L4M5 CHAPTER 3 3.1 Identify the stages of a commercial negotiation

Question 1

What are the key phases of a negotiation?

Answer 1

The opening phase: confirm understanding and get the issues on the table. At this stage, both parties should check agenda, authority and create atmosphere conducive to agreement

The testing phase is an information gathering stage where the hypothesis and assumptions you have made in the planning stage can be tested and confirmed or disconfirmed

The proposing phase: Both sides may start making tentative proposals regarding their offering.

The bargaining phase: Both parties trade concessions; the preliminary stages are over and proposals move from being tentative and general to being more definite and specific.

The agreement and closing phase: both parties should seek agreement or if TOP does not have the final authority, some sort of acknowledgement of what key terms are should be sought.

Question 2

What does the acronym ‘RESPECT’ mean?

Answer 2

Seven steps to agreement: 1. Ready yourself 2. Explore needs 3. Signal for movement 4. Probe with proposals 5. Exchange concessions 6. Close the deal 7. Tie up the loose ends

Question 3

What are the dos’ behavior at the opening stage of a negotiation?

Answer 3

Be punctual and well presented Welcome the TOP arrival - be courteous Break the ice with small talk Use visual aids to set out key objectives/make key points Start the conditioning process Check authority Check agenda - key source of power Employ warm with the person/tough on the issue approach from the start

Question 4

What are the don’ts’ behavior at the opening stage of a negotiation?

Answer 4

Don’t use strong, push, cold or tough style at the opening.

Don’t put any markers down.

Don’t criticize other organizations/TOP’s previous contacts/third parties.