Negotiation and Conflict Management

Negotiationand Conflict Management

Negotiationand Conflict Management

Boththe buyer and the seller should understand their positions whennegotiating for a price. They can use a distributive approach or anintegrative approach when negotiating for the price. A distributingbargaining occurs when parties are struggling for limited resourcessuch that whatever one party loses, the other party gains (Marzec,2014). It is a common approach used when two parties do not know eachother and do not see the possibility of future relationships.Integrative approach, on the other hand, is used when the two partiesperceive that they can jointly increase the outcome than when each ofthem acts individually. This approach is used when the parties intendto establish long-term relationships (Marzec, 2014). In the presentcase where the buyer is negotiating for the price of a boat, thedistributive approach is the most appropriate tactic to use.

Theinterests of the seller, Bob, is to make more profit or revenue fromthe sale of the boat, while the interest of the buyer is to get theboat at the fairest price possible. This means that the two partieswill be bargaining on the basis of their respective interests.

Thebuyer can set limits by comparing the offer price made by Bob and themarket price of the same boat. This means that the buyer should setthe highest price that he could be willing to pay for the boat.However, when comparing the price offered by Bob with those offeredby other vendors, the buyer should consider when Bob’s price isinflated by additional or after sale services (such as repair andmaintenance) that are not offered by other vendor.

Thebuyer may buyer may generate alternatives by buying another ship thatcan serve the same purpose, but sells at a price that he can afford.The buyer may also buy the same type of boat from other vendors orinform Bob about the prices offered by other vendors during thenegotiations in order to convince him to offer a fair price. Mytarget price would at most 2 % of the market price, which is $25,500.

Althoughthe other party’s interest is to make more revenue, the buyer’sunderstanding of the fair market price can convince him to let go ofpart of the revenue in order to avoid losing the customer. Therefore,the buyer’s knowledge is a critical weapon against the seller.

Reference

Marzec,E. (2014). Differencesbetween distributive bargaining and integrative bargaining.Santa Monica: Demand Media.