MBA506: Negotiation Report on Kobe Bryant Endorsement Campaign

This report analyzes a negotiation scenario for a celebrity endorsement contract, focusing on the negotiation between DeGrandis Sporting Goods and Elite Sports Stars for Kobe Bryant's endorsement. The report details the application of negotiation concepts such as BATNA (Best Alternative To a Negotiated Agreement) and ZOPA (Zone of Possible Agreement) to determine the reservation values of both parties. The student, acting as an agent for DeGrandis, negotiates the contract fee and campaign duration, utilizing email communication to propose terms and conditions. The negotiation involves strategies to secure a favorable contract, including a contingency clause linked to product sales revenue. The final agreement encompasses the contract terms, including fees, campaign period, and responsibilities, including the provision for a rebate or surcharge based on sales performance, and the inclusion of a restraint clause, as well as clauses for expenses related to the celebrity. The report reflects the student's understanding of negotiation principles and their practical application in a real-world scenario.

Running Head: NEGOTIATION
NEGOTIATION
Name of the Student
Name of the University
Author’s Note

1NEGOTIATION
STAGE 1:
1:
BATNA means the Best Alternatives to the Negotiated Agreement. It is the best
alternative available to the party if the negotiations do not succeed and the meeting of the minds
of the parties cannot be concluded. According to Pinkley, Conlon, and Sawyer 2017, it can be
explained that BATNA may not be admissible at the time of ongoing negotiation but is attained
through its impact on the process of negotiation in due course of bargaining between the parties.
However according to Sebenius 2017, BATNA can be explained as the most successful practice
in the concept of negotiation and bargaining. As explained by Brett and Thompson 2016,
BATNA is explained as the assessment of socio-environmental factors depending on reputation,
relationship, gender, status and culture based on which the BATNA value is assessed. As
explained by Marsden and Siedel 2017, the concept of BATNA can be divided into two
fundamental strategies: firstly being the distributive strategy which aims to claim maximum
value and second is the integrative strategy which aims to identify the interest of both the parties
and integrate them to reach a possible and the best outcome without compromising any party’s
interest or benefits from such agreement. Ury 2015 has established the step wise recognition of
the strategies related to the BATNA and reaching a negotiated price along with other terms and
conditions of the contract.
In the given scenario, following is my client’s BATNA and their reservation value:
 The contract fee offered by alternative sports star, LeBron James is 823,530$.

2NEGOTIATION
 The contract fee can be negotiated for fee down value at the rate of 15% amounting to the
reduction value of 123,529$.
 The final amount payable by us shall be 700,000$ which is the reservation value that
shall be payable by us to LeBron James and Kobe Bryant.
 The BATNA for us is either LeBron James would accept our negotiated offer or we
negotiate a contract fee with Kobe Bryant.
2:
BATNA or the Best Alternative To Negotiated Agreements relate to the alternative
course of action for the process of negotiation in a agreement between two parties (Spangler
2003). Knapp et al 2015 talks about detailed course to assess every aspect of situation leading or
eligible for negotiation. Further according to Graham 2019, the theory of negotiation should
involve a third approach dealing with the concept of split-the-difference which coincides the
concept of fair dealings along with negotiable agreements. However, negotiation is not all about
situational analysis but also involves the effective involvement of emotional intelligence of the
parties to negotiate or influence the other party in accordance to their own terms and conditions.
According to Kelly and Kaminskiene 2016, the importance of negotiation and mediation has
been explained with reference to the application of emotional intelligence and worth of the
opponents. According to Greenberg 2019, it can be explained that the BATNA has evolved with
changing time and the changes basically include the assessment of the merits of settlement by the
parties based on which legal negotiation and mediation is prepared by the lawyers, and the same
shall be adjudicated as the best alternative to a negotiated agreement.
In the given scenario, the other party’s BATNA and reservation value are:

3NEGOTIATION
 LeBron James can either accept out negotiated value and form the contract with us for the
advertisement campaign or negotiate with other companies, as they are not in the rush.
 Kobe Bryant can either accept our contract free or negotiate with other companies as they
are not in rush.
 The reservation value for them is 700,000$ which is the minimum value as payable by us
to both the parties.
3:
ZOPA or Zone of Possible Agreement is the zone between the parties existing between
the sale and the negotiations for sale where the minimum targets of the parties are met.
According to Jeong 2016, it can be explained that if reverse of bilateral agreements is not
possible, then negotiations can be in a series of cross connections involving strategies with
respect to expansion of minimum targets between the parties. As explained by Zartman 2016, the
situation where ZOPA is absent, such agreement is not possible. The basis of negotiation is the
minimum target that should be fulfilled by the dealing (Petukhova and Bunt 2017). As explained
by Zheng and Negenborn 2015, ZOPA is the negotiation driven mostly by the elasticity and
uncertainty of demand and supply. According to Yip and Schweinsberg 2017 it has been stated
that emotional intelligence is important while negotiating because anger expressions can lead to
exiting of the party from negotiations.
In the given scenario, the best strategy is to bargain the price which falls below the
reservation value which amounts to 700,000$ so that the minimum amount payable remains
within the budget including the expenses and other negotiated values and statutory expenses.

4NEGOTIATION
STAGE 2:
DATE:
5/10/2019
COMMUNICATION METHOD:
E-mail.
ITEMS DISCUSSED:
The contract fees of LeBron James was negotiated at the rate of 15% reduction rate so
that the amount payable by us amounts to 700,000$. Further discussion was held for the
negotiation of the length of the period of campaigning the advertisement. During the negotiation,
the other party may suggest for a period of not more than 2 months. However, we may negotiate
that any period for less than three months would result in loss to our enterprise. However, with
only one month of campaign, our loss would be maximum and it shall be minimum at two
months amounting to an approximate of 250000$. However, at three months, it shall be neutral
for us. Only at fourth or fifth month, we would advance profits based on the campaign and our
sales. Thus, our recommended period for campaigning shall be anytime between four to five
months minimum so that the company may earn profits with such campaign.
OUTCOME:
The party may or may not agree to our price of 700,000$.
NOTES:
The party may agree to the reduced price or they may propose a negotiated price of their
own after considering our negotiation provisions. With respect to the length of period of

5NEGOTIATION
campaigning, the other party may think and consider four to five months so that the parties can
meet their minimum targets without overlapping the elasticity of demand and supply (ZOPA).
DATE:
2/10/2019
COMMUNICATION METHOD:
E-mail.
ITEMS DISCUSSED:
The contract fee of Kobe Bryne was proposed by us at 700,000$ along with the length of
the period of campaigning with at least of four to five months. This is so because any period less
than three months would be a loss for the enterprise and the third month would be neutral for our
accounts. It is only at the end of the fourth and the fifth month that we estimate profits to be
added to accounts. With huge investments and celebrity advertising campaign, we would also
have minimum target to earn some profit while the campaign is on the run.
OUTCOME:
The party has agreed to our terms and conditions of the contract.
NOTES:
The party may either respond or choose to negotiate with us along with other parties for
Best Alternatives.
STAGE 3:
RAVAN SAI

6NEGOTIATION
Email: [e-mail]
2nd October 2019
By email: [e-mail]
Mohit Sharda
Chief Executive Officer
ELITE SPORT STAR
Dear Mohit,,
RE: NEGOTIATION FOR KOBE BRYANT ENDORSEMENT CONTRACT
Thank you for your instructions.
I wish to confirm that we would be happy to join hands with you for the advertising
campaign of our company with Kobe Bryant. However, we would like to discuss the
terms of the contract as follows:
 Parties: the parties to the contract are Elite Sports Stars and DeGrandis Sporting
Goods for the purpose of endorsing our basketballs.
 Purpose of the contract: the contract is made between the parties for the
purpose of endorsing the basketballs of DeGrandis Sporting Goods.

7NEGOTIATION
 Period of Campaigning: The period of campaigning has been initially decided to
be five months based on the minimum target of DeGrandis Sporting Goods for
profit earning.
 Extension: The period of campaigning may be extended as and when agreed
upon by the parties after the completion of 5 months.
 Contingency Clause: If the product sales revenue generated from the
advertising campaign is less than 1.1 million$, Elite Sport Stars agrees to pay
DeGrandis Sporting Goods a rebate of 500,000$. If the product sales revenue
generated from the advertising campaign is more than 1.1 million$, DeGrandis
Sporting Goods agrees to pay Elite Sports Stars a surcharge of 500,000$.
 Consideration: The DeGrandis Sporting Goods agrees to pay Elite Sports Stars
a sum of 700,000$ for the service of Kobe Bryant received from Elite Sports
Stars against advertising campaigns.
 Restraint Clause: Elite Sports Stars shall be prohibited from extending the
services of Kobe Bryant to other companies during the entire period of contract
with DeGrandis Sporting Goods.
 Any negotiation on the basis of consideration amount shall not alter other terms
and conditions of the contract.
 All travelling, accommodation and grooming related expenses shall be borne by
DeGrandis Sporting Goods. However, only those expenses shall be borne which
are related to the campaigning purposes.
 The Celebrity is entitled to bring along his security, personal trainer, personal
chef and personal groomer for the purposes of the contract. However, the

8NEGOTIATION
expenses of the security, personal chef, personal trainer and personal groomer
shall be borne by Elite Sports Star including their accommodation and travelling
expenses.
 The celebrity is expected to be in good conduct and maintain morality during the
entire period of the campaign.
We hope the terms and conditions of the contract has been expressly laid down in
the letter and the acceptance shall be expressed by the email. Until the acceptance
email is sent by Elite Sports Stars, the contract shall not be enforceable. We shall be
waiting for your acceptance.
For any query, you can contact me on my email or call on my number [phone]
during business hours.
Thanks,
Yours Sincerely,
Ravan Sai,
(Agent for DeGrandis Sporting Goods)

9NEGOTIATION
REFERENCES
Brett, J. and Thompson, L., 2016. Negotiation. Organizational Behavior and Human Decision
Processes, 136, pp.68-79.
Graham, J.L., 2019. A third theory: inventive negotiation. Journal of Business & Industrial
Marketing.
Greenberg, E.E., 2019. The Changed BATNA. NYSBA New York Dispute Resolution
Lawyer, 12(1).
Jeong, H.W., 2016. International negotiation: process and strategies. Cambridge University
Press.
Kelly, E.J. and Kaminskienė, N., 2016. Importance of emotional intelligence in negotiation and
mediation. International Comparative Jurisprudence, 2(1), pp.55-60.
Knapp, B., Bardenet, R., Bernabeu, M.O., Bordas, R., Bruna, M., Calderhead, B., Cooper, J.,
Fletcher, A.G., Groen, D., Kuijper, B. and Lewis, J., 2015. Ten simple rules for a successful
cross-disciplinary collaboration.
Marsden, G.J. and Siedel, G.J., 2017. The Duty to Negotiate in Good Faith: Are BATNA
Strategies Legal. Berkeley Bus. LJ, 14, p.127.
Petukhova, V., Bunt, H. and Malchanau, A., 2017. Computing negotiation update semantics in
multi-issue bargaining dialogues. Proceedings of the 21stWorkshop on the Semantics and
Pragmatics of Dialogue (SemDial 2017-SaarDial), Saarbrücken, Germany, pp.114-124.

10NEGOTIATION
Pinkley, R.L., Conlon, D.E., Sawyer, J.E., Sleesman, D.J., Vandewalle, D. and Kuenzi, M.,
2017. Unpacking BATNA Availability: How Probability Can Impact Power in Negotiation.
In Academy of Management Proceedings (Vol. 2017, No. 1, p. 16888). Briarcliff Manor, NY
10510: Academy of Management.
Sebenius, J.K., 2017. BATNA s in Negotiation: Common Errors and Three Kinds of
“No”. Negotiation Journal, 33(2), pp.89-99.
Spangler, B., 2003. Best alternative to a negotiated agreement (BATNA). Guy and Heidi
Burgess, eds, Beyond Intractability. Conflict Research Consortium, University of Colorado,
June.
Ury, W., 2015. Getting to yes with yourself:(and other worthy opponents). HarperCollins.
Yip, J.A. and Schweinsberg, M., 2017. Infuriating impasses: Angry expressions increase exiting
behavior in negotiations. Social Psychological and Personality Science, 8(6), pp.706-714.
Zartman, I.W., 2016. Diplomacy and Negotiation (pp. 207-19). London: SAGE Publications.
Zheng, S. and Negenborn, R.R., 2015. Price negotiation between supplier and buyer under
uncertainty with fixed demand and elastic demand. International Journal of Production
Economics, 167, pp.35-44.

11NEGOTIATION
Yours sincerely,
[Your name]