Chapter 12 – Formal Negotiating
EXERCISE 12-2 PUBLICATIONS ABOUT FORMAL NEGOTIATIONS
Go to your library and search for books, pamphlets, articles and tapes that specifically discuss the topic of
formal negotiations between buyers and sellers. Complete the following questions.
1.
List the title, author, and source of those publications that have as their principal audience
salespeople and/or sales organizations.
3.
Summarize ten important things you learned (can be from either source).
2.
3.
4.
6.
7.
8.
9.
10.
Chapter 12 – Formal Negotiating
Exercise 12-3 In-class Negotiation Exercise
Use the 2 scenarios on the following pages for students to role play a negotiation. You can do
Chapter 12 – Formal Negotiating
ROLE A – Marketing Director
Take a few minutes to read through the situation and think about
what you want to accomplish.
Recently promoted to Marketing Director, you’ve really enjoyed your new job. After four
months, you feel fortunate to have a pretty good team working for you. There is one exception,
however; a position for a product manager. When you took the team over, you were warned
about the person who was in that position and sure enough, after thirty days, you put him on
probation and then fired him after the probation period was over.
More importantly, your parents have booked a cruise to Alaska to celebrate their 50th wedding
anniversary and bought tickets for you, your spouse, and all of your siblings and their spouses.
This trip is July 7-14, but if you have no one on board for this job, you won’t be able to go.
Chapter 12 – Formal Negotiating
Also of concern is that Terry mentioned a South American trip immediately after graduation for
a month. You aren’t sure of the exact dates, but there is no way Terry can start and get the new
product launched and take a month to see South America.
You are about to meet with Terry one last time. Terry has just finished touring your St. Paul
facilities and meeting with your team, and the feedback from your team is positive. You must
make a decision and reach agreement on terms today if you are to hire Terry, as Terry would
then meet with HR again to finalize the paperwork. If you decide not to hire Terry, you must tell
Terry in your meeting today.
Come back to class prepared to share the outcome of your
meeting.
Chapter 12 – Formal Negotiating
Role B – Candidate
Take a few minutes to read through the situation and think about
what you want to accomplish.
Congratulations, you will finish your MBA at UMD in late May! After that, you
plan to tour South American, visiting Machu Picchu and the Galapagos Islands.
You leave June 15 and return July 13. The trip, costing you $3000, has already
been booked and paid for, leaving you with very little cash. In fact, you don’t have
the $4000 it will take to move your belongings to St. Paul and would really like to
have that cost covered, especially since your business wardrobe is also now limited
and you need to buy new clothes.
What you would really like to do is move back to your hometown of St. Paul.
Your father has had a few mild strokes, and you want to be closer to your parents.
When you saw the opportunity to interview for a marketing position with a
company in St. Paul you jumped at the chance.
Chapter 12 – Formal Negotiating
One of the members of the team confided that your prospective boss can be a tough
negotiator. You’ve prepared well, though, learning through a family friend that the
company has done very well. You heard that bonuses have been pretty good,
Come back to class prepared to share the outcome of your
meeting.
Chapter 12 – Formal Negotiating
Exercise 12-4 Extensive Negotiation Role Play Exercise
The following pages include information that can be used in classroom negotiation sessions.
UPS negotiates with L.L. Bean, while Apple negotiates with Target. It is easy to change target
positions on the various issues as you desire.
Chapter 12 – Formal Negotiating
Negotiation Role Play Apple MacBook Pro
(applecom/macbookpro)
You are going to negotiate with Target to get MacBook Pro’s to be sold in their retail and online
stores in the US 48-states. Target does not sell any Apple computer products (or any other brand
of computers), but BestBuy does carry Apple, for example. BestBuy has been a good customer,
and will continue to buy your computers in the future since you have two more years on your
Here are your target goals:
• To sell them to Target at no more than 30% off list price.
If you have any questions, please examine your website carefully. Make any appropriate
assumptions necessary. If you still need help or need questions answered, ask your instructor,
who is the Senior VP of Apple.
Chapter 12 – Formal Negotiating
You are going to negotiate with Apple to get MacBook Pro computers in your US 50 states and
US territories retail store (including online). You do not currently carry any Apple or any other
Here are your target goals:
• To be allowed to carry any other brand (non–Apple) of computer after six months of introducing the
MacBook Pro line.
If you have any questions, please examine your website carefully. Make any appropriate
assumptions necessary. If you still need help or need questions answered, ask your instructor,
who is the Senior VP of Target.
Chapter 12 – Formal Negotiating
Here are your target goals:
• To be the exclusive ground shipment company for 100% of L.L. Bean’s shipments.
• To give no more than a 40 % discount off of your current prices for services.
• A contract of not less than three years.
• To spend no more than $200,000 setting up the software on L.L. Bean’s computers to
integrate the shipping component.
Chapter 12 – Formal Negotiating
You are going to negotiate with UPS for them to be your carrier for all of your U.S. 48 states
ground shipments. You currently use FedEx Ground for this. You shipped approximately 17
million packages in 2009, with an average package weight of 2 ½ pounds. Packages shipped by
FedEx ground weighed from 1 pound up to 64 pounds in 2009. FedEx Ground has given good
service and they would like to negotiate a new contract.
Here are your target goals:
• To have UPS be the ground shipment company for no more than 85% of L.L. Bean’s
shipments. You want flexibility in case some customers can be handled in a less-
expensive manner (e.g., priority mail, truck shipping for items like canoes).
• To get at least a 50 % discount off of UPS current prices for services. FedEx is giving
you a 40 percent discount now.