Learning resource in Psychology of negotiations by Jayadeva de Silva

1. Case study in Negotiations
in everyday life
(Lesson in Psychology)
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I went to some shops at Palika Bazzar underground shopping
centre in Delhi, India several years ago when my daughter
was studying at Delhi university
I liked a pair of sandals(foot wear) in a bargainshop and
wanted to buy same.

2. Prices in this place are negotiable
Now in most of the shops the conversationgoes like this:
‘How much is this?’ the shopper asks.
The seller takes a paper and writes—say—400.
‘Too expensive’
‘Okay, you tell how much you can give.’ The passer passes
the paper and pen to him.
He writes: 200.
‘Too less’ She cuts it and writes ‘350’
‘250’ he writes again.
‘300’
‘275’.
The seller finallysays ‘Hmm…Okay’ and gives the product to
him.
The shopper feels happy and leaves that shop feeling proud
that he had bought his favourite item after successfully
reducing the price by 125. He pats on his shoulder for his
bargainingskills.

3. But in this whole breakneck conversation, he forgets to check
if the product is really worth 275 or not. It could have been
made for just 25 or 50.
No seller sells the products at a loss (unless he wants to free
his warehouse for new batch of products or he is in urgent
need of cash).
The trick here is that the seller quotes a very high price such
that the bargain price still falls above the actualprice.
He psychologicallymakes the shopper focus only on the
discounted price and the savings he has made through
bargaining.He makes him feel like he is the winner.
This process has twin benefits—
It gives the customer satisfaction that he has successfully
won the bargain.
While for the seller, it gives him good profit.
This is the theory behindmost of the price-tags with strike-
through prices on them. Be it supermarkets, shoe-marts, or
onlineshops etc.
Jayadeva de Silva for Humantalents International