Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Contemporary Selling, 5e
Chapter 8
Chapter 8 Outline: Negotiating for Win-Win Solutions
Value-Added Information in Chapter 8
• Global Connection – “Negotiating Price in a Global Marketing Place”
• Ethical Dilemma – “Helping a Customer or Something Else?”
o Exhibit 8.1 – “Summary of Customer Concerns”
I. Negotiating Win-Win Solutions
II. Negotiations: The Heart of the Win-Win Solution
1. Do I Need Your Product?
1. Product Need
2. Your Product Need
2. Do I Trust Your Company?
3. I Don’t Really Know You
4. I Need More Time to Consider Your Product
5. Is This Your Best Price?
1. Add Value to the Total Package
IV. Basic Points in Negotiating Win-Win Solutions
1. Plan and Prepare
2. Anticipation Enhances Negotiations
3. Say What You Mean and Mean What You Say
V. Specific Negotiation Strategies
1. Question
2. Direct Denial
3. Indirect Denial
8. Defer
9. Trial Offer
VI. The Sales Manager’s Role in Negotiating Win-Win Solutions
VII. Summary
VIII. Key Terms
Role Play
This role play continues the series of three role plays related to a new product introduction from
Upland, “Happy Teeth.” Here, students get to perform a “flashback” to before the sales call that
took place in the Chapter 7 role play. They also get to “role-play a role play,” in that the students
playing Alex and Rhonda get to do a mock sales call as Alex and Tracy (the buyer from Max’s
Hints for the Instructor:
• Exhibit 8.1 Summary of Customer Concerns and the accompanying discussion in the
book provide a good place to start in coming up with some potential concerns/objections
for the student playing Rhonda/Tracy to bring into the mock sales call.
Discussion Questions
1. Have you ever bought a new (or used) car? What were the negotiations like? Did you
enjoy the negotiations? Why or why not?
A good negotiation will overcome a customer’s common objections:
• Do I need your product?
• Do I trust your company?
o Unease about your company
o Loyalty to existing supplier
• I don’t really know you.
o Add value to the total package.
o Price should never be the main issue.
o Price is your friend, not your enemy.
A good salesperson should also follow these guidelines:
• Anticipation enhances negotiations – The salesperson will have a response to an
objection already developed and can reinforce it if the customer raises the
objection again. Working out solutions to customer objections in advance allows
the salesperson to offer choices so the customer is not compelled to say no.
• Negativity destroys negotiations – Allowing negativity, frustration, or anger to
enter the negotiations will lead to a similar reaction in the customer. When the
situation gets frustrating, step back from the process.
2. Do you think it is really possible to have win-win negotiations? Why or why not?
Yes, it is absolutely possible to have win-win negotiations. In fact, win-win negotiations should
be the norm. When a buyer and seller have a relationship of mutual respect and trust and discuss
3. You have made an appointment with a new potential customer. As you prepare for the
presentation you realize this person has never purchased this kind of product before.
What do you do?
• The salesperson should structure the presentation to give the customer a clear and
convincing reason to buy the product.
4. You have been meeting with a potential new customer regularly for three months. She
likes the product but finally admits a loyalty to the existing supplier. The buyer says,
“I have known Judith Gunther for ten years and she has been a very good supplier.”
What do you do?
This situation is the classic “loyalty to the existing supplier” objection. This objection must be
addressed carefully so as not to anger the customer or harm the relationship.
5. “I don’t know you, and I very much liked working with Oscar Jones. Why was he
transferred to Chicago?” The customer you have just met for the first time is unhappy
Chapter 08 - Negotiating for Win-Win Solutions
because of his relationship with the old salesperson. As a new salesperson, how
would you win over this important customer?
This situation is an example of the “I don’t really know you” objection. This customer was
6. Your company has just announced a 7-percent price increase on your entire product
line and you are meeting with your most important customer. She announces that
your competitor has already been to see her and will not raise prices for at least 24
months. What do you do to keep the customer?
This customer objection is based on price. Price may be a legitimate concern for this customer.
However, the problem is that the customer has not accepted the value proposition of the product
line. In order to keep this customer, the salesperson must either lower the price or raise the
perceived benefits. Because the salesperson cannot avoid the 7-percent price increase, he or she
7. Think of a time you were talking with someone and felt yourself getting angry. How
did you handle it? What steps would you take to keep from getting angry with a
customer who was being unreasonable?
Frustration and anger at the customer, the circumstances, or the way the process is going is
When a salesperson begins to get angry with a customer, he or she should step back from the
8. Your product is clearly not as good as the competition. The customer has been loyal
to your company for years, but you will not come out with a replacement of your
existing equipment for at least a year. What do you tell the customer?
The salesperson should be honest with the customer that the company will not come out with a
replacement of existing equipment; however, the salesperson should emphasize that her
9. Which negotiation strategy has the highest risk (possibility of making the customer
angry)? Which strategy do you think has the lowest risk (is most effective with
customers)?
The direct denial negotiation strategy has the highest risk because it is the one most likely to
make the customer angry. The customer will likely bristle if the salesperson directly disagrees
10. You are calling on a very large company that has the potential to become your
largest customer. How could your sales manager help you be successful in
negotiations with this potential customer?
The sales manager can be very helpful in making the negotiation with this potential customer
successful.
• First, the sales manager should authorize the salesperson to negotiate and endorse
the terms that he or she negotiates (within corporate policy) so that he or she can
Global Connection – Negotiating Price in a Global Marketing Place
Teaching Notes
The world is getting smaller. With improvements in technology and communication,
globalization is changing the market place. It is becoming more likely as a salesperson that you
will encounter an international sales presentation in your career. Negotiating a win-win solution
Answers to Questions
1. Do you think customers reference price in the same way around the world?
Customers often focus on price to the exclusion of other factors of the sale. Many customers
(especially those who are professional buyers) are evaluated and rewarded on their ability to
2. What are the primary challenges for negotiating price around the world?
Negotiating prices around the world involves currency exchange rates between countries, extra
Ethical Dilemma – Teaching Notes
Teaching Notes
This is a challenging dilemma. Students will probably first come up with two very different
answers. On one hand, some will say Emily should not do this because it is lying and violates
company policies. The other answer will be that if no one gets hurt and World eventually pays
the full amount, what is the difference? However, the issue is more complex.
company. Sometimes this will include unethical, even illegal concessions.
This dilemma opens the door for a great discussion on how far a company should go to
accommodate a good customer. World has had a strategic relationship with Accurate for many
years, and while the request seems unreasonable on the surface, Emily has a relationship with
students, is it worth losing World Manufacturing as a customer over this issue?
There are a number of ways to go with the discussion. It is possible, for example, to evaluate the
practice of World to demand 10-percent price cuts equally from all suppliers. Should all
Answers to Questions
1. Should Emily submit the false invoice to World Manufacturing? Why or why not?
Emily has a lot at risk with either decision. Certainly, she needs to follow her own ethical
principles. Her immediate response to Ben Griffin will depend, in part, on the ethical principles
and policies at Accurate. If the company has a firm stand on these practices and she knows she
All things being equal, Emily wants to keep the relationship with World without having to
confront Ben and World on the issue of price cuts. Some suggestions would be to consider
offering additional service contracts, delayed pricing terms, or spaced out shipments to reduce
2. How much negotiating should a salesperson do when confronted with a customer making
unfair or unethical demands?
Negotiating win-win solutions often involves difficult discussions, and while no one is required
3. What role should Emily’s manager play in dealing with this situation?
Emily’s managers should play a big role in this situation. Emily is in a very difficult situation
and needs to rely on her manager (and other senior managers in the company) to provide clear
Mini-Case 8 – Mid-Town Office Products
As noted in the chapter, negotiating for win-win solutions is a common and accepted part of the
personal selling process. This case reinforces the need for students to consider, plan for, and
practice various responses to typical objections heard by everyone who makes his or her living in
Answers to Questions
1. Potential sources of concern Ron is likely to encounter include unease about his company,
loyalty to the existing supplier, not being known by the office supplies buyer, the customer
needing more time to consider Mid-Town’s products and services, and the price being too high.
Since Mid-Town has served businesses in the eastern suburbs of Los Angeles up to this point, it
will not be well known among the downtown businesses. In addition, since office supplies are
something that every company needs, these downtown businesses will already have a supplier,
2. Two potential responses to the objection are using the feel—felt—found method and
third-party endorsements. The two methods could be used as follows:
a. “I understand how you feel about not wanting deliveries made during bank
operating hours. That would certainly interrupt your business. Other customers
b. “We don’t want to interrupt your business either. You know, others have had a
similar concern. In fact, Tracy McNeal, who purchases office supplies for
Doctor’s Associates in east Los Angeles, had a similar concern. However, after
3. Ron can effectively respond to concerns about Mid-Town’s prices being higher than
mail-order competitors by stressing the additional value provided by Mid-Town. Mid-Town
offers many advantages, some of which a mail-order company may not be able to provide. Those
