Selling & Negotiation Skills

MMS Semester I

Sameer Phanse
Marketing & Information Technology Consultant

CIMR
2010
Session 1
Sameer Phanse
23:12 Marketing & Information Technology Consultant 1
 What's ours is ours….and what's yours
is negotiable!
Soviet outlook toward Negotiations during the Cold War with the West

What's ours is of course ours! What you

say was yours, is rightfully ours,
so,
where is the question of Negotiations?
The Chinese Negotiation attitude – Sameer Phanse (2010)
Sameer Phanse
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 Objectives - Session 1
 Introduction
 TopicImportance
 Evaluation Scheme

 Student Representative

 Negotiation examples – A Quiz

 Why Negotiate?
 Management Students and Negotiation Skills
 The “Skills” in Negotiation Skills
 Why the increasing stress on Negotiations?
 Accomplished Negotiators vis a vis Average Negotiators
 The Conflict Management Grid
 Conflict Continuum and the place of Negotiation
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 Objectives - Session 1
 Negotiation Pre-Conditions
 When not to Negotiate!
 Negotiations – Myths and Truths
 Home Work
 Groups of 5 to 6 students
 Students to read up on a real life Negotiation situation

 Discussion in Session 2 if possible

 Sources of Power
 Negotiations, Mediations and Arbitrations
 Types of Negotiations
 The Negotiator’s Dilemma
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 Term Paper
 Term Paper
 Individual students to research and prepare a Term Paper
 Topic
 The on-going Government of India (GOI) and Research in Motion
(RIM) negotiations
 Provide in brief, all relevant background information about the situation at
hand
 Analyze the implications for all the stakeholders involved
 Develop Negotiation Strategies for
 GOI and
 RIM
 Paper Specifications
 At least 5 to 6 single side typed A4 size page lengths
 Submission
 Through the student representative
 To reach the college office on or before 27th November 2010
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 Introduction
 Introduction
 Topic Importance
 Life-Skill
 Professional Life
 Personal Life
 Ubiquitous mechanism
 Business
 Politics
 Society
 A way of Conflict Management
 Culmination of Sales
 Evaluation Scheme
 Active Class Participation/Interaction – 10%
 Case Study/Term Paper/Project/Quiz/Presentation - 30%
 End Semester Examination - 60%
 Student Representative to report to me for all future co-ordination

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 Negotiation examples – A Quiz

 Negotiation examples – A Quiz

 Which of these situations represents a negotiation?
 Buying a rug in a West African market
 Soliciting a new source of venture capital
 Trying to capture/kill a terrorist in an encounter
 Chatting with someone you do not know on the Internet
 Meeting your potential in-laws for the first time
 Giving or receiving commendation and criticism
 Deciding whether to stay late at work to finish up a project
 Making up, or rebuilding a relationship with someone you love
 Picking a successor for the CEO of a company where you are on the
board
 Getting a child to go to bed
 Getting into a class or training program with limited enrollment
 Laying off or firing someone

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 Negotiation examples – A Quiz

 Discussing the outsourcing of a business function with the manager of the

function
 Soliciting a sponsorship from a major corporate for your College Seminar
 Soliciting bids for the new advertising campaign for your company
 Saying good-by to someone you will not see for a long time
 Finding an advisor, or a mentor, or a counselor
 Discussing with a recruiter the salary and benefits you feel you deserve
 Trying to get back to sleep when something is worrying you
 Getting an extension on a paper or a project
 Apologizing to someone whose property you unknowingly damaged
 Accepting a bribe
 Turning down a bribe
 Getting another country to lower a trade barrier
 Struggling to stay on a diet or exercise plan or give up smoking
 All interactions personal or professional where there
are two or more points of view are Negotiations
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 Power, Negotiation, Persuasion & Force
Outcome NO
possible by
Persuasion? Outcome NO
possible by NO
Outcome
Negotiation? possible by
NO
YES Ethical Outcome
Power? possible &
End
YES justified by
Use Force?
Persuasion YES
Use
Negotiation Use YES
Ethical
Power Use
NO Force
Goal
Achieved? NO
Goal NO
Achieved?
Goal
Achieved? NO
YES Goal
Achieved?
YES
Sameer Phanse YES
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 Management Students and Negotiation Skills
Negotiations

Job Interview Negotiations

Survival
New Job Negotiations Skills
Thrive
Skills
(Within Organization) (External)
e.g.Sales

Career Negotiations

Negotiations
Job/Entrepreneurship

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 Management Students and Negotiation Skills
Other
Employees

Peers
Work
Expectations

Resources

Senior
Management

Subordinates

Boss 2 External
Communities
MANAGEMENT
TRAINEE

Boss’s
Peers Customers

Internal Communities

Boss 1 General
Expectations
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 Negotiations Criticality
 Why the increasing stress on Negotiations?
 Escalating Multidimensionality of Deals
 More Sophisticated Buying Fraternity

 Price focused competitive behaviour

 Customer Lifetime Value Concept

 Internal Negotiations and Boundary Spanner Stresses

 Global trend towards selling “Value and Solutions”, in

contrast to “Price and Product”

 Escalating Competition

 Increasing Cost pressures

 Resource Crunch
 Inflation
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 Negotiations Criticality
 Why the increasing stress on Negotiations?
 Escalating Multidimensionality of Deals
 Price
 Variations
 Schemes
 Offers
 Financing Alternatives
 Products
 Multi Components/Combinations
 E.g. Mobiles
 Allied Services
 Pure Services
 Agreements
 Intricate Service Level Agreements (SLAs)
 Legal Aspects
 Licensing arrangements
 Intellectual Property considerations
 Statutory norms and disclosures
 ….and so on
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 The Talented Negotiator
 Skilled Negotiators
 Consider wider range of outcomes
 More attention to common ground
 Better anticipation of long-term
interest domains
 Decide upper/lower “bounds” for
settlement
 No rigid issue discussion priority
 Use neutral phrases (signals) when
making offers
 Take time to respond to offers
 Position defense is based on few
arguments
 Objectively evaluate past deals for
future learning
Sameer Phanse Marketing & Information
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 Average Negotiators
 Consider narrow range of outcomes
 Lesser attention to common interests
 Poor anticipation of long-term
interest domains
 Decide upper/lower “points” for
settlement
 Rigid issue discussion priority
 Use qualifying phrases (signals) when
making offers
 Make counter-offers instantaneously
 Position defense is based on a
multitude of justifications
 No such review of past negotiation
processes
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 The Conflict Management Grid

Relationship

Accommodation Collaboration

Self-interest

Avoidance Competition

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 The Conflict Continuum

The Coleman Raider Conflict Resolution Continuum

Adapted from Deutsch & Coleman (2000)

If your General Strategy is …

Avoidance Assertion Aggression

..….then the Method you will use …..

Avoid the Negotiate Mediate Arbitrate Litigate Fight or

Conflict Or Wage War
Pursue
Grievance

…. and your Focus will be on …..

Denial or Needs & Rights Power

Escape Interest
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 START Negotiation Pre-Conditions

IS THE ISSUE YES

NEGOTIABLE?

NO MINIMAL YES
MUTUAL TRUST?

WILL TO YES
NO GIVE
Negotiation AND TAKE?

Negotiation NO Negotiation

Negotiation
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 Negotiation – A definition
 The greatest misunderstanding about the
negotiation process is that it is adversarial in nature.
In actuality, it is not designed for those with a trial
and debate mentality. It is a problem solving process
in which each party may look across the table and
regard its counterparts as [potential] advocates.
Colosi

 “……when two individuals exchange messages, an

interaction I refer to as negotiation”. Paul Byers
(1985)

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 Negotiation – A Definition
 Negotiation is a process whereby two or more
persons or groups strive to reach agreement
on issues or courses of action where there is
some degree of difference in interest, goals,
values or beliefs
 The job of the negotiator is
 To build credibility with the "other side,"
 Find some common ground (shared interests),
 Learn the opposing position, and
 Share information that will persuade the "other side" to
agree to an outcome

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 Why Negotiate?
 What is gained through conflict negotiation?
 Crystallizeimportant issues
 Generate superior, more creative solutions
 Reach mutually acceptable agreements that
 Meet your key interests and
 Those of your counterpart(s)
 Strengthen your working relationship with your
counterpart(s)
 Even as you honestly and respectfully negotiate your
differences

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 Why Negotiate?
 Whendisagreements are denied, avoided, or
compromised away, they can:
 Bleed energy from essential activities and issues
 Affect morale
 Polarize groups and individuals and,
 Ultimately, make future cooperation or collaboration
impossible
 Induce careless and undesirable behavior
 Harm or demolish working relationships

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 Negotiate when not to!
 When not to Negotiate
 When time is of essence
 The need for speed may hurt your ability to think clearly and cause you to miscalculate the
result of your concession
 When your Best Alternative to Negotiated Agreement (BATNA) is extremely weak
 When your BATNA is superior to their highest offer

 When Negotiating can send the wrong signal

 When other non-price interests may get compromised

 When negotiating is culturally inadvisable

 When you are in a situation that could cause you severe financial or personal risk

 When the other party asks for something you cannot sustain because it’s illegal

or morally and ethically improper

 When your counterpart seems untrustworthy

 When you’re not all set

 A failure to analyze your positions, issues, and strategies will mar your ability to reach a
favourable result

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 Negotiations – Myths and Truths

 Negotiations – Myths and Truths

 To comprehend how negotiation functions and what
information, skills and abilities are important, one must
first debunk certain misleading notions about
Negotiations
 Which of the following are statements are factual and

which are hearsay?

 Good Negotiators are born
 Experience is a great Teacher
 Good Negotiators take risks
 Good Negotiators make concessions
 Good Negotiators never lie
 Good Negotiators look for common interests
 Everyone is a Good Negotiator
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 Negotiation Merits
 Mutually settled solution (No external party
necessary)
 No intervention/approval of third parties need be
solicited
 The resolution being mutually agreed has greater
chance of being successful
 Since both parties “own” the solution there is greater
commitment from both sides
 An authentic solution is likely since innermost feelings
and emotions are exposed
 By the very nature of the process, any hidden
agendas can get crystallized
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 Negotiation Demerits
 Time Consuming
 Costly
 Requires both parties to be willing to negotiate
 Some parties may be at a disadvantage because
of asymmetries in
 Negotiation Skills
 Information

 Resources

 Authority

 Power

 Influence

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 Sources of Power
 Sources of power wield great negotiation potential
within organisations
 Typical Features of Managerial Power hubs
 Holding formal authority
 Controlling scarce assets

 Possessing information

 Possessing unique proficiency

 Exhibiting the ability to manage ambiguity

 Commanding influential Networks

 Belonging to the prevailing organizational culture

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 Negotiations, Mediations and Arbitrations
Mediation:
Neutral third party helps
participants reach
voluntary agreement

Negotiation: Arbitration:
Voluntary, Non-voluntary,
Participants control Interested parties
the process & have the least control
outcome
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 Types of Negotiations
 Negotiation Types (All in the Mind!)
 Based on
 How the Parties Perceive the Value of the subject of the
Negotiation
 One-dimensional (or few parameters) or Limited definition
 Multi-dimensional interpretation or Expansive definition
 The basic attitude of the involved parties
 Self-Interest
 Relationship Orientation
 Number of
 Parties Involved
 Issues in Focus
 Phases of Interactions

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 Types of Negotiations
 Types
 Based on Value perception and Party attitudes
 Distributive Negotiations
 Integrative Negotiations
 Based on number of Parties, issues and Phases
 Range from One-on-one, single Issue, single sitting to Multi-
party, multi-issue, multi-phase

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 Types of Negotiations
 Distributive Negotiation
 Here the Perception of the Value is
 One-dimensional (or few parameters)
 The basic attitude of the involved parties is
 Self-Interest
A Negotiation characterized by competition over the
allocation of a fixed amount of value
 The aim of the parties is to gain as much as possible at the

expense of the other

 A gain by one side is made at the expense of the other

 Minimum/camouflaged information exchange

 Example
 A Manufacturer – Vendor transaction in which the only
value-proposition is the price of the supplied material
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 Types of Negotiations
 Integrative Negotiation
 Multi-dimensional interpretation of the value in question
 Here the Perception of the Value is spelled out in a
Multi-dimensional manner or an unrestrained way
 Efforts are made by parties to re-interpret the value proposition so as to augment its
worth and utility to all involved parties
 The basic attitude of the involved parties is
 Relationship or Alliance oriented
A Negotiation in which the parties collaborate to optimize gains by integrating
their interests into an agreement
 Sufficient and transparent information sharing

 The aims of the parties are to

 Generate value and
 Gain as much as possible, in a mutually approved way
 Example
 A Manufacturer – Vendor relationship in which the
value-proposition is a set of variables including the price, quality, delivery period,
payment terms and conditions and so on as well as the relationship between the two
firms
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 Types of Negotiations
 One-on-one, Single Issue, Single sitting
 The typical everyday negotiation situation
 The most simplistic, but not necessarily the easiest

negotiation form
 Multi-party, multi-issue, multi-phase
 Professional and Commercial negotiations will usually fall in
this typology
 In Multi-party negotiations,
 The challenges are to
 Anticipate,
 Identify and
 Leverage the natural and situational coalitions that develop
 It is imperative to
 Identify the pivotal decision makers and power centers and
 Initiate a rapport building dialogue with these important entities
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 Types of Negotiations
 The Multiple Sittings
 Need a
 Patient,
 Professional and
 Focused approach
 The flip side is that the early phases can be capitalized to develop
 A working relationship and
 Foster mutual trust
 The Multitude of Issues must be objectively
 Examined,
 Prioritized, and
 Consciously manipulated on the negotiation chess-board to control the
parties and the course of the negotiations
 Game theory based Software Simulations are available to guide
decision makers in complex situations. However decision makers
are loathe to suspend their own judgments for machine based
suggestions
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 Types of Negotiations
 Negotiation Reality
 In real life, few commercial negotiations are strictly
distributive or integrative
 Most are a mix of both, containing opportunities for

collaboration, but coming to a head with vigorous

competition for a share of the worth
 Integrative negotiations are more prominent today

because of
 The realization of the benefits of long-haul business
alliances
 Emergence of Joint Ventures
 Successful business enhancing mechanisms such as
outsourcing
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 Types of Negotiations
 “You have to believe that it’s in your interest to
look for ways to benefit your negotiating
counterpart. Your goal is not to hurt them, but to
help them at a little cost to yourself-and have
them help you at a little cost to them. The more
creative you are at coming up with things that are
good for both of you, the happier both of you will
be.” Michael Gordon, Negotiation
Expert, (1999)

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 The Negotiator’s Dilemma

 The Negotiator’s Dilemma

A Negotiator always has a starting issue
 Should she go in for an aggressive bargaining stance? (
Distributive style) or
 An inclusive, co-operative manner of negotiation?
(Integrative style)
Distributive
Negotiation
Integrative
OR Negotiation

Opp
nt

Self Opponent
one

Self Self
or
Opp

Win
Win // Lose
Lose Lose
Lose // Win
Win Sameer Phanse Win
Win // Win
Win
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 The “Skills” in Negotiation Skills
 The Logical order of Learning
 Knowledge

 Skills
 Techniques

 Other Critical Factors

 Attitude
 Experience

 Negotiation is a vast sea where learning doesn’t end even for the veterans
 This Course will help you to gather basic information about Negotiation and
some of the skills which go with it
 Reflection on the learning and application in actual life are critical to quickly
internalize the teachings
 Its more important to understand the “Why” of Negotiations (or any subject for
that matter) than just the “How to”
 Just learning the gimmicks and tricks of the trade whether Selling or negotiation wont
take you too far
 If you understand the concepts (Why?), you can apply them successfully to almost any

situation
 What worked for someone in a certain situation may not necessarily work for you
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 End of Session 1

Thank You!

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