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Obrien X Scream - Negotiation Paper



This paper describes a real life negotiation situation.

This paper describes a real life negotiation situation.



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Obrien X Scream  - Negotiation Paper Obrien X Scream - Negotiation Paper Document Transcript

  • OBRIEN X-SCREAM<br />BAYLOR UNIVERSITY<br />Negotiating and Conflict Resolution<br />MGT 4320-01; T/TH 12:30-1:45; Fall 2010<br />Professor: John Ferguson, J.D.<br />Student: Jeremy Carter<br /> <br />TABLE OF CONTENT<br />
    • Body of Paper…………………………………………………………………...3-9
    • Works Cited………………………………………………………………...……10
    This paper is in reference to an integrative negotiation situation that was experienced by Jeremy Carter during the 2010 Fall semester at Baylor University. The negotiation and transaction occurred over a three month period, from July to October. This paper will discuss the reason for the transaction, how research was done in relationship to the transaction, why the transaction took place or what caused the transaction to conspire. Also being described: the method of interaction that took place between the parties during the transaction, how the transaction took place, and the additional step-by-step details of the actual transaction.<br />On a late summer afternoon in July having fun on the lake, a friend pointed out that the tube was no longer holding air. This was not a good sign and indicated that multiple fixes had finally failed. Upon inspection, it was discovered that the source of the leak was severe. The leak was located on a seam and seams leaks are often not repairable; the pressure placed on the tube is often too great for patches in these areas. <br />This is when the search for alternatives began. Option one: try to patch it yet another time with a high probability that the patch will fail. Option two: search for another tube. Tubes could be found through a variety of ways from Craigslist to eBay, boating accessory suppliers web-sites to boating magazines, local boating dealers, to borrowing one from a friend. This list of alternatives all made up my BATNA (best alternative to a negotiated agreement).<br />It was now time to do the pre-negotiation work of collecting information on what Jeremy would accept in the next tube. Jeremy had to decide his preferences such as size, shape, covering, and weight capacity. The negotiation terms that were important are pricing, shipping costs, warranties, and quality of the tube. The ranking of these features broke down as follow: 1st warranty (most important), 2nd pricing, 3rd quality, and 4th is shipping (least important). The next step was initiating the negotiation with the seller or supplier. The seller in this situation is a company called The House Board Shop, located in Minneapolis, Minnesota. Jeremy found the company on an internet search and also a boating magazine that he receives regularly. <br />Jeremy then proceeded to start the negotiation by calling the phone number in the magazine. After a sales representative named Brent introduced himself, Jeremy proceeded to briefly tell him what products interested him. Brent made some recommendations and also told Jeremy about the tubes that were currently on sale. Jeremy stated that he was really interested in a less expensive tube than Brent initially mentioned. Jeremy’s emphasis seemed to be only on pricing at first, but in reality he was interested in other features as well. This was a typical practice of bait-n-switch; Jeremy knew the specific tube that he was interested in, it was called the OBRIEN X-SCREAM. The OBRIEN X-SCREAM is a heavy duty inflatable four person boating tube, with a diameter of 96” which met all of Jeremy’s requirements. Jeremy let Brent start by describing the basic features of a smaller tube called the BOMBER. Brent also explained the qualities, advantages, and disadvantages of the tube. Jeremy asked him if the tube would withhold the abuse that he put tubes through, explaining to Brent how his previous tube had ripped numerous times, how he was sick of patching the tube multiple times and wanted something that was durable. Brent then asked if Jeremy would be interest in a larger tube, which would end up being a better deal and was also the tube Jeremy initially researched and wanted. Brent explained that the OBRIEN X-SCREAM was constructed of a thicker vinyl than the cheaper BOMBER (the one Jeremy previously owned). Jeremy proceeded by asking questions about the pricing, quality and warranty of the tube. Brent said that the $279 price included paid shipping and a 30 day warranty. This was a little more than $100 over the BOMBER price which Brent told Jeremy about initially. Jeremy told him that the OBRIEN X-SCREAM was beyond his budget, but wanted the quality it offered. Jeremy explained that he couldn’t make a decision at the moment and would call back later. Before ending the call, Jeremy asked Brent for his direct phone extension, so that Jeremy could continue the negotiation and relationship at a later time. Jeremy hoped this would help him get the best deal, since he had already built rapport and trust with Brent. <br />A few days later Jeremy called back and asked for Brent. Jeremy refreshed Brent on who he was, the man interested in the OBRIEN X-SCREAM just a few days prior. Jeremy notified Brent that he really could not afford the retail price of $279.95. Jeremy asked Brent if he could come down to $229.95 since it was already late summer and the peak season for boat accessories sales was nearing the end. Jeremy avoided making too generous of an initial offer by offering below his target point. Jeremy told Brent that he was originally looking to spend less than $200.00. Brent agreed with the angle Jeremy presented about being late in the season and asked Jeremy if $249.95 would be an acceptable price. Jeremy thought this would be a good agreement since his aspiration point was to be under $250 out the door (included all additional costs such as shipping and warranties). By this point, both parties had embraced a mutual adjustment. Jeremy told Brent that he would agree to the deal as long as he would extend the warranty to more than 30 days. Brent offered to extend the warranty to 90 days to help lesson Jeremy buyer’s remorse. Jeremy told Brent they had a deal. The deal included a price of $249.95, a 90 day warranty, and free shipping. Now that both Jeremy and Brent agreed on the terms the negotiation, they could close the deal, Brent then collected Jeremy’s contact and payment information. In the end, the negotiation was a win-win deal for both parties, also referred to as an integrative negotiation. The House Board Shop would receive a value in the form sales or income and Jeremy would receive value in the physical product while Brent received commission. The next day Jeremy received an email receipt with the tracking information, making the contract official. Within a few days Jeremy would receive the product in the mail. <br />Now it was time to enjoy the tube and watch the pain it would inflict on riders. During the next few weeks, the tube would be put to the test, more times than not the tube would win the battle between rider and tube. However, this did not last long. On the fourth weekend of use, the tube had yet another major leak spring open from one of the seams and was located on the top side of the tube. Leaks in this location are often not repairable, causing Jeremy to think to himself how could this leak have been caused, but could figure it out. After a few days, Jeremy decided to call Brent to see what he thought. Jeremy hoped that he could get Brent to see it as a warranty issue and replace the tube due to inadequate product quality. Brent told Jeremy to hold while he checked with the store manager on how to handle the situation. Brent discovered from the manager that the O series of tubes had quality issues and multiple seam failures. There had been a batch in production that had been incorrectly constructed and had been improperly glued on the seams, which was most likely the cause of the tube’s problem. Brent gave Jeremy three options: the first was to exchange the tube for a new one; the second was to return the failed tube and select another model in exchange; the third option was to just get a refund. Jeremy thought it would be best to just do the exchange for the same model, since Jeremy had received such a great deal on the original one. But before making the decision Jeremy needed to ensure the return shipping costs would be paid for by the Shop. Brent notified Jeremy that all instruction for returning the old tube would be included in the new tube package. The paper work specified that Jeremy needed to return the old tube within 15 days. If not, Jeremy would incur an additional charge on his credit card. Jeremy wondered if the Shop would allow him to keep the old tube since they would probably scrap the old tube anyways, so Jeremy decide to call Brent back to see if there was anything the Shop could do to make it happen this one time. This would also save the Shop on shipping costs. Brent understood Jeremy’s argument, but insisted that it was a company policy and that Brent did not have authority over the decision. Brent said that the Shop does not recommend repairing leaks in areas such as Jeremy described to him. Jeremy again reiterated that it would save the company money if he just kept the tube. Brent explained to Jeremy that the manufacturer didn’t recommend patching leaks that occur on the seams and that they had to send the defective one back to the manufacturer. In the end, Jeremy received a great deal on a new tube and even managed a replacement tube free of charge. How could he complain? <br />The negotiation started by researching the possible products available, setting a BATNA using internet-web sites such as Craigslist, eBay, and direct boating accessory companies. Once Jeremy determined the range and reservation point that he was willing to pay, he proceeded with the actual negotiation using the direct method of gathering information by conversation with Brent the salesman. By planning ahead of time, Jeremy set a bargaining mix of issues, and then ranked them according to their importance. This was a good tool to keep Jeremy focused on the right features so he would push for the most important issues first. Jeremy felt these first few steps were critical in directing the negotiation in his favor. Jeremy had already determined his reservation, aspiration, and settling point by this time, making the process less stressful and helping him focus on his goals. Jeremy also had determined that he needed to take a chance and go against the typical social constraints associated with buying from a source over the phone. They are often seen as inflexible on product pricing and warranty. Jeremy decided that his best tactic was to have rational reasons to back up his terms, but Jeremy did not want to use a hardball approach. This would likely alienate the Brent and knew that he would probably be buying items from the Shop in the future. Jeremy thought it was important to build a connection with the selling party, so he proceeded by describing how he had enjoyed a recent store visit over a summer internship trip to Minnesota. This technique of relationship building would help build trust and make the negotiation more amicable between the parties to sway the negotiation in his favor. During the negotiation, Jeremy spoke about how he really enjoyed previous product purchased. Jeremy also understood that the Shop was in business to make a profit and made it clear that he would help the Shop as much as possible with future sales through referrals. The negotiation resulted in an integrative outcome for both the Shop and Jeremy. The Shop gained sales and profits while Jeremy gained a product that he would enjoy. <br />However, there were some aspects of the negotiation that Jeremy would have changed if he were to start over. Jeremy would have preferred to keep the old leaky tube and salvage it, since the Shop would most likely discard it. Ideally, Jeremy wanted to work this into the exchange, rather than just sending it back. Brent definitely took multiple different approaches when trying to close the deal, referring to the free shipping, best quality product on the market, limited stock levels and number of product produced. He said that it is hard to tell when the next shipment would be delivered. This was testing the two dilemmas: first of trust and second of honesty. Was Brent really telling the truth or was he misrepresenting the product and being bias? If he was bluffing, this could lead Jeremy to dissatisfaction and ultimately create conflict between the two parties. He also mentioned a deal sweetener, saying that he would throw in a free duffle bag with any purchase made that day. In conclusion, Jeremy ended up receiving a new tube in exchange for the old tube. Jeremy decided returning the old tube was the best way to avoid the additional expenses of keeping the tube. Jeremy and Brent finished the negotiation in an integrative agreement.<br />CITED WORK<br />
    • The House Burton Snowboards, Snowboard Boots, Bindings, Jackets, Pants, Clothing, K2, Ride, DC, Holden, Bonfire. Web. 09 Nov. 2010. <http://www.the-house.com/>.
    • The House Invoices ( 3 pages )
    • Original invoice (Appendix A)
    • Return invoice (Appendix B)
    • Return label(Appendix C)