, Ujwary-Gil & Candi, 2018). Our business
strategy also involves the regular communication with our clients, fulfilment of our
commitments and concerns, etc. Regardless of whether they are achieving the desired result,
such as increasing sales, it is important to monitor and evaluate our marketing efforts
periodically. To order to ensure that our operations follow our campaign we must first assess
our marketing plan every three months. It is important for our clients to look after and foster
fidelity to your success (Krings, 2016). The similarity of individuals to our rivals can be
stopped from delivering excellent customer service. Promotional sales and discounts have a
significant and positive effect on our sales. On the other hand, Sydney Shirts has negotiated
to decrease our net margin for each unit and to increase the minimum order quantity to 500
units. As a result, the store has to spend 3 cents more per unit in cost, but it will decrease its
distribution cost by 5 cents. In B2B marketing, the relationship between supplier and
customer holds drastic significance. The relationship relies on trust, partnership, and support

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(Hinterhuber & Snelgrove, 2017). The marketing is rather driven by such partnership. On one
hand, it is important to keep up the trust that has bonded these two businesses for years
without any binding agreement. Sydney Shirts has held its end of the bargain by providing
quality products within the agreed time. However, it is time to increase our revenue and for
that, it is important to support them to achieve the same. Furthermore, it is always better to
maintain the present partnership intact than to make new ones with other suppliers, even from
a strategic angle (Backhaus & König, 2019). They have a good reputation in the market. So it
will be beneficial for us, in the long run, to have it tied with ours. Moreover, the brand can
encourage more customers in our way by spreading goodwill. We cannot treat one supplier
better than the others, but we can hold the trust intact to maintain our reputation and
agreement. Due to the same reason, we have agreed to get into a 6 months binding agreement
with them. Although we cannot forecast what may happen to the economy in the near future,
we can commit for a shorter period. However, to keep our aim in mind Sydney shirt has to
increase the yearly special price promotion from three to four because it is necessary to
maintain the same order with the competitors. In exchange, they agreed to process our orders
and deliver within 7 business days (Helmold, 2020). So we can hold onto the customers that
are coming to the stores. It will eliminate the waiting period for them which in result will
increase our sales. It will benefit us in a short time. Sydney has also agreed to increase the
number of days for sales promotion if we agree to decrease our net margin, meaning they will
earn extra revenue from it. At present, we purchase 270,000 units of items from Sydney
Shirts per year and currently the net margin of the firm is $2.25 for each unit. They want us to
reduce it by 5% which as a result will increase their charge per unit. If we reduce it by 5%,
we have to deduct 0.11 cents from the net margin and the modified margin will be 2.14 cents
(Crotts, 2017). This way, Sydney can increase 0.11 cents in their price per unit for which they
are selling the shirts to us. In this way, it will not affect the final price for which the

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customers are buying the items from us. But it will increase their profit in a short time. This
will, however, affect us as if we reduce our profit margin, which means we will not be
achieving the targets set. We could not agree to it unless Sydney provided us with other
solutions to increase our sales, revenue, and profit as well. Even if we do not make the profit
right away, we have to make more offers, engage in promotions and provide more diversity
in men’s clothes based on our targeted demographics. Moreover, our 25th anniversary is
approaching. So it is about time we offer something more than usual to mark ourselves in the
market amongst numerous competitors (Aykac et al., 2017). Since Sydney has agreed to
increase the discount period to 15 days instead of the current 10 days, we have opportunities
to sell the shirts from an old stock which will clear some of our invested cost in previous
orders. This will be added to our associated benefits. Moreover, for the anniversary we have
to offer another promotional sale for at least 15 days with special discounts for customers. If
we launch the special knitwear in this period, then we can also increase our net margin by 5
cents which will make our profit 2.30 dollars per item for all Sydney shirts purchased. Then
we can think of cutting our gross profit margin by 5% which will also reduce it by 11 cents
and our modified margin can be 2.19 dollars per Sydney shirts unit. But based on our
previous margin, the modified margin will still reduce our revenue. For our anniversary sales,
we have asked Sydney Shirts to provide us with some special packaging for their items for
three months (Steinhardt, 2019). But we cannot spend any extra charge for this packaging as
we are already behind in our track for increasing the revenue due to the reduced profit
percentage. It will cost them extra money to provide us with such but we have also agreed to
ensure that we will be placing orders with them during this period. We acquire 270,000 units
from them in a year. So, on average we order 22,500 units per month. During the three
months, we will place the order of the same quantity from them so that they can still gain
profit while spending their cost to provide the packaging. Moreover, assuming we order

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22,500 units per month, we will only ask for 10% of the ordered volume, which means 2,250
units of packaging per month. We will also make sure that we keep a “minimum purchase”
policy during this time on the Sydney Shirts item so that customers spend more on their items
(Lu, Kaufmann & Carter, 2019). Only for the minimum required purchase, we will offer them
special packaging. But in return, even the customers will notice the association of these two
businesses. Our company's manufacturing concept is based on the solution to increasing
supply while reducing its prices. The industrial principle further demonstrates that a business
can reduce costs by mass production. The manufacturer therefore produces a better quality
product, which is normally expensive. Farm and sales principles are both based on farm, but
the idea of sale relies on making a real product separately (Fu et al., 2017). The advertising
philosophy relies on ensuring that the products are sold in every possible way, irrespective of
product quality or consumer specifications. Sydney has also negotiated to offer their new
display systems for their items in our store. But we cannot make that exception for them as it
will be a disadvantage for our other suppliers. Although, we can display it for a temporary
period to see how the new system is working out for the customers and how they feel about it
(Brennan, Canning & McDowell, 2017). In either case, it will benefit us to make our stores
look good and to conduct research without spending money on the systems. We will also
have to engage in cooperative advertising with them twice a month which will increase our
cost for 2 cents per item. But the association with a reputed brand and them being our
ambassador will be favorable in the long-run. More customers will be easily attracted to our
stores who prefer their brand (Du, 2019).
The congruence or deviation from what we wanted and what we got
We wanted to get a revenue boost and more traffic in our stores and we have formed
our factors in the negotiations by that measure. For that, we had to increase our profit margin
was 2.25 dollars per unit. We can increase it to 2.30 dollars for our sales and new product

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launch. However, we have to reduce 5% from it so that Sydney can include that charge in the
units they sell to us. We also have to spend 2 cents per unit more for the advertising and 3
cents per unit more for the agreed minimum order quantity. So we did not get the revenue
boost as we wanted. But due to the agreed terms, we have the opportunity to achieve the
boost by the end of a year (Johnston & Cortez, 2018).
Why you think the other party agreed
Sydney Shirts agreed to our terms mainly because in exchange for shorter turnaround
time they have managed to increase the minimum order quantity which will cut their
distribution cost and earn them more revenue. In terms of B2B marketing strategy, they also
want to maintain the relationship and commitment intact which will increase their reputation
and drive more customers to our store for their products (Korhonen, 2018). Moreover, they
had us agree to a binding agreement of 6 months which means within this period it will
ensure orders from us.
Conclusion
The assignment above has been a brief discussion about a current negotiation taken
place between our company Nueva Retailers and one of our suppliers Sydney Shirts. The
segments include factors brought up and agreed from both sides. The decisions made are also
justified in the content in terms of the benefit of our firms (Jianu, 2016). The explanations are
given also involve B2B marketing concepts which can justify the decisions made from our
behalf. The final segment provides an insight into the reasons due to which Sydney Shirts has
agreed to our terms. The explanation includes quantitative evidence in terms of benefits and
losses for our store (Siemieniako & Gębarowski, 2017).

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Appendix
An estimate of overall benefit/loss to our firm
Buying volume from Sydney Shirts 270,000 units
Sydney Shirts’ percentage of our sales
volume of shirts
5%
Current net margin per unit $2.25
Sydney’s contribution to our profits 8%
Cost of switching to other suppliers $10,000
Extra cost for agreed minimum order quantity 3 cents
Extra cost for agreed cooperative advertising 2 cents
Sydney’s attempt to reduce net margin 5%
Modified net margin based on current digit
(per unit)
$2.14
Our attempt to new profit margin (per unit) $2.30
Modified net margin based on attempted
margin (per unit)
$2.19

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