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Hi people!

I find this extract somehow contradictory and would really appreciate it if you could explain the difference between these two terms in the following context:

Daewoo developed a new approach to selling:
1. They did not use dealers to sell their cars. By saving the money normally paid to dealers, Daewoo was able to offer higher specifications at a lower price.
2 Daewoo designed its car showrooms to be like high street stores,
with free access to product information and a free café; salespeople were on a fixed salary and no negotiating on price was allowed.

My questions:

1. If they didn't use "dealers" to sell their cars, what are they referring to when they mention "salespeople"?

2. When it says "no negotiating on price was allowed", does it mean that clients were not allowed to negotiate the price of the cars or that salespeople were not allowed to negotiate the price with the clients?

Thanks a lot!

Mara.
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Hi Mara,

Regarding question (1), it is a common practice that a car manufacturer would deliver new cars to a car dealer , and the car dealer would hire sales men in order to sell these cars to public. So, the car dealer gets commission from the manufacturer for each car sold. In your example, the Daewoo didn't deal with a car dealer, rather it designed its own showroom and hired sales people to sell cars.Since Daewoo avoids the commission to dealers, it supplies cars at a lower price.
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Hi,

Daewoo developed a new approach to selling:

1. They did not use dealers to sell their cars. By saving the money normally paid to dealers, Daewoo was able to offer higher specifications at a lower price.
2 Daewoo designed its car showrooms to be like high street stores,
with free access to product information and a free café; salespeople were on a fixed salary and no negotiating on price was allowed.

My questions:

1. If they didn't use "dealers" to sell their cars, what are they referring to when they mention "salespeople"? A good question, and I don't have a good answer. I guess the point at issue is the definition of a car dealer. I don't know the details, but ... They are independent businessmen, yet they have close ties, especially financial, to the manufacturer. For example, a dealer usually sells only one manufacturer's cars. A dealer also offers quite a range of services, including such things as after-sales maintenance and used cars. Daewoo seems to have had some simpler arrangement.

2. When it says "no negotiating on price was allowed", does it mean that clients were not allowed to negotiate the price of the cars or that salespeople were not allowed to negotiate the price with the clients? Both, I think. ie the price of the cars was fixed.


Best wishes, Clive