CASE STUDY : ASHBURY GUITARS

Background

David KIM, the KGC’s owner, and his marketing director mister LEE, have flown to San Francisco to meet Richard Grant , owner of the Us distributorAshbury Guitars, and his marketing director mister SMITH. The topic of this meeting is to sign a contract, and all its features, about manufacturing and shipping of thousand of guitars for the Americanmarket. Naturally, each part wants to get the best deal for his company.

Here, you’ll find the preparation of this meeting, first, on the American side (the buyer’s part), then, on the Korean side (thesupplier’s part). I have chosen to expose to you what each company can accept and cannot accept during the meeting in order to make a good deal.

The buyer’s part

Ashbury can accept theoutsourcing of the SG500 and SG200 production, because it’s a lower quality than the SG1000, which is the most important model.
If the Korean firm want to rise the quantity of the SG 1000 first order, we’llgive or agreement because there is a strong demand on this market, and we won’t have any problem to sell the stock during the music festival. For the same reason, we could accept a higher price forSG1000 model.
In order to reduce the global price, we’d like to make a proposition about the shipping, using our own transport network from Korea to USA.
We’d like to get all the goods on the first ofJune, but if KGC delays the shipping one week, because the music festival only starts on the 8 of June.
The percent off on the first order would be a bonus, we already planned our strategy withoutthis contract close.

However, there are several things we couldn’t accept. For example, if KGC want to outsource the SG1000 production, because this model contains to many valuable technicalfeatures.
About the price, we could not pay more than the quoted prices for SG500 and SG200 models, because there is a strong competition on the American market for these models.
We think it wouldn’t be…