“Negotiation is the process of communicating back and forth for the purpose of reaching a joint decision.” “A strategic discussion that resolves an issue in a way that both parties find acceptable. In a negotiation each party tries to persuade the other to agree with his or her point of view.”
Introduction
I wanted to buy new speakers when I moved to Gurgaon. The hostel rules mentioned that we weren’t allowed to play loud music in our rooms as it would disturb others. I discussed this with my roommates and we all decided that I can buy a small speaker which would not have a bass. I just needed a speaker which would be loud enough for the room. I did not want to spend more than Rs. 1500 for the speakers. So, first I searched online for the types of speakers available in the range. I found out a few speakers which were in the range but were not of good brands.
The good brands for speakers are beats, sony, Logitech, iball, etc As per the online sites the rates of speakers of these brands was more than Rs1500. I was thinking of buying the speakers online but I was suggested by a friend to go in the market and check out the quality of the speakers at stores before purchasing. I thought of checking out the electronic store closest to my college which is the e-zone in the Sun City Business Park. There I saw a few speakers which were small in size and were also suitable for small room i.e. were not very loud.
There I checked out various speakers and liked a Sony speaker which was worth Rs. 2200. I knew that it was a lot more expensive than the money available to me for buying speakers so I enquired about discounts. I was told that the maximum discount they could give on a speaker was 10% on M.R.P, which meant that I could have gotten the speakers from that particular store for not less than Rs. 1980. Since, it is a big store and they have fixed price policies all my attempts to negotiate on the price failed and the sales executive told me that he could not give those speakers to me at a price lower than Rs. 1980 as his hands were tied and he wasn’t the one making the decisions on the percentage of discount to be provided on the item.
I checked online for the price of the speaker I liked and was pleasantly surprised to see that Flipkart was offering a 20% discount on the same speaker. I thought this was a great deal and that I should consider buying the speakers for Rs.1760. But I didn’t really want to spend Rs. 260 extra for the speakers. I thought to buy the cheaper one and to not get stuck because the beauty of the expensive speakers. I was going to buy the cheaper speaker available online but before I could order my brother called me up and told me that we could get the speakers I like in the Vyapar Kendra in Gurgaon at a cheaper price. I went to the market- Vyapar Kendra with my brother who took me to a few shops and got me to see more options in case I wanted to change my mind and buy any other type of speaker. But my mind was fixed on the Sony speaker. We went to a few shops but most of them did not have the Sony speaker I wanted available with them.
Then finally I reached a shop which had the sony speaker available and they also had a lot of other speakers too. I first asked the person to show me small speakers and then my brother casually him the price for the sony speakers and the seller said that the speakers were for Rs. 2200 in the market but he could give us a 25% discount and give the speakers at Rs.1650. My brother got really happy that he brought me to a market where he was able to get me speakers at a lower price. So he started to say to the seller to pack up the speakers and give it to us but I stopped him because I really didn’t want to spend anything over Rs.1500 for the speakers.
I then spoke to the seller and told him that I will not be able to pay him more than Rs.1400 for the speakers and that it was not in my budget. He was really shocked that I was trying to bargain over price for Sony speakers on which he was already giving me a 25% discount. I told him that it was not possible for me to pay him Rs. 1650 for the speakers.
He considered for a minute and then told me that its not possible to reduce the price any further as he was already giving me a high discount and that I should not be unreasonable as it would not be feasible for him to give me the speakers for Rs.1400. The seller was a nice person and wasn’t rude to me when I tried negotiating and was still interested in selling me the speaker so I changed my strategy and asked him if he could give me the speaker at a price lower than what he was already quoting.
I also told him that I would recommend his shop to all of my friends if he could quote me a lower price. He thought and told me that he can reduce the price down by another Rs. 100 but not less than that and he also mentioned firmly that if I wanted to buy I should buy at that price only. He asked me not to talk about reducing the price any further. I thought Rs. 1550 was still out of my budget but if I could be a little flexible and consider paying Rs.50 extra I can get the speakers of my choice. I was about to agree to the deal but I noticed that they also sold mobile phone covers. An idea occurred to me so I cleverly told the seller that since Rs. 1550 was also out of my budget it would be great if he could give me a nice mobile cover along with my speakers for that price.
The seller looked at me as if I was a crazy person and then smiled sheepishly and said that he cannot give me any mobile covers which are worth more than Rs.300 each with the speaker after giving me so much discount; but he noticed that the screen guard on my phone was damaged so he said that if I am willing to pay Rs. 1550 then he will change the screen guard for my phone in that amount. I told the seller that I will pay him 1550 if he would change the screen guard for my phone as well as for my brothers.
The seller laughed out loud and told me that I am being very annoying and nagging him too much and taking up too much of his time. I thought that he doesn’t want to agree to my deal so I started to move towards the door of the shop when he stopped me and said that he agrees to my deal and would give me the speakers and the screen guards for Rs. 1550 but he will not give me the screen guards of the expensive range but of the cheaper range. I agreed to the deal as I knew that 2 screen guards even of the cheaper range would cost me another Rs.150. So I finally bought the speakers at my price which was Rs.1500 and was also able to buy two screen guards for Rs. 50
Negotiation Analysis
NEED, INTERESTS, CONCERNS
Need for a speaker for a small room.
Budget Rs.1500
NEGOTIATION STYLE
My approach to the negotiation was deliberate. I took my time visiting stores and viewing speakers. I was sure of what I wanted and how much I wanted to spend on it. I tried to claim as much value as possible but I also tried to create value for him and build on a relationship so that I could achieve better results.
BATNA( Best alternative to negotiated agreement)
My BATNA was to buy the same speakers online for a slightly higher price or to buy some low-brand speakers for a cheaper price. The seller’s BATNA were the other customers who might have been interested in buying the speakers.
ZOPA (Zone of possible agreement)
My ZOPA was around Rs. 1000 to Rs.1500.
The sellers ZOPA was around Rs.1500 to Rs. 2200.
Strategies
I had a fixed budget for buying the speakers. So my reservation price was fixed before I could formulate my strategies to claim maximum value with the budget I had. Firstly, I checked the prices online as I was aware that high discounts were available on a few of the online stores.
Once I had decided which speakers I wanted to buy I looked for them at every type of store to get them at the cheapest price. I couldn’t negotiate at e-zone because they had rigid rules and policies regarding the fixation of the price. I negotiated with the seller in Vyapar Kendra only when I knew that he was interested in making the sale even at a lesser price. I used tactics by asking the seller to reduce the price as my reservation price was Rs. 1400 but my actual reservation price was Rs.1500.
He thought he would reduce the price he was quoting but will not come down to the price I was asking for. He came down to the price closer to my reservation price. Since he stopped negotiating on the price after a while I quickly thought of asking for some other benefits in the price he quoted in order to claim more value in the money I was spending and to not spend more than my reservation price on the speakers. I tried to get the seller to give me a phone cover along with the speakers but that strategy didn’t work.
Outcome
Due to the rigid rules of e zone I couldn’t negotiate with them to lower the price of the speakers. So I had to leave the store empty handed because the price they were quoting was out of my ZOPA. As the interest of the seller to make the was high in the store at vyapar Kendra he was open to negotiations and even though he felt annoyed by my negotiations he still wanted to come to an agreement so that he could complete the sale. In the end he himself suggested creating more value for me to finish the deal quickly.
Conclusion
I was able to purchase the speakers I liked without having to pay the price higher than what I wanted to pay. Although it took some time, I was patient and I kept my cool in order to buy the speakers at the lowest price possible. Negotiation can be long process and in order to reach an agreement a lot of effort has to be put in and strategies have to be implemented. Planning your strategies before beginning the negotiation process is essential to achieve favorable results. Going through the negotiation course and learning about various concepts of negotiation has definitely helped me build my negotiation skills which are needed in every sphere of life.
