System and Tactics of Distributive Bargaining

0
0
2152 days ago, 834 views
PowerPoint PPT Presentation
Distributive Bargaining: Slicing the Piealso known as focused, antagonistic, or win-lose bargainingthe objectives of one gathering are more often than not in essential and direct clash with the objectives of alternate partyresources are settled

Presentation Transcript

Slide 1

Procedure and Tactics of Distributive Bargaining

Slide 2

Distributive Bargaining: Slicing the Pie otherwise called aggressive, antagonistic, or win-lose bartering the objectives of one gathering are generally in principal and direct clash with the objectives of the other party assets are settled & constrained, and both sides need to boost their share of the assets

Slide 3

one gathering tries to offer data to the next gathering just when it gives a vital preferred standpoint transaction control relies on upon the data one can accumulate about the other party arranging parties concentrate much on their disparities that they overlook what they have in like manner

Slide 4

Basic Concepts Target Point – the time when an arbitrator might want to finish up arrangements; his ideal objective or desire Buyer's Target Point (BT) – the ideal (most reduced) value purchasers might want to pay Seller's Target Point (ST) – the ideal (most noteworthy) value venders might want to set

Slide 5

Resistance (or Reservation) Point – the moderator's primary concern Buyer's Resistance Point (BR) –the most noteworthy value purchasers will pay Seller's Resistance Point (SR) – the least value dealers will set

Slide 6

Asking Price – the underlying value set by the merchant; dealer's opening offered Initial Offer – the main value that the purchaser will quote to the merchant; purchaser's opening offered Settlement Point – the value that both purchaser and vender will concur upon

Slide 7

Bargaining Range – the spread between the resistance focuses; a.k.a. settlement range or zone of potential understanding Bargaining Range Absolute Value – the distinction between the purchaser's & vender's resistance focuses

Slide 8

Positive Bargaining Zone Buyer's Bargaining Range Seller's Bargaining Range Seller's Target Point (ST) Buyer's Resistance Point (BR) Seller's Resistance Point (SR) Buyer's Target Point (BT) Positive Bargaining Range – when the purchaser's resistance point is over the seller's; transaction is conceivable

Slide 9

Negative Bargaining Zone Buyer's Bargaining Range Seller's Bargaining Range Seller's Target Point (ST) Seller's Resistance Point (SR) Buyer's Resistance Point (BR) Buyer's Target Point (BT) Negative Bargaining Range – when the merchant's resistance point is over the buyer's; arrangement is outlandish

Slide 10

Seller's Surplus Buyer's Surplus Buyer's Bargaining Range Seller's Bargaining Range BT SR Settlement Point BR ST Negotiator's Surplus – the positive contrast between the settlement point and the moderator's resistance point

Slide 11

Illustrative Case: Larry and Monica Larry needed to draw nearer to where he works. After some time, he found a house that met his prerequisites. The vender, Monica, set the asking cost at $145,000, which was $10,000 above what Larry planned to pay however $5,000 beneath the most he would pay. Larry realized that the more he paid for the house, the less he would have the capacity to make some exceptionally alluring adjustments, purchase draperies and some new furniture, and contract a moving organization.

Slide 12

Monica as of now had alluring window hangings in the house. She was moving to another house; on the off chance that she couldn't utilize the window hangings in the new house, Larry may have the capacity to buy them or request that Monica incorporate them with the deal. The same may be valid for a few floor coverings, corridor tables and different things. Note: Assume assist that the vender's resistance point is 20% beneath the asking cost

Slide 13

Identify the accompanying components: Larry's objective point Larry's resistance point Monica's asking value Monica's resistance point Bargaining range Bargaining range outright esteem Settlement point (merchant's surplus is 65%) Settlement point (purchaser's surplus is 90%)

Slide 14

Answers: Larry's objective point: $135,000 Monica's asking value, $145,000, was $10,000 above what Larry would have liked to pay: $145,000 - $10,000 = $135,000 2. Larry's resistance point: $150,000 Monica's asking value, $145,000, was $5,000 underneath the most Larry would pay: $145,000 + $5,000 = $150,000

Slide 15

3. Monica's asking value: $145,000 Monica's asking cost was at that point unequivocally expressed for the situation 4. Monica's resistance point: $116,000 The dealer's resistance indicate was accepted be 20% beneath the merchant's asking cost: ($145,000)(0.20) = $29,000 $145,000 - $29,000 = $116,000

Slide 16

5. Dealing range: $116,000 - $150,000 This is essentially the spread between the purchaser's and vender's resistance focuses 6. Haggling range supreme esteem: $34,000 The contrast between the purchaser's & dealer's resistance focuses: $150,000 - $116,000 = $34,000

Slide 17

7. Settlement point (if the vender's surplus is 65%): $138,100 The distinction between the purchaser's & dealer's resistance focuses (haggling range outright esteem): $150,000 - $116,000 = $34,000 Seller's surplus is 65% of the bartering range supreme esteem: ($34,000)(0.65) = $22,100 Settlement point (SR + merchant's overflow): $116,000 + $22,100 = $138,100

Slide 18

Seller's Surplus (65%) Buyer's Surplus Buyer's Bargaining Range Seller's Bargaining Range $22,100 BT SR Settlement Point BR ST $116,000 $138,100 $150,000 $34,000

Slide 19

8. Settlement point (if the purchaser's surplus is 90%): $119,400 The contrast between the purchaser's & vender's resistance focuses (dealing range total esteem): $150,000 - $116,000 = $34,000 Buyer's surplus is 90% of the bartering range outright esteem: ($34,000)(0.90) = $30,600 Settlement point (BR - purchaser's overflow): $150,000 - $30,600 = $119,400

Slide 20

Buyer's Surplus (90%) Seller's Surplus Buyer's Bargaining Range Seller's Bargaining Range $30,600 BT SR Settlement Point BR ST $116,000 $119,400 $150,000 $34,000

Slide 21

Fundamental Strategies: I. Push for a settlement near the other party's resistance point II. Impact the other party to change its resistance point III. Change over a negative settlement go into a positive settlement extend IV. Persuade the other party that your proposed settlement point is the most ideal arrangement BOTTOMLINE: find and impact the other party's resistance point

Slide 22

Positions Taken During Negotiation: Opening Offer Opening Stance Initial & Subsequent Concessions Final Offer

Slide 23

Guidelines for Making Concessions: Give yourself enough space to make concessions. Attempt to get the other party to begin uncovering their needs and goals first. Be the first to surrender on a minor issue yet not the first to yield on a noteworthy issue. Make immaterial concessions and depict them as more profitable than they may be.

Slide 24

Make the other party buckle down for each concession you make. Utilize exchange offs to acquire something for each concession you make. By and large, surrender gradually and give a little with every concession. Try not to uncover your due date to the next gathering. Periodically say "no" to the next moderator.

Slide 25

Be cautious attempting to reclaim concessions even in "provisional" transactions. Keep a record of concessions made in the arrangement to attempt to distinguish an example. Try not to yield "over and over again, too early, or excessively."

Slide 26

Establishing a Commitment: Public Pronouncement Linking with an Outside Base Increase the Prominence of Demands Reinforce the Threat or Promise

Slide 27

Closing the Deal: Provide Alternatives Assume the Close Split the Difference Exploding Offers Sweeteners

Slide 28

Hardball Tactics – intended to weight moderators to do things they would not generally do; work best against ineffectively arranged arbitrators Dealing with Hardball Tactics: Ignore Them Discuss Them Respond in Kind Co-pick the Other Party

Slide 29

Typical Hardball Tactics: Good Cop/Bad Cop Lowball/Highball Bogey The Nibble Chicken Intimidation Aggressive Behavior Snow Job

SPONSORS