CASE PROBLEM case 12.1

DoubleTree Hotels DoubleTree has more than 300 hotels in 23 different countries. The chain is owned by Hilton and strives to create what it terms CARE (Create a Rewarding Experience) for all of its guests. The CARE system starts with a warm chocolate chip cookie to welcome each guest. That is followed with stylish guest rooms, each including the Sweet Dreams by DoubleTree Sleep Experience. Most guest rooms offer the higher-quality CITRON bath products by Crabtree & Evelyn. DoubleTree also offers Fitness Rooms for its guests. Julie, a salesperson for Micros, was attempting to negotiate with DoubleTree with regard to Micros's OPERA Reservation System (ORS). ORS, a central reservation system, is a part of an enterprise-wide room inventory management system offered by Micros. ORS has many outstanding features, including the following: It supports multicurrency and multilanguage situations; it lets you set up rate structures for individual properties or groups of properties; it can easily handle complicated situations, such as shared reservations, frequent-flyer, and loyalty program memberships, negotiated rates, and rate discounts; and it conveniently searches for room availability across all of the properties. Julie met with the DoubleTree buyers on eight different occasions before the formal negotiation meeting. She had created a win-win proposal that she was sure would meet the needs of DoubleTree and Micros. Her boss had even congratulated her on her hard work and the proposed solution. "You're going to get it, I'm sure!" she had said. "And then we can start talking about that raise you've been asking for!" Everything was going great in the negotiation meeting until Julie was startled to hear Kevin Tarnoski, the key negotiator for DoubleTree, practically shout, "Listen, Julie! I can't believe you're asking that much for this little reservation system! The recession hit all of us in the hospitality industry very hard. Come to think of it, that's probably why you're trying to stick it to us with this price. Knock it off! Lower your price, or we'll go elsewhere!" He then proceeded to tell her how much he was willing to pay to lease her system. Julie didn't know what to say. The price cut being requested by Kevin was 5 percent less than Micros's minimum price objective.

Questions

1. Evaluate the negotiation meeting to this point. How could Julie have better planned for the meeting?

2. What should Julie do now?

Be explicit and give reasons for your answers. Make any necessary assumptions.

Sources: This is a fictitious scenario. Information about DoubleTree came from http://doubletree3.hilton.com/en/about/doubletree/index.html. Information about Micros came from www.micros.com/Solutions/ProductsNZ/OPERAReservationSystemORS.