Negotiation Strategy (20 points)

Today, you have the good fortune of calling on a prospect in the hopes of selling your product, Presto-Espresso, a $3,500 espresso machine. This is a high quality, commercial grade machine imported from Italy. It is manufactured by one of the finest factories in Europe and your firm is the exclusive representative for this brand in the United States. Your major competitor sells the Expresso, a good quality machine that sells for $3,000. Your machine is made from the finest materials, parts and components on the market and so you can offer a five year warranty, while Expresso offers a three year warranty. Also, scientific research has shown that your machine provides a more consistent coffee quality.

Your prospect is the owner of a local caf that draws a lot of morning and lunch business from the many companies in the area. It draws a lot of evening traffic from the residents of this fairly wealthy community, and the nearby university crowd spends a lot of time and money here throughout the day. The owner is also part of a small business consortium that represents twenty five local cafs. You believe this could be the first sale of many within the consortium.

Is this a scenario when you should negotiate to win (highly competitively) or when you should negotiate collaboratively? What are the advantages and disadvantages of negotiating to win in this circumstance? What are the advantages and disadvantages of negotiating collaboratively in this circumstance?