Visit with a salesperson and a buyer (separately) and learn about how they negotiate formal agreements. Find out what things are negotiated, how they plan for an upcoming negotiation meeting, what strategies and tactics they use, and how they gain and give concessions.
Write a four to five page report that summarizes your findings. Include your evaluation of each person’s conflict-handling style (competing, collaborating, compromising, avoiding, or accommodating) as well as your feeling about whether each holds a win-win or win-lose perspective.
Be sure to provide specific examples. It may help to develop a flowchart of a specific negotiation cycle.
For this assignment I chose to visit a local South Asian grocery store, India A-1 Grocery. This store deals in providing groceries that are famous among South Asian clients most of whom are from India, Pakistan and Bangladesh. I visited the store and requested the store owner, Sajid Patel, to allow me to one of his meetings with a supplier. He was kind enough to agree and asked me to come to the store the next day at 11 AM when he has a salesperson visiting him in regards to displaying and selling a new Pakistani spices product line called Shan Masala.
I arrived at the store before 11 AM. The sales person was on time. He introduced himself to be Saeed Khan who was an importer of South Asian food products to the US. He also works as a salesperson to sell these imported products. In the coming discussion I will be focusing on the negotiation style of the buyer, Sajid Patel.
Me, Mr. Patel and Mr. Khan all sat down in the manager’s office at India A-1 store. The negotiation started with a discussion of the different spices product offered by Shan Masala. The salesperson has a catalogue of all the products that has was trying to sell. Mr. Patel had a deep look at the catalogue and put that on the table. Then he started his negotiations with Mr. Khan about the different products, their prices and the profit margins. I made my notes from the discussion and following is a detailed account of the negotiation process from a buyer’s perspective.
- Price of the Spices: Patel seemed to be very interested in the prices. I noticed that he used many tactics in negotiating the price of the price. He argued that he already has these spices with different names from a different supplier and he will not be able to sell Shan Masala products unless he is sure that he can get a bigger margin and there are enough customers to buy the product. He said that he will first try a few products and if there is a success, he will display more of the products by Shan Masala. At the end he agreed on a certain price but he was not lenient in negotiating the price factor and got the price what he wanted. In my opinion we can call it a Win-lose condition on the part of Mr. Patel.
- Location on Shelf: The sales person was interested in placing his product in the shelf in the spices section on waist height. Mr. Patel agreed to put the products on the shelf on desired height. He seemed to be already aware of the shelf position as he said that it is important for a new product line to be visible to the customers as it effects a customer’s purchasing decision to a greater instant. This was a win-win situation as both of the parties seemed happy with the agreement on the shelf position.
- Dispose of unsold merchandize: There was a long talk about what would happen to the products that would remain unsold and reach their expiration date. The salesperson wanted Mr. Patel to share at least some of the costs as he was of the opinion that he does not get reimbursed for any expired products as the companies in Pakistan have wage policies in this regards. At the end the salesperson had to agree to Mr. Patel’s demand. I asked Mr. Khan about how he is going to manage the financial costs. He was confident that he believes that there are enough South Asian and especially Pakistani community is this area and they already know Shan Masala. There would be very little chance that any product would be left in the store to expire.
- The Agreement and upcoming meeting: Patel requested Mr. Khan to visit the store on next Monday to sign a formal agreement and also bring the products that he selected from the list of Shan Masala. He also requested that the agreement should be sent to him in advance via email so that he can have a look at it. He said that by that time he would have made some room in the shelves for Shan Masala. I asked about why they both did not give much attention to discuss the agreement in details? Mr. Patel said that the agreements are all in the same format and there are only minor changes to make. He said that trust is the building block of their business.
Conflict Handling Style
In my opinion, Mr. Khan had a Competing Conflict Resolution Style. I say this because, as I have discussed earlier, he was always insisting on his needs to be meat. He was always thinking of a win-lose situation unless a win-win situation was unavoidable. For most parts he got what he wanted and the salesperson seemed to have compromised to make the sale possible.
After my participation in the meeting at India A-1 grocery store, I accompanied Mr. Khan, the salesperson and requested him to take me to a meeting, at his convenient time, where he is going to as a salesperson. I thought that as I already have got a little acquainted to the personality of Mr. Khan, it would be beneficial to assess him for the remainder of my assignment. He said that he is going to a meeting now in relation to the sale of the same product and would be happy to take me there. He made a call to the owner of that store, Delhi Bazar Cash and Carry and told him about my assignment and requested his permission. The owner agreed and I accompanied MR. Khan to the meeting. Following are the details of meeting in respect to different terms and conditions discussed.
- Price: Just like Mr. Patel, Mr. Krishna, the owner of Delhi Bazar was trying to get the lowest price possible. Mr. Khan, as I have earlier discussed, is a lenient person when it comes to making new client. He tries his best to get a deal done. I think that he is more interested in the long run business relation rather than a short run business relation. At this store, Mr. Khan explained to the owner that in this area there are many Pakistanis and he has already done a survey that acted as an introduction to Shan Masala. He was of the view that due to the survey and the ethnicity of the most of the people in the area, most of the people already know Shan Masala. Mr. Khan was successful this time to convince Mr. Krishna on better price range than Mr. Patel at India A-1 store.
- Location on Shelf: Khan was of the same view when it came to the shelf position. He requested Mr. Krishna to put Shan Products at waist height so that it is visible to customers. Mr. Krishna politely argued against. He said that he already has that shelf occupied by another company and he will have to put it somewhere else. Mr. Khan inquired about the available position. Mr. Krishna had a store map and pointed to a position on it. Mr. Khan said that he is happy with this position but he would like to get more space than what is available. Mr. Krishna gave it a thought and then politely agreed. They agreed on a range of Shan Products from the list to be displayed on the shop shelves.
- Dispose of unused merchandize: Unlike, India A-1 grocery store where Mr. Khan agreed to accept the whole financial liability for the unused and expired products, he was able to negotiate a 25% liability to be placed on Mr. Krishna. He, in my opinion used a good guy-bad guy technique when he reminded Mr. Krishna that the last time they did business, some of the products expired on the shelves because the store employs did ignored and they sat in the back for a longer time than they should have. Mr. Khan has to accept the liability though he said that he was able to get a compensation from the supplier of the product.
- Agreement and next meeting: the agreement and setting the next meeting process was exactly the same as in the case of India A-1 Grocers. I think that all business deals at this level are based on mutual trust rather than on written agreements.
Conflict Handling Style:
Mr. Khan is a great salesperson. He knows what to do and how to handle different situations when it comes to conflict resolution. In the case of Mr. Patel, he used a compromising style of conflict resolution while over here he used both compromising style when they had to negotiate prices. He knew that there is not much he can do when it comes to negotiate prices at this level of business. When he had to negotiate the shelf position with Mr. Krishna, he used Accommodating style of conflict resolution and when it came to the matter of liability regarding the expired product, he used a collaborating style where he was able to create a win-win situation.