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Negotiation

Negotiation The bargaining process through which buyers and sellers resolve areas of conflict and/or arrive at agreements is called negotiation (Weitz, Castleberry and Tanner, 1998). In formal business negotiations, there are several potential areas of negotiation. Businesses usually pay a lot of attention to the four Ps of marketing, which are product, place, promotion and price. Under product category, salespeople and buyers can negotiate on quality, features, style or packaging. Another example is price; price level, discounts, allowances and payment terms. Effective negotiation is when as many interests as possible are met. There are four negotiation strategies that are: Each strategy has a different outcome. The first strategy win-win is whereby both parties are satisfied with the outcome of the negotiation. This process pursues the needs of the parties involved rather than win positions or victories. Win-lose and lose-win strategies are when one party comes out dissatisfied while the other comes out satisfied. As for lose-lose strategy, both parties end up disappointed at the end result of the negotiation (Dwyer, 1999). Among the strategies, salespeople should naturally choose win-win strategy and aim to achieve an outcome that is favourable to both themselves and the buyers. When I was negotiating with my house agent, we were both looking towards the win-win strategy where my housemates and I, as well as her and the house owner were happy with the end results. There are two phases in negotiation, preparation and bargaining. However, when approaching a negotiation, salespeople need to establish the five-step approach to negotiation to ensure successful resolution (Dwyer, 1999), which are: These five steps aid in achieving the desired outcome at the end of the negotiation. Firstly, preparing and planning for negotiation set out exactly what is to be communicated and aims of the parties involved to both parties and direct the negotiation in the preferred direction (Bazzett, 1999). This is considered to be one of the most important steps in the negotiation process. Salespeople should also draw together all the relevant information to the particular matter so that there is a clearer picture of the negotiation. Negotiation planning involves several other factors. Salespeople must identify the desired outcomes and place priority on them. Needs of both parties need to be identified so that there is clear direction to where the negotiation leads to. The second step is to discuss with the buyers regarding the issue at hand without actually going into negotiation mode. Salespeople and buyers should talk about the main issues that are to be negotiated. This aims to establish trust and confidence. This is where friendly conversations to break the ice are a good idea. At the third stage, salespeople and buyers must define the issues involve and stipulate in detail which are the issues that need to be resolved urgently. Negotiating the issue can be started by asking them what they want to achieve and get the competing factions on the same side of the table as well as focussing on a common set of objectives which will help to resolve the conflict (Slyke, 1999). Also, during the negotiation process, generating as many alternatives as possible to the conflict gives both parties leeway to come to a solution. Finally, in conclusion to the negotiation, both parties should ensure that an agreement has been reached and are committed to the agreement and solution. Other than the five-step approach, salespeople should also consider the six steps to problem solving so as to negotiate a successful resolution to this conflict during the negotiation process. Firstly, an appropriate time when salespeople and buyers are in the best of mood and right frame of mind must be chosen. This is because if either of them is not thinking rationally and emotions run high, it will be difficult to hold a negotiation that ends up with a successful resolution (Chambers, 1998). Weitz et. al, 1998 mentioned that experienced negotiators find the middle of the workweek best for negotiations and prefer morning to afternoon or evening as people are more focused on their jobs rather than after hours and weekend activities. For instance, when I was first negotiating with my house agent, Charoen, before renting my current house, she said she prefers to negotiate the terms in the morning because my housemates and I asked if we can do it in the afternoon because neither of us are early risers. The second step is defining needs. They should identify what are the buyers needs by listening to them and encouraging them to share with each other. This is critical because it steers the direction of the negotiation. By knowing what they want to achieve and expect at the end of the negotiation, they can work towards negotiating a winning resolution. Also, negotiators must identify the root of the problem/cause. It is because according to Chambers (1998), successful conflict resolution is impossible without first establishing a clear understanding of the problem. During negotiation, Charoen asked us what we wanted in the house and what was our budget for the entire house. She was thus defining our needs. Brainstorming solution is the third step where all the viable solutions and alternatives are presented and only then the solutions can be evaluated. Both parties can voice out their opinions about the proposed solutions and discuss which is the best answer for them. Choosing the solution(s), which both parties can be committed, should be the fifth step and finally, at the end of the negotiation process, salespeople and buyers can together implement the solution(s). Salespeople can then end the bargaining process and close the deal. Besides the five-step approach and six steps to problem solving in negotiation, there are other points to consider as well ensuring a successful resolution to this conflict. Additionally, when doing the deal and negotiating, it is important to probe for more information so that more details can be received which can help in developing a resolution. The exchange of proposals is also advisable between both parties. Negotiators when bargaining use several tactics. Take for example, they do not make compromise until all information is swapped. My house agent asked us to tell her what we want and need and in turn, she tells us what the offer from the house owner was, the details of the contract, what we need to do as tenants, terms and conditions and etc. After all information is out in the open, she was then ready to make concessions. We asked her if the rent could be reduced to AUD200 per week from AUD210. She said that for AUD210 per week, the house owner could provide a refrigerator since the house is partly furnished and have no refrigerator. So we managed to compromise on this matter where we pay AUD210 per week and an additional feature is added to the house. This leads to another tactic, which is do not give concession without getting a concession. In conclusion, there are several actions that salespeople and buyers can do to negotiate a successful resolution to any negotiation. They have to identify the problem, try solving it by defining, clarifying and analysing the problem. Solutions can then be developed that satisfy both sides and eventually evaluate the results. Win-win strategy would be the best outcome although it could be harder to achieve as compared to the other strategies. Besides the negotiation strategies, negotiators have to employ the five-step approach to negotiation and the six recommended steps to problem solving in the attempt to negotiate a successful resolution to this conflict. They also have to be aware of the tactics used in negotiation process. Bibliography: References Bazzett, D. 1999, ‘Communicating effectively,’ Supervision, [Electronic], vol. 60, no. 12, pp. 3-5, Available: ABI/Inform Global (Proquest Direct) [2000, Oct 21]. Chambers, H.E. 1998, ‘Conflict resolution,’ Executive Excellence, [Electronic], vol. 15, no. 10, pp. 6, Available: ABI/Inform Global (Proquest Direct) [2000, Oct 21]. Dwyer, J. 1999, Communication in Business: Strategies and Skills, Prentice Hall, NSW, Australia. Slyke, E.J.V. 1999, ‘Resolve conflict, boost creativity,’HRMagazine, [Electronic], vol. 44, no. 12, pp. 132-137, Available: ABI/Inform Global (Proquest Direct) [2000, October 21]. Weitz, B.A., Castleberry, S.B., and Tanner, J.F., JR. (1998), ‘Strengthening the Presentation’ in SELLING Building Partnerships, 3rd edition, Irwin/McGraw-Hill, Boston, Massachusetts, pp. 270-297.

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