Question

You are a negotiator for a corporation that operates 12 hotels. You are looking for a chocolate maker to make gifts for your customers. Expect to offer 4000 boxes (4 small chocolates in a gift box) for $ 8.5 per box. However, the chocolate maker makes an initial counter offer of 2,500 boxes for $ 10 a box. As a negotiator, what should you do and what are your arguments and benefits for the chocolate maker to be able to achieve the target as the corporation wants. Any examples in real life to support your negotiation?

Answer 1

Answer :

As a negotiator, following arguments to be communicated with Chocolate Maker :

Sr No	Points to be considered	Arguments as Negotiator	Benefits to Chocolate Makers
1	Advertising Cost	As there are 12 hotels , who wants customize chocolate gift box for its customer , will give a huge base to chocolate maker to advertise there skills at a free cost to the people of the customers of these hotels.	It will save the cost of advertising of chocolate makers. It also increases the customer base for chocolate makers.
2	Long term Contracts and revenue	All these hotels wants to give gift of chocolate box as complementary to the customers , are looking for long term contract with the chocolate makers.	Long term contract will give fixed revenue to chocolate makers.
3	Scope for Increase in Revenue	Initially these hotels wants to give order for 4000 boxes. ( As customer of hotels increases, the order of chocolate gift boxes increases. )	As chocolate makers expect 2,500 boxes order, Hotels wants to give 4,000 boxes initial order. Which gives wide scope for increased revenue to chocolate makers in future also. ( As customer of hotels increases, the order of chocolate gift boxes increases. )
4	Saving in Fixed Cost	As the order of chocolate boxes will increased in the future. It increases the contribution amount which will recover the fixed cost. Therefore Chocolate makers will able to give discount of $ 1.5 per box	Increased contribution will help to recover the fixed cost and , will increase the profit in future.

Therefore, Chocolate Maker can accept initial order of 4,000 boxes for $ 8.5 per box.