Wednesday, December 17, 2014

Case Stady Anchoring , one kind of Business negotiation

Key Point :

Anchoring is a tactics of negotiation which are widely use in selling premium branded automobile products. Seller use anchoring tactics for the customer and using this tactics people are bias to purchase the products , Using anchoring seller also make a big margin and buyer also happy to fill that they are purchase the products with a big deal.

Automobile Manufacture sell their almost brand new cards to the customer, priced 15-20 percent less then the then brand new car which is the implementation of anchoring tactics.

This is a collaborative or interest – base negotiation which are figuring out both parties interest and this is a win- win situation for the both parties. Purchasing a nearly brand new car with 20 percent less, buyer are highly satisfied and felling that this is a great deal, on the other hand supplier are also happy that they make decent margin.

For anchoring the negotiation we have to price the table first , the price is more then the actual value , after some negotiation other party may accept the deal , they are fill better that they get a huge discount and we are pleased we also get our margin.

Analysis:

This is a tactics which make the negotiation easier and can easily make a deal with buyer and supplier

Buyer came to table with a maximum price which are their walk a way points.

Seller came to table with the minimum selling price , this is also the walk a way point for seller.

Both parties are try to negotiate the price and other condition , after they relived to get just enough , they may make the contract.

This is collaborative negotiation , both parties work together to try or find our an outcome which meet the clearly stated need of both parties as far as possible. This facilitates learning , generates more creative options and encourages trust.

Reflection :

This is very relevant to understand the negotiation process, buyer and seller level of satisfaction commitment and conclusion .

This is illustrate the negotiation process of high value premium brand brand new and used but almost brand new automobile.

This is a perfect example of collaborative or interest-based negotiation where customer satisfaction are also important issue.

This is highly integrated procurement procedure where buyer and seller are gain their objectives.

Model form contracts

Model form contracts are published by third party experts incorporating standard practice in contracting for specific purposes within specific industries and ensuring a fair balance of contractual rights and responsibilities for buyer and seller. The most common model form contracts are used in the construction and engineering industries, but other industries - such as logistics and facilities management - are also beginning to develop them. Here are some examples. CIPS has published a range of model form contracts and contract clauses, which members are licensed to use in support of their employment

ADVANTAGES :

Helps reduce time and costs of contract development
Avoids 'reinventing the wheel' - but can be adapted to suit particular circumstances
Industry model forms are widely accepted, reducing negotiation time and costs
Designed to be fair to both parties

DISADVANTAGES :

Terms may not be as advantageous to a powerful buyer as if contract was negotiated
Terms may not include special clauses or requirements to cover the buyer's position
legal advice is still required if significant amendments or variations are to be made
Costs of training buyers to use model forms

Tuesday, December 16, 2014