The mobile manufacturing company recently discovered there is a need of smartphones with great features such as large storage capacities and camera resolutions but at a lower cost to accommodate the population that cannot afford the alternative devices with same specifications. I was privileged to serve as sales agent in the contract deal between a smartphones company and an Ecommerce organization. Hence, representing the smartphones manufacturing company the aim was to increase the sales by marketing through their online websites that will increase the number of prospective customers who will likely buy the product (Shonk). The stake holders were the marketing team of the smartphones manufacturing company which comprises of the sales agents and the marketing team of the Ecommerce platform. Hence our negotiation strategy was based on the commission, discount, price and profit of the products we sale through the online marketing platform and what benefits do the online marketing platform company gain from such transactions. The cost of advertising the product is also important in the business negotiation since the objective is to make thensmartphone product be known and increase the sales of the product since it is new in the market.
Information sharing is critical in the negotiation of the contract hence there is need to share every detail concerning what both companies bring to the table. The online marketing company will bring out the services they offer which will range from advertisement to delivery to the customers just to mention few of the services they provide. As for the mobile manufacturing company, it will bring out the products that they offer such as the various smartphones and the mobile phone accessories. Since the mobile company is new in the market, we are prioritizing in a penetration pricing strategy in our price matrix choice. Which means lowering cost of a quality product with the objective of attracting high sales in that the customers will switch to the lower cost product with amazing features that the product offers? Hence with this marketing pricing, it will tract huge sales benefiting the company and therefore will be considered the fastest way to obtain market share. The disadvantage of adopting this kind of technique is that there will be low-profit margins and there might be the occurrence of customer resistance if the price of the products is raised. In setting up the pricing cost, we analyze the labor input, raw material expenses, tax, and profit. Hence, the four named variables are essential for estimating the price and the company elaborates on the percentage of the commissions in the sales of the product and the discount the online marketing organization may be offered in the negotiation table. After necessary bargaining tactics which entailed extreme demands from the online platform as well as our take it or live negotiation strategy in our team concerning the discount and commission percentage. Our best alternative negotiation agreement was that a commission of ten percent for every hundred smartphones products sold and a commission of twenty-five percent of merchandise for every two hundred and fifty products sold in a week.
We chose the online marketing platform since it creates more than ten thousand sales in a week hence signifying the market share that the platform enjoys thus our strategy was to tap in the market share and increase our sales (Martinelli). The customers are the only ones who will not be involved in the negotiation of the pricing of the product, but there will make a massive stake in the effectiveness of the deals since both parties will benefit from the sales of the product.
Hence in preparation for such a negotiation scenario, you should be conversant with the economic trends and how to pull a market share, various marketing strategies that should be instituted to achieve the desired results. The pricing strategy of the product such as the mobile phones one needs to view the marketing trends. For a new device and one need to acquire a significant market share the company will opt to use the penetration pricing models to attain the high sales but will have low-profit margins. Hence in negotiations, there are several strategies that one use to set out his demands as wells safeguard the interests of the organization (Michaels).
Preparation for the negotiation
In this scenario of negotiating, we adopted a try it or leave it strategy while tabling the offers that we had when the negotiation was very extreme since the online marketing organization had adopted extreme demands of various unreciprocated offers to our company. Hence with our strategy, we were able to table a proposal, and there were multiple offers that the online marketing company will benefit from ranging from the discounts, commissions, and the advertising fees that it obtains. The stakeholders who are directly involved in this business scenario are the two parties that negotiate for the deal such as the two business parties negotiating a partnership deal or a contract that consists in benefiting from the merger of resources they have at their disposal. The stakeholders who are not always involved but have a considerable stake are the customers in the business since they are the one who makes the company to run. The resources that will be used to obtain knowledge on the deals that one is making is by reviewing such kinds of deals that have been done in the past with the objective of gaining the various strategies they used in negotiating the deal. Most of the resources are found online concerning the arrangements between business partnerships since they are under jurisdiction to inform all the stakeholders which includes the customers hence they must be tabled in a news article to inform the all the stakeholders concerning the business as long as it trades in the stock exchange. Most negotiators in the business scenario do adopt bargaining tactics to be able to table the agreement on the deal. The common ones are extreme demands, take it or leave it strategy, use of unreciprocated offers, and good cop bad cop.
Works Cited
Martinelli, P. “Analysis of Negotiation Strategies between Buyers and sellers.” Science Direct (2018): 23-37.
Marzec, E. “Difference between distributive bargaining and integrative bargaining.” Business models and Organisation Stucture (2008): 35-37.
Michaels, R. “Pricing Strategy Matrix.” Mindtools (2017): 11-15.
Shonk, K. “Win-win negotiation strategy.” Program on Negotiation (2017): 111-129.
Staff, P. “Ten Hard Bargaining Tactics and Negotiation skills.” Promotion of Negotiation (2018): 2-17.
