Transcript about negotiation case:

(1) Wrong Way Robert: Hi, I'm Robert. I'm director of a new product at a major retail company. We're having troubles negotiating with a key vendor. He's being a little problematic and not giving us reasonable pricing. Hey, Harry. Thanks for being here. Harry: Yeah, nice to see you again, Robert. Robert: Went through your catalog. The spring line looks very good. We'd love to buy that from you. The number that my side came up with is $120,000, and we think that's very appropriate for your spring line. Harry: OK, a little surprised. That's very low. $150,000 is what that will be at. And that really truly is my best price. Robert: Well, my side took a look at the numbers, and it looks like 120 is more than fair for the spring line. It's not that big of a line, first of all, so I think we can work with that. Harry: I'm not sure where you're getting your numbers from, but I actually deal with the materials and the work that goes into it. And very directly, 150,000 is just above cost for us. And that line is essentially being given to you to maintain this relationship. It's almost really a favor. Robert: A favor, OK. Well, Harry, there are other vendors there. And we've taken a look at their spring lines too, and they look pretty good as well. And I think we can work with them to get $120,000 for their spring line. Harry: If you think you can do better with them, then that's fine. You can go ahead and talk to them. I don't think you can, but I cannot go below 150,000 for that line. Robert: Well, it looks like we're at an impasse. (2) Ask the Coach Robert: So, Audrey, I've had this experience in the past with negotiations. And they've always been a little rocky with some of my vendors. Sometimes we can't come to a conclusion on pricing. So I was wondering if you had any tips on that. Coach Audrey Lee: So a lot of times in negotiations, people get stuck on what you might call positions, like they're just saying something, asking for something, demanding it. And what's really helpful is to try to take a step back from positions, to try to understand interests, what's really motivating them to ask for that position. So it sounds like, here, and in other instances, the pricing has been an issue. Hear that a lot, right? Everyone wants to get a good price for a lot of different reasons. But why is it that they want to get the price that they're demanding? So trying to shift your way of thinking about it to getting more information to understand what's behind that number. Robert: So I should be asking more questions and kind of probing what's behind that. OK. Coach Audrey Lee: Exactly, trying to get more information, why is that important to you, what does that number represent? So other examples of interests might be being treated with respect, maintaining a good relationship. It sounds like you've had a long-term relationship with this vendor, so the other vendors Robert: Yeah, we've worked with each other for years now. Coach Audrey Lee: Yeah, I would imagine. There are long-term relationships because the suppliers and vendors sometimes are very hard to come by And so keeping those in mind, as opposed to just getting very fixated on the particular number. So understanding that will allow you to probably come up with some different ideas for how to, hopefully, reach resolution in some of these negotiations. Robert: That makes sense. Cool. I'll try that next time. (3) Better Way Robert: Hi, I'm Robert. I'm director of a new product at a major retail company. I'm having difficulty negotiating with a key vendor. He's not giving us reasonable pricing, and it's becoming a problem. Hey, Harry. Good to see you. Harry: Hey, good to see you again, Robert. Robert: Thanks for coming in. Harry: Sure. Robert: So we looked at your spring line, and it's great. And we'd like to take that for $120,000. Harry: OK, that's a little low. The lowest I can go on it is $150,000. Robert: $150,000, OK, it's a little high for us. Can you tell me what's behind that number? Harry: So part of what's going on is, each time that we negotiate, we're negotiating just for each season. So I have given you a lot of breaks in the past. And I can no longer do that for each season that we're negotiating. Robert: Gotcha. What's changed that you can't do that anymore? Harry: Well, we're actually moving to a way to negotiate in a larger and longer scale. Robert: OK. Harry: We can negotiate price over time, as long as you make a commitment on a yearly or more basis. Robert: I see. So if our side commits to maybe a few seasons at a time, then you could be a little bit more flexible on your pricing. Harry: Right, absolutely. Robert: OK, so yeah, that might work for us. Let me go back to my team and give them the new information. And I'll come back to you and see what we can do. Harry: Sounds great. Robert: Great.

Watch the following transcript in order (from 1 to 3) and answer these questions: 2.1 Why is Robert having difficulties in transcript (1)? 2.2 Why do you think transcript (3) shows a better way to approach integrative negotiation? 2.3 What new insights do you have that could benefit you or others in your workplace? 2.4 What are your biggest opportunities for applying concepts from this Lesson in your workplace?