Negotiation process of an Advertising Campaign

Running Head: Negotiation Process 0
Negotiation process of an
Advertising Campaign

Negotiation Process 1
Introduction
Negotiation is a discussion done to resolve a particular issue in such a way that both of the
parties find it acceptable. In this, both the parties try to persuade and agree with their point of
view and try to gain more from the negotiation (Ahammad et al., 2016). In this report, there is
a detail description of the negotiation of the advertising campaign happen by the celebrity
endorsement. In the following, the celebrity for the endorsement is MS Dhoni, an Indian
cricket player. The company for which the celebrity will do the endorsement is DeGrandi, a
Geelong established company. This is established in the year 1929, by George De Grandi. So,
the negotiating parties include the Agent of Elite Sports Star’s Tsungai Michelle Mayoyo and
the agent of DeGrandis who is Gautham.
The various stages of the negotiations are (Arief and Supriyono, 2018).
Pre- Negotiations
The Pre-Negotiation includes the answers to the basic questions necessary to conduct any
kind of negotiation (Barak et al., 2018). This includes three parts which are the BATNA and
Reservation Value of both of the parties, and lastly, the ZOPA of the negotiation is been
described.
BATNA
The BATNA stands for the Best Alternative to a Negotiated Agreement. This means the next
solution given for a deal if the party is not agreed with the final price of the negotiation.
BATNA of Gautham: In this case, if Elite Sports is not agreed with the final price. Then
they will start their deal to sign the alternative sports star Sachin Tendulkar for the
DeGrandis.
BATNA of Tsungai Michelle Mayoyo: In this case, he will try to negotiate till the time he
will get the best price for the brand endorsement of MS Dhoni.
Reservation Value
The reservation value is the least favourable value for any kind of negotiation. This means the
minimum acceptable amount any party can get from the negotiation (Bennett, Hatfield and
Stefaniak, 2015).
Reservation Value from Michelle: The reservation value from the Elite Sports agent is $600
000 for three months.
Reservation Value from Gautham: The reservation value from the Degrands Sporting
Goods agent is $300 000 for four months.
ZOPA
The reservation value is the least favourable value for any kind of negotiation. This means the
minimum acceptable amount any party can get from the negotiation (Betzold, 2014).

Negotiation Process 2
Reservation Value from Michelle: The reservation value from the Elite Sports agent is $600
000 for three months.
Reservation Value from Gautham: The reservation value from the Degrands Sporting
Goods agent is $300 000 for four months.
Strategy: Both the parties had given the example of third-party negotiation for the
consideration for claiming high ZOPA rate. They started the negotiation with $600 000 but
the Degrands agent wants to start by $300 000. At last, they decided to start the negotiation
by $495k for three months and plus 12% commission based on sales if the sales are as per the
projection. Michelle, the Elite sports agent had given the example of fitness fanatics’ prices,
as a strategy to increase the maximum price for the negotiation. They told them that fitness
organization had offered 347,820 for their particular advertisement campaign. Gautham had
given the example of the price they are going to offer to Sachin Tendulkar for the deal. They
said that they are going to offer Sachin the price of $674,060 and they believed that they can
negotiate it down by 15%. For this, the Michelle had said that MS Dhoni is still the captain of
Indian Cricket Team. He had a lot of exposure and experience in his particular field. He is a
very growing and strong brand in the market. According to Forbes 2018, he is twenty in the
top paid sportsman. More than 80% of his net worth is just from the endorsements so they are
very sure that he can generate $1.8m sales for the organizations (Derek et al., 2018).
Negotiation
Negotiations with their counterparts for the endorsement contract: In this negotiation,
there are some of the important counterparts. In this, the agent of Degrands Sports had
informed that they are interested in making a negotiation deal and the Elite Sports Stars are
interested in the contract. They want the deal of $300 000 for four months. But the other
party wants to start the negotiation by $600 000 for three months. So, by this, the range for
the negotiation will be $600k-$300k. Both of the parties try to negotiate the price by giving
reasons for the price negotiation by giving other examples like Degrands Sports had given the
example of Sachin Tendulkar and the Elite Sports had given the example of Fitness Fanatics
for their negotiation, at last, the final price decided is $420k plus 12% of the commission on
$1.8m sales for four months. The commission will be given only when the company is able to
make the sales of 1.8m from the endorsement (Chien, Post and Siu, 2018).
The negotiation is the process with the aim of transferring the particular ownership of a
product or a service. In the following, the Communication Log is being prepared (Crocker,
Hampson and Aall, 2018).
Date Method Items discussed Outcomes
12/4/15 Mail Introduction of Agent
and company
Acceptance of offer
14/4/15 Mail Cash transfer on
closing
$300000 for 4
Months
16/4/15 Mail Starting offer and
assurance of
minimum amount of
$600000 for 3
months and can
assured earning of