Negotiation Utilizing Class Skills

Negotiation skills are important for various situations in life. Acquiring these skills early in life greatly reduces the chance that one will be taken advantage of by unscrupulous individuals. Negotiation skills can be used in the business environment as well as everyday life. For these reasons there is great value placed on having negotiations skills. The purpose of this discussion is to explain the use of negotiations in the context of a real-life scenario.

Description of the situation Negotiation is always a tricky endeavor and the purchase of a new home or vehicle can be particularly problematic. This discussion will focus on the purchase of a new car. The vehicle is a 2011 Acura TL purchased at the Fountain Acura Dealership. I also have a vehicle that I hold the title to that I wanted to use as a trade-in so the cost of the vehicle could be offset.

Preparation for the Situation The first step in my preparation process was to look at reputable reviews concerning that 2011 Acura TL. For such a review I headed to Edmunds online car reviews. I chose Edmunds because it has been established as a company that gives unbiased reviews of the latest cars. When I researched the car I found that "fault.

It has compelling performance, perfect crash scores, a spacious interior, solid build quality and plenty of the latest technologies ("2011 Acura TL")." The aspect of the review that struck me was the perfect crash scores. Safety is of the utmost importance to me and knowing how well this car has done in crash tests made it extremely appealing. In addition the site reports "The base model 2011 Acura TL is front-wheel drive and is powered by a 3.5-liter V6 that produces 280 horsepower and 254 pound-feet of torque. A five-speed automatic is standard.

In Edmunds performance testing, the base TL went from zero to 60 mph in 6.7 seconds -- on par with most base model luxury sedans. EPA-estimated fuel economy is 18 mpg city/26 mpg highway and 21 mpg combined ("2011 Acura TL")." These factors were also important in my quest to purchase a new car. I also compared the Acura to other cars in the same class. I discovered that as it relates to safety, reliability and the ability of the car to hold its value -- it is one of the best in its class.

As such I made the decision to purchase the 2011 Acura TL. In preparing for negotiations I took care of some practical and extremely important concerns. Namely, I sought to discover the value of my trade in and the value of the car that I wanted to purchase. A 2011 Acura TL is $35,305 for the base model and my trade in is worth $7,000 according to the Kelley Blue Book value. It was important to know these values so that I could negotiate a fair and accurate price for both vehicles.

Understanding these numbers lessened the likelihood that I would be taken advantage of. I also wanted to know these numbers so that I would not allow my desire to have the new car overtake me and inadvertently pay too much for the vehicle or receive too little for the trade in of my old car. I knew that I did not want the negotiations to fail so I was certain to set clear objectives.

I did this by establishing how much I could afford to pay each month and in so doing establishing how much I needed to get for my trade in to offset the cost of the purchase of the new vehicle. I can only afford to pay $33, 000 for the vehicle before the additional $7,000 is subtracted from the trade in. The total cost would be $26,000 and this would be the amount financed. I also knew that I would still have some additional amount to pay related to taxes and tags.

I was also adamant about understanding the strengths and weaknesses of my position and the position that the salesperson might have. My strengths are that the market is still struggling to recover and as such car sales have decreased. The salesperson has likely struggled harder to make money from commissions. If I can be persuasive in my argument that the car should be sold below the retail price I am likely to have very little problem getting the car.

I could also argue that the price I am asking for the car is not that far from the retail price. Prior to entering the negotiations I wanted to make sure that all of my information was correct and I did not have to depend on being "quick and clever" during the actual negotiation. For this reason I imagined different hypothetical issues that could arise during the negotiation so that I would be ready and prepared to present my case.

I also believed that the salesperson might be dissuaded from meeting my price because it would mean a lower commission. I reasoned that having a lower commission would be better than having no commission at all. I also worked on what I wanted to communicate to the dealer. The first step in this communication was to identify the goal of the conversation or what I wanted to achieve through the negotiation. My goal was the purchase of a 2011 Acura TL at a fair and reasonable price.

To achieve this goal I clarified my thoughts before speaking with the dealer. In this situation this meant knowing the price and the specs the car should have at the established price. I also had to keep in mind the price of the trade in and how much I wanted to spend per month on a car payment.

In preparing to communicate with the car dealer I also took into consideration where I would be buying the vehicle and the context of buying a new vehicle from a dealership as opposed to buying a vehicle from a private owner. With these things considered it was important for me to research and find out whether or not the dealer was offering any incentives such as cash back or 0% interest for a certain number of years when financing a vehicle.

This particular dealer was in fact offering 0% financing for up to five years for qualified buyers. When negotiating I wanted to be sure that this incentive was offered to me. Nonverbal communication was also an aspect of communication that I took into consideration when preparing to purchase this vehicle. Factors such as eye contact and a handshake were taken into consideration and I planned to have good eye contact with the salesperson and a firm handshake.

All of the information that I gathered from my research into how much the car should cost was what I planned to use when conveying something of value to the salesperson. I wanted the individual to know that I came prepared to make a deal and that I knew how much the deal should cost me. I also went back over the prices for the trade in and the new vehicle so that I was ensured that I had a firm understanding of the appropriate price points.

Lastly I wanted to ensure that all of my actions were reflective of wanting to negotiate with the salesperson. I was prepared to be dressed appropriately and to make a good first impression. I wanted the salesperson to know that I was not there to waste his or her time. Summary of the Exchange I entered the Fountain Acura Dealership lot on a Thursday afternoon and parked my car. I began to look around and I saw salesperson coming toward me.

As he approached me he proceeded to extend his hand to greet me and he told me that his name was Tom. I made eye contact with him and gave him a firm handshake. He asked me what he could help me with and I told him the make and model of the car I was looking to purchase. One I told him what I was looking for, he proceeded to tell me why the car was a good buy and all the specs that the vehicle had to offer.

He also let me know of the incentive of 0% interest being offered at the dealership on 2011 vehicles. During this entire exchange we were making our way to the specific vehicle that I wanted to purchase. I checked the specs and the price listed on the window. The price was $5,000 more than I was willing to pay. The salesperson asked me if I wanted to test drive the vehicle and I let him know that I would like to take in on a test drive.

He went back insode the dealership to retrieve the keys so that the car could be test driven. We drove the vehicle for about 20 minutes. I enjoyed the way the vehicle rode and I was even more excited about the prospect of purchasing the vehicle. When we arrived back to the dealership we went into Tom's office to discuss the price and the amount that I could get for my trade in. First we discussed the amount I could get for my trade in.

The salesperson looks my car over and agrees that on the trade in price of $7,000. I wasn't surprise by this because the car is in very good condition and this is reflected in the appearance of both the inside and the outside of the car. When then discussed the price of the new car. He quoted me a figure of $35,000. I then presented a counteroffer of $31,000 and he countered with $34, 500. I responded with an offer of $31, 750.

He then told me that he needed to speak with his manager to see how low he can go on this particular vehicle. When he came back he asked how much I was willing to pay for the vehicle, I responded with $32,500. His counter offer was $33,000. This would bring the total cost of the car before taxes and tags to $26,000. This was the amount I could afford to pay and that I planned to pay. I accepted the offer and took delivery of the new car the next week.

At the end of our exchange Tom thanked me for my business and seemed impressed with my negotiation skills. He also seemed pleased with the sale and did not appear to be agitated by the way the negotiations went. I was also excited about the outcome and I felt a sense of accomplishment. Analysis of the Situation Intuitive Overall the situation went well and many of the issues that I anticipated did not arise.

I maintained eye contact and I knew exactly what I wanted and how to articulate what I wanted to the sales person. In addition I did not become impatient during the negotiation process. I stood my ground and paid what I had planned to pay for the car in addition a received the amount I planned to receive for my trade in. I am glad that I was prepared and I knew how much was appropriate to spend on the vehicle.

There isn't much that I would change about how the negotiations went. Perhaps I would try to get an even lower price, but I felt the price that I paid for the car was fair. The price was also fair to the salesperson, I wanted him to still get a decent commission on the car and as such I didn't try to negotiate further. Overall I wouldn't change the way that I prepared for the negotiation or the outcome of the negotiation.

I feel as though the interaction was not controlled by either party. It seemed as though both of us had firm ideas concerning how the interaction would go and we proceeded accordingly. Of course the salesperson is a trained negotiator so his opinion of the interaction may be different from mine. There was give and take on both ends of the negotiation but in the end I received what I wanted and the goal that I established in the beginning was accomplished.

My behavior seemed to affect the other party in a positive way. Tom understood that I had a clear understanding of costs and that I was serious about buying a vehicle but that I wouldn't pay the sticker price for the vehicle. He also understood that I would not take a low value for my trade in. With this information the manner in which he negotiated was consistent with what he understood about my reason for being at the dealership and he acted accordingly.

Even though my behavior seemed to have some positive impact on Tom, the truth of the matter is "we can't make these things happen. We can't change someone else's mind or force them to change their behavior. If we could, many difficult conversations would simply vanish. Changes in attitudes and behavior rarely come about because of arguments, facts, and attempts to persuade. We can have an influence, but here we need to be especially careful. The paradox is that trying to change someone rarely results in change (Stone et al.

2003, 137-138)." I believe that Tom had some idea of how much the transaction would be early on in our conversation. He saw me pull up in a car, which he probably knew the value of and when I told him the car I wanted to buy who likely knew the price range in which it would sell for. My behavior may have dictated the pace and energy of the negotiations but Tom had some idea of how the transaction would end.

I was somewhat surprised at my own behavior in that I remained calm and I stuck to the price I established when preparing for this transaction. I did not become discouraged when the first counteroffer was not consistent with the price that I had in mind. I knew that this tactic would likely be used to get me to pay a higher price. As such I was prepared to counteroffer until I received the price I was willing to pay for the vehicle.

From this experience I learned the importance of preparation. Had I not been prepared I could have gotten swindled and paid much more for the vehicle. In addition being prepared assisted me in remaining calm and ultimate meeting the goal that I established. This situation also taught me that I have the ability to negotiate in a way that is effective without being condescending toward the other party. I think this is important in business and in life because it speaks to ones character.

I learned there is a way of getting what you want without making the situation difficult for the other party in the negotiation. There is a balance that can be struck where both parties can be happy with the outcome; truthfully, this is what negotiation is all about -- finding a happy medium. I learned that other people also have needs in the negotiation process. For instance, Tom can't just give the car away for any price because there are certain cost that need to be covered.

In addition he has to make money, after all this is his job. Understanding this about Tom is what stopped me from trying to negotiate a lower price. Systematic Analysis One of the main theories that applies to my situation is principled negotiation. Principled Negotiation is defined as "an interest-based approach to negotiation that focuses primarily on conflict management and conflict resolution.

Principled negotiation uses an integrative approach to finding a mutually shared outcome ("Principled Negotiation")."More specifically in preparing for, engaging in and evaluating the outcome of the negotiation I saw understood the positive outcomes that would come about if I was prepared and took interest in how I was going to negotiate for what I wanted while also creating an outcome that was mutually beneficial. Indeed the negotiation was successful in that it ended in a win-win situation. Another valuable tool discussed in the course was planning.

Throughout this negotiation process I found that planning made a significant difference in both my behavior and my outcome. Through planning I was able to anchor my emotions over having a new car in the truth of how much I could.