Introduction of negotiation
Negotiation is a negotiation process where two parties work together to reach an
agreement on mutually agreed terms to acquire each other's wants. For examples:
Customer trying to negotiate with buyer over a price of a product.
Negotiation for salary between employee & employer.
DEFINITIONS OF NEGOTIATION
In the words of Bill Scott,
“A negotiation is a form of meeting between two parties: OUR PARTIES &
OTHER PARTIES".
According to J.A. Wall,
"Negotiation is a process in which two or more parties exchange goods or services
and attempt to agree on the exchange rate for them.”
Winston's Advanced Dictionary,
“The discussions & bargaining that goes on between parties before a contract is
settled or deal is agreed upon.”
NATURE OF A NEGOTIATION
It requires involvement of two parties,
Requires flexibility.
A process not an event.
Needs effective communication.
Continuous process (i.e. between buyer & seller, employer & employee for
wages, working hours etc.)
Win-win situation for parties involved.
P'S OF NEGOTIATION
Like P's of Marketing, essentials of negotiation are called as P's of negotiation.
They are as follows:
Purpose: aim is required otherwise it will result in wastage of money,
manpower & time.
Plan: main agenda on which negotiation is to be carried on.
Pace: main points should be covered in discussions; also proper breaks must
be introduced to maintain interest of peoples involved.
Personalities: negotiator initiating negotiation must have convincing power,
effective communication skills can influence people & process of
negotiation.
FACTORS AFFECTING NEGOTIATION
PLACE: Familiarity with surrounding helps in boosting confidence.
TIME: Time should be adequate for smooth exchange of ideas & securing
agreement before it is too late.
ATTITUDE: Attitude of both parties should be positive, i. e, willingness to
make an agreement or deal.
SUBJECTIVE FACTORS: Like relation of two parties involved, status
difference, information & expertise.
BASIC NEGOTIATION PROCESS
OFFER
AGREEMENT
COUNTER OFFER
COMPROMISE
CONCESSION
OFFER: First proposal made by one party to another in the negotiation
stage.
COUNTER OFFER: Offer made by second party to first party, or proposing
their offer against first party offer.
CONCESSION: Increase or decrease made in the offer or change in the idea.
COMPROMISE: Sacrifice made by both or one party.
AGREEMENT: Point where both parties agrees, which is beneficial to both.
THE RESULT OF A NEGOTIATION
Loss/Loss: Take the cake away so that neither party gets it.
Win/Lose: Give it to one party or cut it unevenly.
Draw: Cut the cake down the middle.
Win/Win: Make two cakes which are of a much larger size than the present
size
Guidelines for Successful Negotiations
Positive attitude
Narrow down to few points of dispute /conflict
Step By step approach
Find out the other parties state of mind/culture/background /likes & dislikes
Hide your desire
Think before you speak
Know your market information
Bring your own expert
