MKT 370 - Chapter 12

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Nibbling

A variation of lowballing, is a small extra add-on that a buyer requests from a seller after a deal has been closed in a negotiation meeting

Traits of poor negotatiors

Inconsistent
High pressure
Manipulative
Arrogant
Impatient
Perfectionist
Stubborn
Gambler
Easily influenced
Stingy
Passive
Gullible
Afraid of conflict
Strong need to be liked
Belligerent

adaptive planning

As part of planning strategies for negotiations with buyers, firms develop alternative paths to the same goal. This method is known as

Win-Lose Negotation

a negotiator tries to win all of the important concessions and triumph over an opponent

Win-Win Negotation

a negotiator tries to secure an agreement that satisfies both the negotiator and the opponent

Concession

When one party in a negotiation meeting agrees to change a position in some fashion

Competing

Based on this negotiation profile, people who resolve conflict in this mode tend to be assertive and uncooperative

Accomodating

Based on this negotiation profile, people who resolve conflict in this mode tend to be unassertive and highly cooperative

Avoiding

Based on this negotiation profile, people who do not attempt to fulfill their own needs or the needs of others, or simply refuse to address conflict at all. These people do not strive for a win-win, they do not strive for any agreement at all.

Compromising

Based on this negotiation profile, these people tend to be "in the middle" in terms of cooperativeness and assertiveness. Attempts to find a quick, mutually acceptable solution

Collaborating

Based on this negotiation profile, these people tend to be both assertive and cooperative. They seek to maximize the satisfaction of both parties to reach a win-win solution

Steps in planning for the negotation

1. Select a location
2. Allow adequate time
3. Set negotiation objectives
4. Select team and management
5. Understand Individual behavior patterns
6. Information control

Step 1 in planning for the negotiation

Selecting a Location

Things to consider when selecting a location for negotiatoins

Look for a neutral site, free of distractions for both teams, no "home court" advantage
Now starting to move to online platforms - but can have impact on behaviors

Step 2 in planning for the negotation

Allowing adequate time

Things to consider when deciding how much time to allow for a negotiation

Be aware that some business negotiations can take years. This will depend on the extent to which both sides desire a win-win session. High time pressures will produce non-agreements and poor outcomes when one or more sides take a win-lose perspective.

Step 3 in planning for the negotation

Setting negotiation objectives

Things to consider when setting negotiation objectives

Differences in target positions, minimum positions and opening positions

Target Positions

Negotiation objective that states what the team hopes to achieve by the time the session is completed

Minimum Position

Negotiation objective that states the absolute minimum level the team is willing to accept.

Opening Position

The initial proposal of a negotiating session, should be higher than your target position. Must be ready to support with solid information

Adaptive planning

the development of alternative paths to the same goal in a negotiation session

Brainstorming session

Meeting in which people are allowed to creatively explore various methods of achieving goals

Examples of adaptive planning

Will accept longer shipping time in return for 5% price discount or,
Will accept longer shipping time in return for credit terms of 3/10, n/30 or,
Will accept longer shipping time in return for a 50-50 co-op ad campaign
(multiple paths to reach same goal)

Ambush negotiating

A win-lose tactic used by a buyer at the beginning of, or prior to, negotiations when the seller does not expect this approach. Also called sneak attack.

Sneak Attack

another name for ambush negotiating

Negotiation preliminaries

- Engaging in friendly conversation to break the ice
- Learn names and positions of opposing team members
- Make an effort to ensure a comfortable environment for all parties
- Be aware of different customs from different cultures (Japanese prefer to deve

Setting an agenda

Discussing what will be discussed and in what order. Each team should set their own preliminary, but it will be the first thing negotiated.

Lowballing

Negotiation strategy in which one party voices agreement and then raises the cost of that agreement in some way.

Budget limitation tactic

negotiation strategy in which one side claims that the budget does not allow for the solution proposed

budget bogey

another name for the budget limitation tactic

Emotional outburst tactic

negotiation strategy in which one party attempts to gain concessions by resorting to a display of strong emotion

Browbeating

negotiation strategy in which buyers attempt to alter the selling team's enthusiasm and self-respect by making unflattering comments

negotiation jujitsu

negotiation response in which the attacked person or team steps away from the opponent's attack and then directs the opponent back to the issues being discussed

Red Herring

Win-Lose tactic: A minor point brought up to distract the other side from the main issue being negotiated.

Trial Balloon

Win-Lose tactic: An idea floated without being actually offered.

win-win not yet negotiating

A negotiation session in which the buying team achieves its goals while the selling team does not. However, the sellers expect to achieve their goals in the near future, thanks to the results of that negotiation session.

Force Majeure Clause

Will shield the selling company from impacts of events beyond their control, such as acts fo God (fires, explosions, earthquakes, drought, tidal waves and floods) wars, rebellions, riots, terrorism and nuclear contamination