MBA506 - Negotiation: Pre and Post Negotiation Report

This report details a negotiation exercise focused on securing a celebrity endorsement contract, outlining pre-negotiation strategies including BATNA, reservation values, and ZOPA analysis. It explores both distributive and integrative negotiation approaches, emphasizing information sharing and value creation to achieve a mutually beneficial agreement. The post-negotiation phase summarizes the successful attainment of a contract with Gareth Bale for an advertising campaign, highlighting the importance of contingency clauses and understanding the celebrity's needs. The communications log provides a timeline of discussions and outcomes, demonstrating the application of negotiation principles in a real-world scenario. This document is available on Desklib, a platform offering a wealth of study resources for students.

ASSIGNMENT

Pre-Negotiation
1. What is your client’s BATNA? What is your client’s reservation value?
In accordance with agent’s appointment letter provided by the client, the company has shown
its interest in celebrity Gareth Bale, the same is BANTA in present case. The contract fees of
Gareth Bale are $850000 approximately with a room reduction of 15% during the deal. Thus,
it is expected that same would be reduced to $722500. It can be depicted that my client is
willing to pay the same amount or less that provided value for Mr. Bale, this is the
reservation value.
2. What is the other party’s BATNA? What is the other party’s reservation value?
As per the details of other party’s appointing agent, BATNA is another retailer dealing in
sports goods named Degrandis sporting goods. The same is ready to provide contract fee of $
521740 with 15% negotiation while making the deal. Thus, the reservation value for another
party is $600000.
3. What is the ZOPA range? What is your strategy for claiming the greater proportion of
the ZOPA?
ZOPA is referred as Zone of Possible Agreements which describes the intellectual range sales
and bargaining range between parties of a contract where both of them can agree (Perkov,
Primorac and Kozina, 2016). ZOPA range in present case is between $600000 and $722500,
making a claimable value of $122500 for both the parties to agree on.
The range can be referred as place from where mutual decision can be attained. Expecting
values far away from specified range will lead to complexity in decision making and nothing
else. The strategy depends on type of negotiation applied in specific contract (Kim and Park,
2017). There are two types of negotiation: distributive and integrative negotiation (Sebenius,
2015). Under distributive negotiation parties contend over the allocation of a preset sum of
value. The first and significant query of distributed negotiation is “Who will assert the most
value?” Growth by one sided is made at the cost of other. This is also called zero-sum
negotiation. Hüffmeier and et.al. (2014) asserted that both works for the best transaction and
also each gain by one party will be the loss for the other party. In case of integrative

negotiation parties collaborate to attain maximum payback through incorporating their
interests in a contract (Brett and Thompson, 2016). Another name of this negotiation is “win-
win” negotiation. Further there are numerous of items and problems to be negotiated and the
objective is to build in so far as possible for yourself and the other side. Aaldering and Ten
Velden (2018) specified that every side producer trade-offs to obtain the things it worth most,
though giving up other, less significant aspects.
In prior case of distributive negotiation, contract parties attempt to divide the fixed pie. Thus,
in this case it is difficult to attain mutually acceptable solution as they attempt to attain the
maximum share possible. Samsura and et.al. (2015) asserted that the outcome of this kind of
negotiation is win-lose; i.e. one person wins only when other person loses. However, in case
of integrative negotiation attempt is made to create value through contract (Aslani and
et.al.2016). The same is possible only when both the parties share interest and deal in
appropriate manner with existing issues. Thus, in this situation both the parties could win.
The same policy can be attained in order to claim greater portion of ZOPA. Through this they
will be able to add on the existing size of pie and both parties will be benefited too (Patel and
Rubin, 2016). Initially focus will be made on this strategy only, as chances of succeeding in
same are more in comparison to other strategies. Second strategy which will be applied will
be discussion of superior information with other party. In this discussion, details relating to
product (soccer shorts), market along with economic conditions relating to subsector will
be discussed. Information attained from same will be applied to convince another party to
accept the negotiations terms. The same will assist in attaining major share of ZOPA.
Another strategy which could be applied is providing assessing about the product and
company in detail so that they are able to convince that their product is better than other.
Moreover, being part of their company will provide addition to their existing value. Thus,
they should convince that mutual decision might affect other contract with company and he
could part of promotion campaign of other products too. In words of Hawes and Fleming,
(2014), convincing power plays a significant role is attaining major proportion of ZOPA. As
the whole decision depends on same. The more the person is convinced with you, the more
chance exist that he will negotiate and you will be able to grab higher proportion of ZOPA
(Schuster, 2015). Above specified strategies can be applied in order to attain higher portion of
ZOPA. Lastly, preference would be given to distributive negotiation approach as the same is
beneficial for both the parties.

Negotiation
Appendix-1
Post- Negotiation
Mukul Pundir
[e-mail]
Date
www.degrandissports.weebly.com
Fergus DeGrandis
CEO
DeGrandis Sporting Goods
Respected Fergus Degrandis,
Sub: NEGOTIAION FOR MR. GARETH BALE ENDORSEMENT CONTRACT
I am happy to provide to you notice that I have succeeded in attaining the advertisement
contract deal for product of your company i..e. soccer shorts by personality Gareth Bale for
$660000 for 3 months along with contingency contract. Further the same has assured to
compensate in case we are not able to attain estimated sales of specified product from
promotion. It was not easy to finalize the deal but the same was possible due to understanding
nature of Mr. Garthe Bale. In accordance with his words and his previous experience, he
usually does not negotiate on his contract fee for any of the agreement to this much extent.
But after presenting the terms relating to compensation in case the approximated figure of
sales are not attained, he was ready to negotiate with provided terms.
Mr. Gareth Bale is known and trending soccer player, many other buyers were also
interested for signing the contract. I was able to attain the contract for three months for
$660000 only due to assistance of your instructions and assessing approximation earning in
present time. The duration of three month will be sufficient as per the assessment and
analysis of relevant variants. Even the same has been assessed as break even duration as no
profit and no loss to the organization will be attained if promotional activity is accomplished

within period of three month. Contingency clause of a contract specifies the provision which
require specific action or event to take place in order to make the contract valid. Thus, in
order to assure that no contingencies arise in future, same discussion were made so that things
can be made clearer relating to contingency. For sake of same, the term of contract also
comprise contingency clause which states that in case DeGrandis Sports will exceeds the
specified earning than it will provide 20% of the earning.
Congrats.
Expecting to hear from your for further processing.
Yours earnestly
Mukul Pundir.

References
Aaldering, H. & Ten Velden, F.S., (2018). How representatives with a dovish constituency
reach higher individual and joint outcomes in integrative negotiations. Group Processes &
Intergroup Relations, 21(1), pp.111-126.
Aslani, S., Ramirez‐Marin, J., Brett, J., Yao, J., Semnani‐Azad, Z., Zhang, Z.X., Tinsley, C.,
Weingart, L. & Adair, W., (2016). Dignity, face, and honor cultures: A study of
negotiation strategy and outcomes in three cultures. Journal of Organizational
Behavior, 37(8), pp.1178-1201.
Brett, J. & Thompson, L., (2016). Negotiation. Organizational Behavior and Human Decision
Processes, 136, pp.68-79.
Hawes, J.M. & Fleming, D.E., (2014). Recognizing distributive or integrative negotiation
opportunities in marketing channels: the conceptualization of adaptive
negotiations. Journal of Marketing Channels, 21(4), pp.279-287.
Hüffmeier, J., Freund, P.A., Zerres, A., Backhaus, K. & Hertel, G., (2014). Being tough or
being nice? A meta-analysis on the impact of hard-and softline strategies in distributive
negotiations. Journal of Management, 40(3), pp.866-892.
Kim, N. & Park, H.J., (2017). Making the Most of the First‐Offer Advantage: Pre‐Offer
Conversation and Negotiation Outcomes. Negotiation Journal, 33(2), pp.153-170.
Patel, B.N. & Rubin, G.D., (2016). Deal or no deal? Negotiation 101. Journal of the
American College of Radiology, 13(6), pp.756-758.
Perkov, D., Primorac, D. & Kozina, G., (2016). Business Negotiation as a crucial component
of sales. Economic and Social Development: Book of Proceedings, p.638.
Samsura, D.A.A., van der Krabben, E., Van Deemen, A.M.A. & Van der Heijden, R.E.C.M.,
(2015). Negotiation processes in promotion caimpaigns: an experimental study. Journal of
Promotional Research, 32(2), pp.173-191.
Schuster, P., (2015). Negotiated Transfer Prices. In Transfer Prices and Management
Accounting (pp. 43-50). Springer, Cham.
Sebenius, J.K., (2015). Why a behavioral theory of labor negotiations remains a triumph at
fifty but the labels “distributive” and “integrative” should be retired. Negotiation
Journal, 31(4), pp.335-347.

Appendix I
Communications Log
Template
Date
Communicati
on Method Items Discussed Outcome Notes
12th
June E-mail
Initially introduction of
both the parties were
provided along with
detail relating to
reservation value and
BANTAS. The main
focus was on details
about the product and
manner of promotion
adopted by company. -
The range of ZOPA
was higher than
expectations. Both
the parties discussed
the expected
reservation amount
relating to the
contract.
15th
June E-mail
Offer was provided
which was 5% less than
demanded amount.
Further, some time was
demanded to make final
decision None
Next meeting was
fixed. It was expected
that deal will be
finalized with some
modifications.
17th
June
After discussing all the
relevant facts final
contract of three months
was made for $660000.
However, discussion was
also made regarding
estimated earnings of
campaign but as it were
different from
prospective of both the
parties, no final decision
was been made. Due to
same reason time period
of finalization of
promotion was also not
done. Disputed
Final meeting was
fixed so that
remaining formalities
of contract can be
completed.
20th E-mail Both the parties made Satisfying

June
decision of three month
endorsement duration.
Moreover, date for
initiating the further
procedure was also fixed
so that operations could
be accomplished within
time. results