Chapter 14 Topics

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Chapter 14 Topics

• What is negotiation selling? How does it differ
  from non-negotiation selling?
• What items can be negotiated?
• 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 salespersons guidelines for
  offering and requesting concessions?

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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?

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What can be negotiated?
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.

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Which items reflect your personality and traits
on an average day?
From Exhibit 14.2
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Add 1 point for each green itemSubtract 1 point
for each red item
From Exhibit 14.2
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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

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Comparing Buyer andSeller Price Positions
Exhibit 14.3
SM Buyers Opening Price
SM Buyers Target Price
SM Buyers Maximum Price


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Will bargaining be harder or easier?
Exhibit 14.3
SM Buyers Opening Price
SM Buyers Target Price
SM Buyers Maximum Price


SO Sellers Opening Price
ST Sellers Target Price
SM Sellers Minimum Price
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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?

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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
government group to provide funding. Develop an
agenda for this meeting.
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Conflict-Handling Behavior Modes
Assertive
Exhibit 14.5
Collaborating
Competing
Competing
Collaborating
Compromising
Cooperative
Uncooperative
Accommodating
Avoiding
Avoiding
Accommodating
Unassertive
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Competing Mode
Collaborating
Competing
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.

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Avoiding Mode
Collaborating
Competing
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.

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Accommodating Mode
Collaborating
Competing
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
  anothers point of view.

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Compromising Mode
Collaborating
Competing
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 Lets just split the difference.

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Collaborating Mode
Collaborating
Competing
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.

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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 wont
play by win-win rules, should you?
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Has anyone used any of these win-lose
negotiation strategies on you?

• Good guybad guy routine
• One person is very aggressive then the second
  person is nice.

• Lowballing (nibbling)
• Reaches agreement, then adds additional items.
• Emotional outbursts
• Suddenly start crying, gets angry, or looks sad.
• Budget limitation tactic
• Calls for you to meet their budget ceiling.
• Browbeating
• Attempts to undermine anothers confidence.

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Guidelines for Making Concessions

• Get the buyers demands and opening position
  first.
• Always get a concession in return for yours.
• Concessions should gradually decrease in size.
• Dont be afraid to decline to make a concession.
• All concessions offered are tentative.
• Be confident and secure in your position.

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Guidelines for Making Concessions

• Dont 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.
• Dont easily agree to lets split the
  difference offers.
• Know when to stop.
• Use silence effectively.

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Any questions about the terminology?

• Accommodating mode
• Adaptive planning
• Agenda
• Ambush negotiating
• Avoiding mode
• Brainstorming session
• Browbeating
• Budgetary bogey
• Budget limitation tactic
• Collaborating mode
• Compromising mode
• Concession
• Emotional outburst tactic

• Face
• Good guy-bad guy routine
• Lowballing
• Mini-max strategy
• Minimum position
• Negotiation
• Negotiation jujitsu
• Nibbling
• Opening position
• Sneak attack
• Target position
• Win-lose negotiating
• Win-win negotiating
• Win-win not yet negotiating

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