NEGOTIATION TECHNIQUES

1. NEGOTIATIONTECHNIQUES PART – II ROLE PLAY BY TEJ MAGAZINE

2. NEGOTIATING TECHNIQUES ROLE PLAY •BUYING A POWER GENERATION UNIT ABC & CO. LTD. ARE WELL KNOWN NAME IN MASS SCALE ENGINEERING PRODUCTS MANUFACTURING FOR LAST FIVE YEARS, WITH SUCCESSFUL PROFITABILITY TRACK RECORD. THE CO. HAVE A MODERN AUTOMATED AND TO A LARGE EXTENT COMPUTER CONTROLLED PRODUCTION PROCESS. THE CO. MANUFACTURE PRODUCTS WHICH INCLUDE OEM COMPONENTS TO A WELL KNOWN AUTOMOBILE BRAND AND CUSTOM BUILT COMPONENTS FOR EXPORT MARKET, BESIDES, A FEW OTHER DOMESTIC CUSTOMERS OF REPUTE, BUT, WITH LOW OFF TAKES.

3. PRESENT TURNOVER OF THE CO., ANNUALLY IS RS. 50 CRORES, TO DOUBLE IN NEXT TWO YEARS. 50% OF THE SALES ARE TO AUTOMOBILE CO., ON JIT BASIS, 30% EXPORT & REST OF THE CUSTOMERS ACCOUNT FOR 20% OF TURNOVER. THE ABC & CO. LTD., ARE OPERATING IN A HIGHLY COMPETITIVE ENVIRONMENT, WHEREBY STRICTLY COMMITTED DELIVERIES, COST EFFECTIVE, ZERO DEFECT PRODUCTION IS ABSOLUTELY ESSENTIAL FOR SURVIVAL OF BUSINESS – HENCE. UN-INTERRUPTED PRODUCTION PROCESS ROUND THE CLOCK IS OF ALL MOST IMPORTANCE.

4. THE PLANT IS LOCATED IN A BACKWARD INDUSTRIAL AREAWITHIN 100 KM. DISTANCE OF THE MAJOR CUSTOMER. • OFF LATE, THE GRID POWER POSITION IN THE STATE HAS DETERIORATED , RESULTING IN INTERRUPTION IN PRODUCTION SCHEDULE AND COMMITTED DELIVERIES TO CUSTOMERS GETTING ERRATIC, POWER COST WORKS OUT TO RS. 4.50 PER UNIT, NET. MANAGEMENT OF ABC & CO. LTD., HAVE DECIDED TO BUILT UP 100% BACK UP POWER SYSTEM, WITH IN HOUSE GENERATION. POWER REQUIREMENT WORKED OUT ON 100% USAGE BASIS IS 4 MW.

5. ACCORDING TO ABC & CO. LTD., PREFERENCE IS FOR SYSTEM OPERATING ON HSD OIL OR ALTERNATE FUELS. THE SYSTEM COULD BE A SINGLE UNIT OR A SUITABLE CONFIGURATION UPTO MAX. REQUIRED CAPACITY WITH PROVISION FOR MANDATORY OVERHAULING. OTHER ESSENTIAL TECHNICAL PARAMETERS TO BE CONSIDERED WOULD BE GENERATION & MAINTENANCE COSTS, NOISE & AIR POLLUTION LEVELS, CIVIL, STRUCTURE & MECHANICAL COSTS FOR HOUSING THE STATION , ETC. PRICE, PAYMENT TERMS, EARLIEST DELIVERY, TRANSPORTATION ,ERECTIONS COSTS, PERFORMANCE GUARUNTEES ETC. WOULD BE ESSENTIAL COMMERCIAL FACTORS TO BE TAKEN INTO ACCOUNT.

6. • BUYER TEAM WOULD CONSIST OF :- CHIEF EXECUTIVE OFFICER, PURCHASE MANAGER TECHNICAL MANGER FINANCE MANGER • SELLER TEAM WOULD CONSIST OF :- CHIEF EXECUTIVE OFFICER, MARKETING MANAGER TECHNICAL MANGER, FINANCE MANGER • EACH TEAM MEMBER IN THE BUYER / SELLER TEAMS WILL PALY THEIR RESPECTIVE ROLES SPECIALLY AND ADD VALUE TO THE NEGOTIATING PROCESS. • EACH ROLE PLAY GROUP WOULD HAVE AN OBSERVER, WHO WOULD OBSERVE THE PROCESS & WOULD GIVE INDEPENDENT REPORT.

7. • THE NEGOTIATION WOULD BE IN THREE ROUNDS AS UNDER : ROUND MINUTES ROLE I 15 INCORPORATE ORIGINAL OFFER OF VENDOR & DISCUSS. II 10 EACH ROLE PLAY GROUP WOULD PRESENT SALIENT FEATURES OF OFFER (2 MINUTES PER GROUP) III 10 FIRST NEGOTIATION IV 10 EACH ROLE PLAY GROUP WOULD PRESENT SALIENT FEATURES OF FIRST NEGOTIATION (2 MINUTES PER GROUP)

8. V 10 FINAL NEGOTIATION. VI 5 CONCLUSION VII 15 PRESENTAION BY EACH ROLE PLAY GROUP (3 MINUTES EACH) VIII 10 OBSERVERS REPORTS (2 MINUTES EACH) IX 100 DISCUSSIONS

9. ROLE PLAY…….. PSYCHOLOGICAL TIPS • PEOPLE DO BUSINESS WITH PEOPLE • DO NOT FEAR TO NEGOTIATE • DO NOT NEGOTIATE OUT OF FEAR • DO NOT GIVE UP • DO NOT BANK ON OPPONENT’S WEAKNESS • BANK ON YOUR OWN STRENGTHS • SET YOUR EXPECTATIONS • ASK YOUR PRICE • BE WELL INFORMED • BE EMPOWERED • NEGOTIATE THROUGH CLARITY • BE YOUR NATURAL SELF • ENJOY YOURSELF • ANALYSIS OF BUYER / SELLER POWER IMPORTANT • - IN BUSINESS YOU DON’T GET WHAT YOU DESERVE - YOU GET WHAT YOU NEGOTIATE