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Theme
In past decade or so, in our
negotiations workshops participants
working in purchasing departments
always wanted to know how to
negotiate price in difficult market
situation or with monopolies. They were
often disappointed by the response of
the faculty explaining futility of
trying to beat down the prices
substantially. Fortunately, all is not
lost in such situations and most often
alternatives can be tried to get a
better of one’s rupee. More rigorous
approaches are required to tackle the
price problems in such situations.
This program explores the various issues
one should appreciate about cost, price
and value and underlying principles and
concepts. Cost and price have been
studied in business for more than 100
years by both manufacturing managers and
economists. Open market phenomenon like
demand supply gap and effect of prices
and various associated issues of
substitution or regulation have been
established in assessment of impact.
The trick is in finding ways of
eliminating the monopoly of individual
or the market. Also, one may work around
them. One common objective of planning
is to anticipate the impending
opportunities and threats of market
price to take alleviative measures of
hoarding or a sellout. Professional
buyers and sellers should understand the
dynamics of these phenomena and develop
strategies to counter their impact.
The program covers quite comprehensively
the issues of price negotiation
related concerns of professional buyers
and sellers. This covers issues of cost
assessment, monopolistic pricing,
shortage pricing, development pricing,
pioneering pricing, volume and
utilization based pricing in context of
negotiations. The format of
alternating sessions of exercises and
lectures would help participants
interact more intensely
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Program
Schedule: Day 1: 9-00AM to
5-15PM+ |
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Bargaining
and negotiations
A game of wits followed by
discussions
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Cost based
negotiations
Manufacturing outsourcing – cost
estimation approach – materials,
process, wastage, rejection,
overheads, logistics, etc. -
cost plus approach – issues of
escalation
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Negotiating
when cost is not known
Proprietary products – fancy/
roadside goods – established
branded goods – when nothing is
known
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Costs of
manufacturing
Group work assessment of cost of
two different manufactured
products - exercise and
presentation
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Negotiating
for market driven commodities
The mechanism of demand and
supply gap and the prices – the
positions of producer, trade and
the user – alternatives to
negotiations for better results
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Program
Schedule: Day 2: 9-00AM to 5-15
PM+ |
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Buying
trendy stock in trade
Fashion garment merchandising
decisions – print run of a new
book – balancing the risk with
potential of profit for the
producer, trader and the user
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Exercise
- negotiations in a
simulated market - followed by
position analysis |
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Negotiating
for capital equipment
Concerns of a investor, the
assessment payback – the package
of product, add ons, service and
after sales support – the issues
of compatibility,
standardization, guarantees
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Opportunistic deals
Second hand sales – distress
sales – package deals –
emergency purchase – balance
sheet of gains vs risks
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Pricebergs
and hidden costs
Economies of scale, economics of
need, asset utilization, product
mix, wastage of materials,
volumes of purchase and
production, quality assurance,
system flexibility and
integrated planning, erratic
service
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Essentials
of approach
Mindset – power of knowledge –
what is ‘low’ or ‘high’ –
concept of ‘Value’ in economics
– can one work against own
interest? – layers of price and
Bare bone negotiations – ‘make
hay while sun shines’
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