Some questions answered in Chapter 14 What is negotiation selling? How does it differ from nonnegotiation selling? What items can be negotiated in selling? What type of planning needs to occur prior to a negotiation meeting? How should a seller set objectives? How can the negotiation session be effectively opened? What role does friendly conversation play? What negotiation strategies and tactics do buyers use? How should negotiators respond? What are the salesperson’s guidelines for offering and requesting concessions?

Think of the last time you were engaged in some kind of negotiation As you think about the negotiation that took place, ask yourself if you were successful in meeting your objectives for the session. Were you successful as a negotiator? Was the other person?

What can be negotiated? Inventory levels the buyer must maintain. From Exhibit 14.1 Inventory levels the buyer must maintain. Inventory levels the seller must keep on hand to be able to restock the buyer quickly. Details about the design of the product or service. How the product will be manufactured. Display allowances for resellers. Advertising allowances and the amount of advertising the seller does. Sales promotion within the channel of distribution. Delivery terms and conditions. Retails and wholesale pricing points for resellers.

Which items reflect your personality and traits on an average day? From Exhibit 14.2 Helpful Inconsistent Gambler Use high pressure Tactful Risk taker Receptive Self-confident Listener Manipulative Planner Seek new approaches Stingy Perfectionist Persistent Easily influenced Factual Competitive Stubborn Think under pressure Practical Enthusiastic Analytical Afraid of conflict Flexible Economical Controlled Tolerate ambiguity Passive Gullible Honest Strong need to be liked Arrogant Endurance Belligerent Impatient Organized

Add 1 point for each green item; subtract 1 point for each red item From Exhibit 14.2 Helpful Inconsistent Receptive Use high pressure Passive Risk taker Gambler Self-confident Listener Manipulative Planner Seek new approaches Factual Perfectionist Persistent Easily influenced Stingy Competitive Stubborn Think under pressure Practical Enthusiastic Analytical Afraid of conflict Flexible Economical Controlled Tolerate ambiguity Tactful Gullible Honest Strong need to be liked Arrogant Endurance Belligerent 19-22: Excellent 15-18: Good 11-14: Fair Impatient Organized

Planning for the negotiation session Choosing the location Making proper time allotment Setting negotiation objectives Choosing and managing the negotiation team Recognizing individual behavior patterns Controlling information

Comparing buyer and seller price positions Exhibit 14.3 SO Buyer’s opening price ST Buyer’s target price SM Buyer’s maximum price $ $ ST Seller’s target price SO Seller’s opening price SM Seller’s minimum price

Will bargaining be harder or easier? Exhibit 14.3 SO Buyer’s opening price ST Buyer’s target price SM Buyer’s maximum price $ $ SM Seller’s minimum price ST Seller’s target price SO Seller’s opening price

Your opening position Assume that you have been invited to a 3rd interview with Camadon next Friday. You know that if Camadon is going to hire someone, the job offer always comes in the 3rd interview. You also know they like to negotiate with their new hires. What will be your target position, opening position and minimum position for your salary? Camadon has also developed positions for your salary. How will you discover these positions before next Friday?

Preparing for negotiation If you were a salesperson preparing for an upcoming negotiation session, who from your firm would you get involved in the planning? Who would you select to be on your team? What criteria would you use?

Preparing for negotiation Assume that you are a member of a student group that is getting ready to negotiate with the student government association. Your group wants to host a job fair and you want to convince the student government group to provide funding. Develop an agenda for this meeting.

Mini-max strategy Using the mini-max strategy for negotiation planning, the negotiator must answer four questions. Which of the following is one of those questions? “What is the most I can offer without getting laughed out of the room?” “What is the maximum I can accept?” “What is the minimum I can ask for and not get laughed out of the room?” “What is the minimum I can give away?” None of the above.

Conflict-handling behavior modes Exhibit 14.5 Assertive Accommodating Collaborating Competing Avoiding Compromising Competing Collaborating Compromising Uncooperative Cooperative Avoiding Accommodating Unassertive

Competing mode Assertive and uncooperative Collaborating Compromising Avoiding Accommodating Assertive and uncooperative Tend to pursue their own goals at the expense of the other party. Like to be surrounded by “yes men.” Look for a win for themselves, a loss for the other person.

Avoiding mode Unassertive and uncooperative Competing Collaborating Compromising Avoiding Accommodating Unassertive and uncooperative Do not attempt to fulfill their own needs or the needs of others. In essence, they refuse to address the conflict. They do not strive for any agreement.

Accommodating mode Unassertive but highly cooperative Competing Collaborating Compromising Avoiding Accommodating Unassertive but highly cooperative Tend to neglect their own goals in order to satisfy the concerns of the other party. They may seek a win-lose agreement where they are the losers! Display excessive generosity and easily yield to another’s point of view.

Compromising mode Competing Collaborating Compromising Avoiding Accommodating These people are “in the middle” in terms of assertiveness and cooperativeness. Attempt to find a quick, mutually agreeable solution that partially satisfies both parties. The agreement reached does not usually maximize the satisfaction of the parties. Will often say “Let’s just split the difference.”

Collaborating mode Assertive and cooperative Competing Collaborating Compromising Avoiding Accommodating Assertive and cooperative They seek to maximize the satisfaction of both parties and reach a truly win-win solution. Collaborators have the motivation, skills, and determination to really dig into an issue or a problem and explore all possible solutions.

Opposites The exact opposite of the competing mode for resolving conflict is the avoiding mode. True False

Thinking it through What if you do everything in your power to establish a win-win attitude with the buyer team, but they insist on viewing the negotiation as a series of win-lose maneuvers? Since they won’t play by win-win rules, should you?

Negotiation strategies Asking for a small add-on or extra concession after the contract has been signed is called: lowballing nibbling browbeating shaving dollars whittling

Has anyone used any of these win-lose negotiation strategies on you? Emotional outbursts Suddenly start crying, gets angry, or looks sad. Lowballing (nibbling) Reaches agreement, then adds additional items. Good guy–bad guy routine One person is very aggressive; then the second person is nice. Budget limitation tactic Calls for you to meet their budget ceiling. Browbeating Attempts to undermine another’s confidence.

Guidelines for making concessions Get the buyer’s demands and opening position first. Always get a concession in return for yours. Concessions should gradually decrease in size. Don’t be afraid to decline to make a concession. All concessions offered are tentative. Be confident and secure in your position.

Guidelines for making concessions Don’t accept the first attempt at a concession. Help the buyer see the value of your concessions. Start the negotiation without preconceived notions. If you realize you made a mistake, say so. Don’t easily agree to “let’s split the difference” offers. Know when to stop. Use silence effectively.

Any questions about the terminology? Accommodating mode Adaptive planning Agenda Ambush negotiating Avoiding mode Brainstorming session Browbeating Budget bogey Budget limitation tactic Collaborating mode Competing mode Compromising mode Concession Emotional outburst tactic Face Good guy-bad guy routine Lowballing Minimum position Negotiation Negotiation jujitsu Nibbling Opening position Sneak attack Target position Win-lose negotiating Win-win negotiating Win-win not yet negotiating