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1、Chapter ElevenDistributive VS Integrative Types of NegotiationChapter ElevenDistributive VSWin or lose?Win Win?Negotiations can be categorized into two types by how people looking at the results of negotiations: the distributive, representing win-lose result and the integrative, representing win-win
2、 result.Win or lose?Win Win?NegotiatioDistributive NegotiationsWinLoseRelationship: simple and secondaryIssues: simple and tangibleReward system: win or loseAssumptions: only present interestsDistributive NegotiationsWinLoStrategy usedTo reduce others resistance to making of concession To reduce oth
3、ers estimation that you will concede To exploit others trust, low skill and inexperience To exploit information asymmetry Strategy usedTo reduce othersPrice Negotiation and Cost AnalysisTwo basic cost functionsvariable costs: raw materials and laborFixed costs: supplier has to bear irrespective of w
4、hether it manufactures anything or not, such as rent, rates, insurance, wagesPrice Negotiation and Cost AnaFixed Cost Elementsplanning and production expensesexpenditures on plant and equipment, and such administrative costs as salaries, insurance, depreciation and interest on overdraftsmarketing an
5、d distribution costscost of running the marketing operation (including the sales force), provision for retailer support Fixed Cost Elementsplanning an Variable cost + fixed costs= cost of product+ profit margin= selling priceEquation of cost structureProfit Variable cost Equation of cNegotiations on
6、 PricePrice ZoneBuyers negotiation zone First offerBottom lineFirst offerSellers negotiation zone150180170200BuyerSellerZone of possible agreement 10Negotiations on PricePrice ZonIntegrative NegotiationThe word integrative by concept implies some cooperation, or a joining of forces to achieve someth
7、ing together. Integrative negotiation usually involves a higher degree of trust and a forming of a relationship. Integrative NegotiationThe worIntegrative Negotiation BasicsMultiple IssuesInformation sharingProblem SolvingBridge BuildingIntegrative Negotiation BasicsStrategies for Integrative Negoti
8、ationGain first hand informationPlay FairPresent Multiple OffersThird Party AssistanceStrategies for Integrative NegNegotiation SimulationUsed Car SellerRequirement for negotiation: Read buyer and sellers part in the book respectively;Discuss with your partner your negotiation strategy, including yo
9、ur first offer, bottom line, and the zone of possible agreementRalphs Manual of used car prices Negotiation SimulationUsed CarCase StudyHow did the buyer find out the price of the equipment was over valued?Point out those factors which make it possible for the buyer to make the cost analysis. Case S
10、tudyHow did the buyer fiCase StudySarah Meets WalMart(1) What is the most important point for Sarahs success dealing with WalMart?(2) How did Sarah turned a distributive negotiation into an integrative negotiation?(3) Why did Sarah suggest that “Trying to bluff Walmart buyers is never a good idea”?(4) Why did Sarah suggest that “Try not to let Walma
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