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batik chase |
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Negotiations Melbourne Business School 11 March 1997 |
Author: Grant Gray Prepared for: Associate Professor John Onto Word limit: 1500 |
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Table of Contents
Outline of the visit to Indonesia
My Objectives
The Process
Examination of the Exchange
Outcome
Appendix A - An explanation of batik tulis
Endnotes
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Outline of the visit to Indonesia |
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During May - June 1995 I travelled around the Indonesian islands of Bali and Java with my partner. The purpose of the visit was to both have an enjoyable holiday and to establish whether we could appreciate living and working in Indonesia. I had completed a mere 8 week course in basic Indonesian before leaving. We backpacked for nearly 7 weeks; deliberately staying in budget hotels, travelling by the infamous public transport system and eating from street stalls, the markets or modest restaurants - seeking as much interaction with the locals as possible. We had decided that if we 'survived' this low-road and still enjoyed the country and its people then we would more than likely be able to enjoy working as a couple of expats.
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 A map showing our travels through Java and Bali. |
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My Objectives |
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Before leaving for Indonesia I set myself a task - to purchase a particular type of batik in
traditional design. [See Appendix A]. I set this task to fulfil four objectives:
I also set several boundaries to ensure these objectives were met:
These boundaries were necessary. It is easy for a Westerner to purchase batik tulis in the fixed-price department stores in Jakarta however I hoped to achieve more than this alone during the entire process of searching, negotiating and purchase 1. |
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The Process |
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Before I left Australia
Before departing for Indonesia I prepared by:
This was our first trip to a less economically developed country and it took time to determine exactly what the normal price was; everything seemed cheap to begin with and nothing appeared to have a harga pas (fixed price).
We soon discovered that price negotiating in Indonesia means haggling. Haggling as outlined by Hendon 3 is a form of price agreement that involves both
Hendon goes as far as to separate the two, calling haggling a social style whereas negotiation is a formal process of reaching agreement. I disagree with this interpretation and would argue that the social aspect to haggling is part of a formal process and not somehow divorced from it - trivial offence can bring it to an end.
Aside from the simple economic needs for both buyer and seller, the Dual Concern model of negotiating suggests that a good result will be most likely achieved if this need of the seller for 'proper' social interaction is also met. This aspect turns haggling into something more complex than is often assumed.
Haggling is characterised by both buyer and seller initially suggesting prices well outside the 'real' range in an effort to confuse. It commonly occurs when a wide variation in final agreed price is possible. It is an interaction between individuals.
We set out to discover what the harga biasa (normal price) was on a whole range of items by the following:
We soon found asking three times the harga biasa seems a common starting point for sellers. Haggling is fast paced with some response expected after each exchange 6. Market sellers use the heat and noise inside the markets to advantage against Westerners who are often left bewildered as to what exactly occurred after a sale.
We also discovered that prices are adjusted according to the how able the seller feels the buyer can afford the goods 7.
This seems entirely fair in a country without a social security system and reflective of a long-standing social contract. Without wanting to be completely ripped-off as this reflected poorly on us, we factored this premium into our offers and did not begrudge the seller their ability to 'assist' their poorer customers.
We decided to not negotiate in multiples of Rp100 (about 6c) on cost-benefit grounds.
Late in the day we visited a group of stalls in the Yogyakarta wet market separate from the batik market known to foreigners.
We approached an elderly woman who had pieces in traditional Yogya style. She welcomed us in and started laying out the dreadful, gaudy sarongs many Westerners find appealing. We quickly indicated our horror and pointed out some traditional designs.
Dale noticed her sarong was of the design I wanted. I asked if she had another. With a cry of "Ya ada!, ada, di sini" (Yes I have!, I have one here) she started rummaging around the far back of the stall and emerged triumphant.
This was obviously of superior quality - the feel and the workmanship marked it apart. We joked about the early offerings, with the seller indicating this pieces' halus (quality) status by placing an imaginary canting (wax pen) to her lips to clear the tip and writing with it. I figured I may need to offer upwards of Rp40,000 ($23). By now a crowd of local women had gathered.
She asked me for a price. I deferred and asked her for one. She replied Rp98,000. It was now drama time. I rolled my eyes and threw my arms up. She looked shocked and offended crying out that it was tulis halus. I shot back "Ya, mahal juga!" (Yes, expensive also!). She nodded, "Ya, ya...discount?".
The discount was Rp2,000. Dale and I burst out laughing. I countered with "Discount? Soto Ayam saja!" (Discount is just enough for chicken soup - a cheap dish sold by street carts). Now it was her turn to burst out laughing, as did her fellow stall holders.
She nodded again and immediately reduced the price by Rp36,000 to Rp60,000.
At this point I was expected to offer a price. I stepped back from the stall and Dale, (playing his part) asked in English what I though it should cost. I turned to face the woman in the next stall and answered Rp35,000 just loud enough to carry. She transferred this to the seller in local Javanese. I saw the seller give a shrug of recognition that I knew the harga biasa and was considering a fair price at the high-end of the range.
We turned to her again and she indicated we resume. We had her!
I offered Rp30,000. She asked Rp45,000, clutching her heart with a cry of "Bankrupt, bankrupt saya" (But you will bankrupt me) . I expressed concern and raised it to Rp33,000. Rp42,000. Rp34,000. Rp40,000. Rp35,000. Rp 40,000. I sucked in through my teeth. Carefully examined the piece again. Shook my head, then said kindly. "Bu, Rp36,000" (Mother, for you Rp36,000). She didn't respond. I thanked her and commenced to leave. She agreed and broke into a smile.
The crowd of women returned to the noisy chatter of the Indonesian markets and the women in the next stall introduced herself, in perfect English, as her daughter! Her son arrived and we ended up spent the next 15 minutes talking to the family about our travels and our own families at home.
On parting the seller sought my hand and expressed her pleasure that the piece was to be enjoyed and treasured in our home. We left floating on air. |
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Examination of the Exchange |
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We arrived to coincide with the time the women pack up their pieces for the day, figuring that they may welcome the chance to sell a relatively expensive piece after a hot and long day. We
chose the traditional wet market rather than the tourist batik market, counting on the 'novelty' of selling to a Westerner for the seller rather than because we felt a better deal could be somehow be had there 8. We chose the oldest seller as we had also found Indonesian elders (as elsewhere) delight in being accorded their correct status. In 5 weeks of travels both Dale and I had refined our 'sucking up' to a point where we often seemed more respectful and old-fashioned than the locals our own age 9. As haggling requires a high degree of interpersonal connection I believe that choosing the particular seller was therefore advantageous despite it meaning our dealing with a very experienced haggler. So too we did not object to paying a little more than the average price. As this is the middle of what both wealthy and poor pay we would be regarded as disrespectful and arrogant if we pushed for a price at the low end 10. This understanding of cultural dynamics took up considerable time and is something I wish to continue to develop. Improvement will guide and smooth the negotiating process in any circumstance. Humour is vital. Most Indonesians delight in good-natured and animated bantering 11. Humour is what keeps the haggling flowing and it is difficult to haggle when you are tired or annoyed 12. Improving my Bahasa Indonesia will allow for a wider range of emotions to be expressed and allow me to inject more humour. We say patience is a virtue. In Indonesia it transcends all else. At a daily income of Rp4,000 a stall-holder can afford to spend a great deal of time selling a piece she will make Rp10,000 on 13. They expect Westerners to be in hurry and use this deadline to squeeze out a better price. We countered this by letting sellers know we would be in town for a few days and that we had 4 weeks of holiday left. We adopted a look of bored disinterest as to whether we bought something today or waited 14. In effect I had removed the two most powerful allies of a seller to tourists - a looming travellers deadline and lack of an alternate. I tested the sellers real price by allowing a 'guess' to be transferred to her without making an offer. Her response indicated I was within range 15. The whole episode highlighted the importance of thorough preparation and a flexible attitude when negotiating. This is turn needs a willingness to experience the unfamiliar and to contemplate what is seen, heard and felt.
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Outcome |
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I was able to fulfill all of my objectives and emerge from the entire episode delighted with both the process and the outcome. The animated negotiating process the Javanese use were quite foreign to me before the trip and I felt uncomfortable with the whole process of haggling. Subsequent visits have proven this is no longer the case. We questioned many Indonesians in the final weeks of our trip and the price settled on was only marginally higher (Rp4000 or A$2.35) than an average local would expect to pay. It was the minimum I could have reasonably expected to pay as both a Westerner and as a traveller unable to keep returning to the seller. The sarong batik tulis itself has been framed and hangs proudly in the dining room as both a reminder of our wonderful trip and of the experience I have gained. |
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Appendix A - An explanation of batik tulis |
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Batik is a colouring process using wax to selectively resist dye on sections of fabric, with wax being progressively added between different dye washes. It was particularly developed into a form of high art in the courts of central Java although the process is common throughout South-East Asia. The finished pieces come in a bewildering range of designs and colours and these in turn often have particular significance culturally. Batik is commonly made in two methods today - batik cap using a stamp to press the wax onto the fabric and batik tulis in which the wax is hand drawn using a canting, a special pen with a reservoir of molten wax in the tip. Batik cap is faster and cheaper to make and can be identified by the regular repeated patterns. It is usually made by men. Batik tulis is distinguished by its irregular repeated patterns and is normally made by women. Of the two batik tulis has much greater status and individual sarong pieces are often commissioned for occasions of importance with the design reflecting the occasion and the participants. Prices vary with the amount of work put into designing and drawing the piece and it is not uncommon for a sarong piece to involve many weeks of work. The women of the Royal Courts of both Solo and Yogyakarta developed batik tulis into an art form of great beauty and cultural significance. Today these two cities are the principle sources of batik sold throughout Indonesia. The traditional colours use a cream background with dark chocolate brown and navy patterning and white highlights.
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Endnotes |
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1 As an Australian, the Indonesian process of negotiation was unfamiliar; despite years of working in the trading department of a global oil company. Australians tend to find price negotiating demeaning for both
buyer and seller and are often uncomfortable. If I work in Indonesia I did not want my first encounter with this process to be at my employers expense. My task would expose me to the process with little risk. 2 approximately $200+. I used this to estimate my maximum exposure as under $100 and therefore of little real risk 3 Hendon et al, Cross-Cultural Negotiations, Quorum Books, Westport CT, 1996 4 When you offer too low a price an Indonesian seller will often simply fold up their goods and return to the back of their store - what a bizarre way to run a business! 5 We found they all have their place. The trick is to discover when and where to use them without causing offense. Many Westerners appear slow learners 6 be it acceptance, a counter offer or a simple exclamation of shock and insult 7 Wealthy Indonesians expect to pay more than the poorer and so too did we, as Indonesians regard all Westerners as wealthy 8 In our experience families work both markets and price information transfers rapidly. 9 For example, we always went to the considerable trouble of unlacing our boots before entering the stalls despite the seller's indication this 'was not necessary for you'. This signalled not only the correct social niceties but also indicated we were able to be patient 10 Mindful of this, on one occasion we moved out of earshot and continued to 'examine' batiks while a stallholder served a woman obviously not well off. On her successful departure we were graciously offered tea by the stall-holder and achieved very reasonable prices. 11 a plus for Australians once they relax 12 Stern faced Westerners who take the process too seriously risk not only a higher price but the seller stopping the negotiation completely. We found the Japanese and Germans would haggle much harder but fail to achieve similar results despite their efforts. We tested being too hard on a few occasions and failed utterly. 13 We further found this daily wage rate a common-sense benchmark. At the initial Rp98,000 one cannot imagine an Australian woman in a market wearing an equivalently priced skirt of $2,000 into work! 14 Figuring we could always reveal our real interest but find it hard to suddenly appear indifferent 15 If she had seemed less than interested I could have simply upped my bid when making the first formal offer
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