Along with the Pemberton stores activity we did on Monday, I liked this activity we did on Wednesday. Already split into the buyers and sellers, we did not know what information the opponent knew. We both need to buy/sell something and we were on a mission to get it for the price we wanted. Going into it, we set a price that we didn't want to exceed because it would hurt our company. This, we learned, is called the resistance point, or reservation price. We also had a price in mind that we were going to initially present to the opposite team. This is a big component you need to carefully considered when negotiating with a company or other party. If you set an extreme offer, called anchoring, you may be able to work your opponent to a much higher price then they were originally willing to pay, or vice versa, you may be able to buy for a much lower price than they were originally going to sell for. When I negotiated, I got a good price for what I was looking for, but I think if I would have known in advance how knowing some of these negotiating tactics can really help and affect your outcome, I might have done much better.
The other thing we didn't talk much about in class but that was mentioned in the article "Secrets of Power Negotiating" is the concept of being able to walk away. When going into a negotiation, you need to have the choice in your mind that you can walk away without making a deal. If you can't reach an agreement that you have already set that you need to reach, then walk away without any deal at all. Don't pass the point that you're willing to leave without a commitment. If you do, you'll have already lost.
I think that these tactics we discussed can be very useful in negotiation. You brought up a good point though. There always is the option of walking away from the deal. I think that this is very important to keep in mind considering many of us probably go into these types of situations set on either making a sale or purchase. You always need to be willing to walk away so that you do not go beyond your predetermined limit.
ReplyDeleteI agree with the comment above. All the tactics we discussed can be very useful in negotiating with others. Also, in every negotiation you must not settle for anything less than what you went there to accomplish. Had the other person tried to give me a price lower than $16, i would have walked away because anything less than $16 would be useless.
ReplyDeleteI think in the negotiation process is where my partner and I made a mistake. It is the biggest portion of the buying/selling process and we decided to meet in the middle of their asking price and our buying price. We should have started out with the lowest possible price and then worked our way up. If negotiating does not work out the method you mentioned of walking away would be the best next option. This would help the buyer with "cognitive dissonance" and allow them to feel better about walking away.
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