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Malhotra and Bazerman, “Introduction: Becoming a Negotiation Genius” (p. 1-11) and “Claiming Value in Negotiation”

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Roosevelt Photography marketing case

• situation: need to pay at least $3 million for the photography or reprint 3 million copies
• solution: provide value to the photographer and ask him to pay to print

"Planning to distribute three million copies of campaign speech with photographs. Excellent publicity opportunity for photographers. How much are you willing to pay to use your photographs? Respond immediately."

The photographer did not take long to issue a reply. He sent back a telegram with the following message: "Appreciate opportunity, but can only afford $250."

value is whatever people find useful or desirable, can be money, utility, happiness and so on.

question to ask yourself:

1. would you make the first offer?
2. what information will you share with her?
3. what information acquire from her?
4. how much do you expect to earn from the sale?
5. how do you know it’s a good deal or not?

Preparing to negotiate

1. BATNA: Best Alternative to Negotiate Agreement - the reality you will face if no deal in current negotiation
   • BATNA assessment:
     1. identify all alternatives
     2. evaluate cost of each
     3. pick the best alternative
2. RV: reservation value - lowest offer you are willing to accept; “indifference point” - between BATNA and accepting the offer
3. Evaluate the counterparty’s BATNA
   • Roosevelt case: he didn’t focus on his own BATNA, he focused on the photographers
4. evaluate the counterparty’s RV
   • in RE case: what would the buyer do with the property? if they do luxury condo, a 20% will be added to their purchase
5. ZOPA: Zone of possible agreement