The Kim Guitar Company (KGC) in Seoul, South Korea, makes electric guitars for Japanese manufacturers and distributors in Europe and the US.

A major US distributor, Ashbury Guitars, has contacted KGC about marketing a range of guitars under its own brand name for the Californian market. Ashbury Guitars is a well-established company with an up-market image. It has had no previous dealings with KGC. Ashbury’s owner, Richard Grant, plans to put three models on the market: the Ashbury SG1000 ( the most expensive model), the SG500 and the SG200.the body of the guitars will have an experimental shape as well as advanced technical features.

It is now early January. KGC has agreed to manufacture the guitars for Ashbury, even though it is a very busy time of the year for them. The two companies have had some initial correspondence by e-mail and now a face-to-face meeting is required.

Several points of the contract need to be negotiated. KGC’S owner, David Kim, has flown to San Francisco to meet Richard Grant. At the meeting, the Marketing Director of each company will be present. The purpose of the meeting is to make a deal acceptable to both sides, and which could be the basis for a long-term relationship.

Information file: KGC

Models we can supply three models in the first year: Ashbury SG1000, SG500, and SG200. The SG1000 will be costly to produce because it has advanced technical features.

Quality To reduce costs of production, we want 40% of the order to be manufactured other Korean firms.

Quantity we want Ashbury Guitars to place a first other of at least 2,000 guitars. We need a large order to cover the costs of setting up the production lines. Try to persuade Ashbury to buy a large number of the SG1000 model because your profit margin on this guitar high.

List price (US$) Estimated Prices quoted of production to Ashbury

SG1000 510 920SG500 340 550SG200 290 475

Payment By bank transfer, as soon as the goods have been dispatched.Delivery 30 June. If an earlier delivery is required, production costs

will increase by 10% because of overtime payments to workers. Before 30 June, the factory will be fulfilling orders for other customers.

Discounts Your company policy is to offer new customers 3% off list price for a first order, and 5% for second and further orders.

Guarantee we usually offer a guarantee of 5 years.

Information file : Ashbury Guitars

Model we want KGC to supply three model: Ashbury SG1000,SG500 and SG200. The SG1000 has some special additional feature . Quality we want KSG to produce all the guitars in their own factory. If they use other manufacturers for part of the order, the quality of the guitar may not be very good.Quantity we want to place the following first order: Model Quantity SG1000 400 SG500 1,200 SG200 200 We are sure that demand will be good for the SG1000. The cheaper guitars may sell well. However, there is strong competition in the lower price ranges.Price KGC have quoted these price: SG1000 US$ 920 SG500 US$ 550 SG200 US$ 440All prices include transport costs to Pusan, Korea.Payment By bank transfer. We want to pay a deposit of 50% immediately, and the remaining 50% one month after receiving the goods.

Delivery By 1 June. A later date will result in reduced sales. (Music festivals in California in May create demand). Discounts Although this is a first order, we hope to negotiate a discount of at least 6% off the quoted price. If we place other orders in the future, we hope to have a discount of 8%.Guarantee At least three years.

We have a number of strategies to prepare to meet Mr. Richard Grant talks to convince bring electric guitars product to Californian market.

The Kim Guitar Company, established in 1997, is a specialized manufacturer in electric guitars and classic guitars and acoustic guitars and musical instrument parts and accessories. We have been producing several world-famous branded guitars by OEM basis and also selling our brand "Wolf" guitars over the world. Buyers are always welcome to place trial orders on us to try our quality and service to start life long business relationship with us. We provide musical instruments with which will satisfy you with their price and best quality.

Ashbury Musical Instruments is a company dedicated to the design and manufacturing of high quality musical instruments and accessories at affordable prices. Everyone on the Ashbury design team are musicians and know first hand the lack of features and poor build quality often associated with affordable musical instruments. All models are shipped complete with everything you need to begin playing when you open the box.  Every Ashbury product is designed with playability, sound quality and affordability first and foremost.

First of all, we would like to briefly introduce the electric guitar. An electric guitar is a guitar that uses the principle of direct

electromagnetic induction to convert vibrations of its metal strings into electric audio signals. Invented in 1931, the electric guitar became a necessity as jazz musicians sought to amplify their sound. Since then, the electric guitar has become the most important instrument in popular music. It has evolved into a stringed musical instrument that is capable of a multitude of sounds and styles. It served as a major component in the development of rock and roll and countless other genres of music.

Specification of SG1000-Body : Arched Maple top mahogany back  -Neck : Mahogany (set-in Neck)-Fingerboard : Ebony 22F (350R) -Bridge : SGB-IIIG-Pickup : "SGH-1SOB" (Alnico V) x2-Control : Front volume, Front tone (Bi-Sound SW), Rear volume, Rear tone(by Sound SW),3P selector SW -Scale (mm) : 628-Hardware : Gold-Finish : BS(Brown Sunburst) , RS(Red Sunburst) , BL(Black)- High quality Hard Case include(SGFC)

Specification of SG500:Later 1970's model. 2 x HB .. pretty "stock" set up. Maple topped,

decorative headstock + fret markers. Mine is red. Set neck, MIJ. With

original case. "Les Paul" type set-up. Nothing fancy: 2 x PU, 4 x controls. Pretty sure it is maple cap (not sure of base timber) and ebony board.

Specification of SG200:

SG-200 offers a superior combination of electrical and mechanical properties - properties such as dielectric strength, flame resistance, arc and track resistance, high and impact strength. These fiberglass-reinforced polyester thermoset sheets

will not melt under heat and have excellent overall electrical properties.

SG-200 electrical insulating laminates have inherently good dielectrics. SG-200 has been engineered to maximize the specific properties required for a electric guitar.

Guitar probably appeared first in Egypt and Babylon from 1000 BC. Through many changes, it is the army of invasion brought to Europe around the 8th century and flourished in the 14th century, particularly in Spain.

California has 478 cities, which are mostly in large urban areas. 68% of California residents live in the two largest metropolitan areas including the Greater Los Angeles and San Francisco Bay area. -As of 2000, the number of California from 5 years of age in English and Spanish at respectively 60.5% and 25.8%-The industry's largest states, including agriculture, aerospace, entertainment, light industry, and tourism-Southern California, one of the most eastern university in the world, there are many good songs that the choir competition in the large conference. Near Los Angeles has many art institutions and film, including the California Institute of the Arts.

So we think electric guitar is a strong demand on this market of Californian, we know upcoming have music festival, with quantity 2,000 guitars we think will not have any problem to sell the stock during the music festival. Hope mutually beneficial with this quantity.

-To reduce costs of production, we want 40% of the order to be manufactured by other Korean firms. About the quality of the guitar, we will quality assurance such agreements; if any problems, we will take responsibility; so his side assured and believe us.

-About transportation costs, we will be all prices include transport costs to Pusan, Korea.

-We know the music festival only starts on the 8 of June, so we will try to delivery before 8th; if he was not satisfied, we will delivery in the first of June with conditions production costs will

increase by 10% because of overtime payments to workers. Sympathy for us because before 30 June, the factory will be fulfilling orders for other customers.

-About price for the SG1000, we couldn’t reduce price for product SG1000 because this model contains to many valuable technical features. However we will create more attractive packaging for the SG1000 that will give it the image of a professional piece of equipment for the most avid of musicians. To be included in the package will be professional guitar accessories, including replacements for

vital parts and accessories. All these will be branded appropriately. We will offer an additional 5% discount on all purchases of the SG1000, and 7% for second and further orders. An agreement is to be ironed out on the optimal... hope Ashbury guitar will satisfied with our method.

-About guarantee, we usually offer a guarantee of 5 years.