Sales and Negitiations - Vocabulary 2

Hello students!

Hope you're feeling amazing​!!

By Ana Dávila

So today we're going to continue to learn some vocabulary related to Sales and Negotiation

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by ana davila

Today...

Multiple Choice

Is this the correct definition of: "Ultimatum" A threat of no agreement used to force closure, often expressed as “take it or leave it.”

• TRUE

• FALSE

Open Ended

What is the meaning of : Walk-away

Multiple Choice

What is the meaning of: Winner’s Curse

• ID

• Literally the situation where a party abruptly leaves the negotiating room or “table” and refuses to return.  An example of an aggressive Crunch. (See also Section VII: Conclude and Execution.)

• A negotiation in which both parties strive to reach an agreement that satisfies everyone. Also called interest-based, value-based, and mutual gain negotiating.

• Remorse after reaching agreement that you could have gotten better terms. For buyers and sellers, often referred to as buyer’s remorse and seller’s remorse.

"BATNA" is an acronym which stands for 'Best Alternative to a Negotiated Agreement'. BATNA answers the question: 'What would you do if you were not able to agree to a deal with your negotiation partner?' 

But it is not all. It is also crucial to assess the BATNA of the other side. The weakness of your own BATNA might not matter that much if the other side has no good alternative to doing business with you. 

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by ana davila

BATNA​

is the least favorable point at which one will accept a negotiated agreement. For example, for a seller, this means the minimum amount they would be prepared to accept, while for a buyer it would mean the maximum that they would be prepared to pay.

Unlike BATNA, the Reservation Value is always expressed as a number. It can be the same number that you can get without the negotiation, but it can also mean a different number. For example, imagine you are selling your car. Your relative tells you that he would buy it from you for $10,000 if you are not able to sell it elsewhere. But if you were okay to selling it for $10,000 to your your, you might want other buyers to pay at least $11,000. In this case, the BATNA is selling to the relative for $10,000. But the Reservation Value is $11,000. 

While preparing for a negotiation, it is important to estimate the Reservation Value of your counterpart.

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by ana davila

"Reservation Value"​

"Zone of Possible Agreement (ZOPA)"

Zopa  is the range in which an agreement is satisfactory to both parties involved in the negotiation process. It is the range between each parties Reservation Values and is the overlap area that each party is willing to pay in a negotiation.

Subject | Subject

by ana davila

​Usually, it is not very difficult to find out our BATNA and Reservation Value, but how can we uncover the Reservation Value and BATNA of our counterparts?

​Here is the simple algorithm to follow:

1. Collect all the information you can from open sources and from experts you know.

2. On the basis of the information you collected, make your preliminary assumptions. Try to visualize them in the same way as is shown above.

3. Test and adjust your assumptions during the negotiation round.

Visualizing and testing your assumptions in terms of BATNA's, Reservation Values and ZOPA is a powerful method to improve your performance in every negotiation.