MKT 348 Negotiation and the Power 5

Best alternative to a negotiated agreement

What does BATNA stand for?

Good BATNA

You want your counterpart to think you have a _____

Bottom line

Reservation price =

Reservation price

If you don’t receive this price, you are willing to walk away

BATNA plus/minus other issues that make you want to do the deal

Never reveal to counterparty

Power

Possessing knowledge of reservation price =

Nearing an impass

First reason to reveal your BATNA

Have a strong BATNA

Second reason to reveal your BATNA

Target price / outcome

Aspiration level =

As close to your aspiration level as possible

You should remain focused on trying to get _____

Worse outcomes

Focusing on your BATNA rather than your aspiration level will generally lead to _____

Zone of potential agreement

What does ZOPA stand for?

ZOPA

Space between the buyer’s reservation price and the seller’s reservation price

Positive bargaining zone

Overlap means _____ exists and negotiations should yield an outcome acceptable by both parties

Negative bargaining zone

No overlap means _____. Negotiations will reach an impasse if negotiators stick to their reservation price

Anchoring

Setting a boundary that outlines the basic constraints of the negotiation

Relies on common human tendency to focus intently on the first piece of information we are offered and form the negotiation around that price