Business negotiations

arto.kuuluvainen@turkuamk.fi and timo.holopainen@turkuamk.fi

Getting to know each other

Who are you

Where are you from

Why are you here

One negotiation story

Course objectives

• Students active listening, negotiation and presentation skills will develop.

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• After course student can
• handle different negotiation situations
• handle negotiation techniques
• handle different type of negotiations

timo.holopainen@turkuamk.fi

Formation of the grade (to be updated)

To pass, all above elements need to be participated/passed 50 %

Content and timing of the course

Session 1: Negotiations: Theory, Online, Batna

• Negotiation structure
• Techniques
• Deal/No Deal/Batna
• Tradeables/Objection handling
• Closing

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Home assignment: Each team prepared 15 minutes training session from 2 Harvard manuals for next time

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Session 1: Negotiations: Theory, Online, Batna

“Everybody Lies”

“Devil is in the details”

“Defend your negotiation area”

10 biggest Negotiation mistakes

Negotiation

Tradeables

• 7 P: Price, Place, Product, Promotion, Process, People involved, Physical evidence
• Physical: Price, Features, Quality, Duration
• Value related: Need, Benefit, Value
• Terms and conditions: Changes, Delays, Delivery, Faulty, Insurance, Financial (payment, discount, term, penalty, currency), service, replacement
• Terms of trade: Responsibilities, Conditions, Warranty, Tax, conditions, Force Major, Legal, Delivery options

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10 biggest Negotiation mistakes

1. Lack of goals and strategy

2. Winging it

3. Being too informative versus persuasive

4. Misusing the allocated time

5. Providing Inadequate support for your claims

6. Being emotional or culturally inappropriate

7. Relying too much on aids/technology/features

8. Distracting gestures and body language

9. Inappropriate approach

10. Failing to close

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Terri L. Sjodin

Negotiation mapping

8. Close decisively. If no deal, handle objections professionally and propose next steps

Objections

• Needs
• I do not need this
• Products
• Your product is worse because…
• Source
• I do not like you
• Time
• I need time to think
• Price
• The value does not exceed the cost
• Other
• Competition has a better product

Objection handling

• Compensation
• Yes, but…
• Referral
• Mr. Timo felt the same way 1^st time…
• Revisit
• Turning into reason..
• Acknowledge
• I understand (Pause)…Where we were…
• Postpone
• Can I get back to this…

Confirmation!!

Session 2: SEASAC sales competition Judging�

Judging SEASAC competition

Session 3: Learn by teaching: Harvard�

• Each team makes 15 minutes training session from 2 Harvard manuals

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Home assignment: Giving Interviews and questionnaire activity for same teams

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Session 4: Guest lecture FHWN Sales Psychology

Guest lecture

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Online

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Home assignment: Giving practice case for next week

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Timo´s Tripod exercise

timo.holopainen@turkuamk.fi

Background and Set up

• Tripod exercise is designed to enchance the learning related to Negotiation practicing
• It is a role-play, where three roles exists: Seller, Buyer and Observer
• Role-play is based on a pre-written case, preparation done based on it and evaluation, which is done based on pre-set evaluation sheet
• Case is given beforehand and everyone does preparation in groups
• Exercise is repeated at least 3 times, all members having 3 different roles at least once.

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timo.holopainen@turkuamk.fi

Case

• Written beforehand, preferably from real product
• There is two cases:
• Selller case for competitors
• Buyer case for buyers, which has all seller information plus additional information for buyer
• Seller case is given to everyone beforehand for meeting preparation
• Option 1. Buyer case is given to each buyer beforehand
• Option 2. Buyer case is given to everyone beforehand
• Option 3. Buyer case is not used

timo.holopainen@turkuamk.fi

Evaluation and feedback

• Done with pre-set criteria
• Evaluator uses evaluation sheet and after roleplay gives feedback to the Seller
• The areas to be assessed in the sales situation are
• Starting the negotiation
• Need identification
• Presenting the solution
• Handling of objections
• Closing
• Salesperson’s interpersonal skills and expertise

timo.holopainen@turkuamk.fi

Tripod set up and execution

• Exercise is done 3 times and by rotating roles
• Each sales situation lasts pre-set time, like 20 minutes
• After each performance feedback for 5 minutes to seller by observer

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Student 1

Student 2

Student 3

Roles, Student 1

1st round Buyer

2nd round Observer

3rd round Seller

Roles, Student 2

1st round Seller

2nd round Buyer

3rd round Observer

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Roles, Student 3

1st round Observer

2nd round Seller

3rd round Buyer

timo.holopainen@turkuamk.fi

Tripod set up and execution

• Exercise is done 3 times and by rotating roles
• Each sales situation lasts pre-set time, like 20 minutes
• After each performance feedback for 5 minutes to seller by observer

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timo.holopainen@turkuamk.fi

Practical view

• Exercise will take quite a bit of time. If the sales situation is 20 minutes and feedack is 5 minutes, total time used for exersice is 20+5+20+5+20+5, totalling 75 minutes

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• To make the roleplay to work, proper prepation is needed, like 45 minutes

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• To add interest, one can give different profiles for buyers 2 and 3, like nationality or personality or totally new information

timo.holopainen@turkuamk.fi

Session 5: Practice

• Time to prepare
• Running the exercise
• Feedback

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Home assignment: Different Negotiators

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Session 6: Different negotiators

• Way for teams to present
1. Different negotiator types/personalities
2. Different countries/cultures
3. Effect of dress code
4. Different negotiation tips
5. Different techniques/strategies

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Free style, 15 minutes, must leave something behind

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Home assignment: Different negotiations

Lewis, R.D.: When Cultures Collide

Lewis Model: Cultural types

Linear-active cultures

• Task-oriented and result oriented , highly organized planners
• Complete action-chains by doing one thing at a time,  with a linear agenda.
• Prefer  direct discussion, sticking to facts and figures from reliable, written sources.
• Speech is for information exchange , talk and listen in equal proportions.
• Truthful rather than diplomatic and do not fear confrontation,
• Sticking to logic rather than emotions, partly conceal feelings
• Value a certain amount of privacy
• Move quickly forward, compromising when necessary to achieve a deal.

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Reactive cultures

• Listen and focus on the speaker is saying, rarely, if ever, interrupt a speaker
• Take time to respond to show respect
• Limited small talk and eye contact, passive or ‘roundabout’
• General aim of politeness.
• Context-centred, assume high level of knowledge
• Utilize silence, take time to think
• Communication is monologue – pause– reflection–monologue
• Subtle body language

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Multi-Active cultures

• Talkative and impulsive
• Great importance to feelings, relationships and people-orientation
• Do many things at the same time
• Conversation is roundabout and animated and they try to speak and listen at the same time
• Interrupt frequently, pauses in conversation are few.
• Uncomfortable with silence and seldom permit or experience it

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Lewis, R.D.: When Cultures Collide

Lewis, R.D.: When Cultures Collide

Negotiator types

One Personality profiling: Thomas

High�Dominance:

Hallitsevuus

High�Compliance:

Myöntyvyys

High�Steadiness:

Pysyvyys

High�Influence:

Vaikuttavuus

Fact Centered

People centered

Proactive

Reactive

Session 7: Different negotiations

• “Panttivankidialemma”

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Home assignment: Competition case

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Session 8: Negotiation Challenge

• Online
• One round
• Winner of each round advances to European Competition

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Turku Negotiation Challenge

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Turku rounds

• 8 rooms
• 1 buyer/room
• 40-48 competitors
• 3 judges/room
• Sales situation 20 min/participant

Announcing European competitors

• 16 participants
• Announcement in the afternoon
• Semifinals on next day

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European Challenge, 1st round

• 4 rooms
• 1 buyer/room
• 16 competitors
• 3 judges/room
• Sales situation 20 min/participant

Announcing finalists

• 4 participants (1/semi-final)
• The finalists choose a sparring partner from the dropped out participants.

The finals

• 4 participants
• Each finalist have 1hour to prepare
• Sales situation 20 min
• The sales situations are live

Kiitos

Thank you! Grazie! Tack! Shukran! Merci! Danke! Dank U! Paldies! Takk! Gracias! Efharisto! спасибо! Hvala! Dziękuję! Obrigado! Aitäh! Tak! Köszönöm! Sağol! хвала! Ačiū! Děkuji! Mulțumesc!谢谢! благодаря! Cảm ơn bạn! 고맙습니다!