Business Negotiation: Negotiating for Product Supply
Negotiation is very important when multiple agents are involved in any deal. This is because for the parties involved to be satisfied and accept the terms of their operations; the person’s must express themselves and their feeling about that particular thing so as acquire a full knowledge and total rationale of their deal. Hiam and Lewicki (2013) argued that negotiation is the daily give and take of social life and events .The main purpose of negotiating is to ensure that the parties have developed a plan that negotiation objectives than will lead to purchase or supply done in a reasonable and fair price. When negotiating over the prices of products, the buyer may hide their preferences so as to fully persuade the merchant and are able to acquire the products or services that they want. This involves expression of values and attributes with the aim of the strategy being of equal beneficial outcome as Ghauri argued (2005).
The buyer may ask for a product or service and probe for an offer a certain price. The merchant quotes the set price after which the buyer can then expresses their dissastification by rejecting offered price. This then leads to an exchange of offers and countering of the offers in a sequential manner. The merchant will fill the attributes with full values about the products and why they think that their products are the best while persuading the buyer to buy them (Hendon, Hendon and Herbig1996) . On his or her side, the buyers will explain his negative response in a broad and unclear way. The two parties expect that the attribute of the offer to be improved. Negotiating ends when both the buyer and the merchant settle for a particular price or come to an agreement on a particular issue. The two parties agree to work together after settling on a particular price for the delivery and other prices that may arise from the delivery of the goods to the merchant’s premises.
Our firm deals with the supply of wines. As the marketing manager I am supposed to help my sales team to sell our products with ease and make big profits for the firm. In addition, I have been recently tasked with the mandate to contact a merchant who will be importing the product on our behalf and delivering them to our premises. Therefore I have to face the challenge of buying as I do that of selling. I have to prepare and meet the proposed supplier.
The merchant and I have to accept the principles guiding the collaboration in line with the project. The terms integrated for the service delivery and payment as well as the deadline to be met. In this case, this will include terms on importation of the products. After meeting and making our firms plans known to the merchant, we negotiate on prices. So as to precisely agree on the price, the deal involved specification of the features of our intended products as well as striking those that we don’t want in a bid to lower the prices. As part of the price negotiation, I had to prove to the merchant that my firm is an accountable buyer and always pay on time and he as a seller had a responsibility to acknowledge the value of impact to the customer so as to gain credibility.
We developed documentation for that purpose and the results of the negotiation. This documents further to address the extent to which we achieved the negotiation objectives where achieved. At times, it is important that parties draw a written contract on all arguments that have been agreed upon and any deal has been settled upon. This is because although an oral deal is reliable, it cannot be relied upon in a court of law. However, the parties should agree on what the contract will cover ranging from the price, delivery schedule, terms of payment, a clause detailing the suppliers ownership of goods until they paid for and one taking into account purchasers statutory rights and seller’s contractual liability. This is important as it protects the parties’ interests and shifted the legal responsibility in case problems arise (Freund 1975). .
In addition, the parties demonstrate their commitment through their action, a willingness to make the collaboration succeed which may be signing of document and taking legal action as proof of such a contract. In addition, it was important as a sign of dedication to the agreement and sign of sharing a common vision, values, and understanding of the scope of our individual obligations under the agreement; and integration initiatives will be delivered in a secure environment with acceptable levels of privacy and confidentiality protection. Each of us as a party has a duty to respect and binds to the obligation of the other.
Due to the fact that we were ordering goods in bulk, my firm expected that the merchant will supply the goods at discount. In addition, the supplier must accept to train our team as part of the deal. The reason as to negotiation priority is profitability for our firm from selling the supplies we get from the merchant. Therefore training on dealing with these products is vital for our young firm.
Commencement and operation on the supplies was to begin in a period of the next three days. This was after binding ourselves to the condition of the agreement; the supplier delivers wine to the merchant. Negotiations covered the after-sale services we required as the customer. Bearing in mind that the products we were dealing are highly sensitive thus making this business risky, it is important that we negotiate what will happen if problems arise at the time of delivery. Will the supplier replace the faulty or the whole batch and if so within what time should he do that. What are the penalties incase the supplier fails to meet the delivery schedules, the quality of the specified goods and other agreement but such as the future discounts.
A dispute resolution to consider incase a dispute arose between us was settled and included dispute resolution or exit procedures that must be followed if either party is dissatisfied with the relationship or wants to end the contract. This for our case will entail a prior three months notice in writing.
However before signing the contract, we agree to first carry out a due diligence test to check if each one of us was able to fulfill the agreement. As the buyer, we were to analyze the credit check of our supplier so as to be able to check their potentiality in delivering what you want, when the we needed it. This is important in avoiding future frustration of inconsistent supply.
However, we settled on proposed special provisions for any deviations to regulations and the required approvals. This included delayed shipments but was confirmed to a period of 24 hours in which the distributor would inform us two days before the delivery date.
As part of the post-negotiation, our firm will evaluate the impacts of the bargaining tactics used and assess the pre-negotiation preparation. The negotiation outcome was for our team, a big win. Though some careful preparation, management, and fortune we were able to get a better deal than what we hoped for at the start. Rather than have an exclusive deal with our supplier, we were given the opportunity to control the distribution of wine distribution in the whole country.
Moreover, training sessions were offered to our members on how to maximize business opportunities and winning a bigger clientele as well customer maintenance and relations. Our members learned a lot along the way which added value to each one of us.
With the business world changing today, the best way to deal with those changes is through negotiations as this will always gear the business towards achieving its set goals and objectives. Negotiation in a business exists between the client and the supplier as well within the firm. It will also take place with co-workers, management like when negotiating for a salary increment and in other situations. It plays a key role in the flow of goods and services to and from the business to the customer and its therefore vital for making profit which is the main purpose of many businesses.
Freund, J. C. (1975). Anatomy of a merger: Strategies and techniques for negotiating corporate acquisitions. New York: Law Journal Press.
Ghauri, P. N. (2005). International business negotiations. Amsterdam [u.a.: Pergamon.cquisitions. New York: Law Journal Press.
Hendon, D. W., Hendon, R. A., & Herbig, P. A. (1996). Cross cultural business negotiations. Westport, Conn. [u.a.: Quorum Books.
Hiam, A., & Lewicki, R. J. (2013). Mastering business negotiation: A working guide to making deals and resolving conflict. San Francisco, Calif: Jossey-Bass.