Okay, let's do a little bit of a follow up here, follow-up to the conversation. So
Fred and Jane, they're having a disagreement that's normally what we
call it, maybe you'd even call it a fight if they start yelling at each other, get
angry, I think it's easy to get frustrated. But, in reality they're just
negotiating
so, this is a kind of negotiation. Negotiation have some key parts we want
to remember, let's look at what those key parts are. They include: goals strategies,
issues and planning so, when you have a negotiation it's important to remember
that you have some goals, you have some strategies, you have some issues, you have
some planning. Now, we just saw Fred and Jane, did they have goals? Mmmh!! kind of, Fred
wanted to go overseas, Jane wanted to go to Disneyland, so it's kind of their goal
and remember there another goal was, they want to have a vacation together with
the family, so again that's kind of a goal. But then, did they have a plan?
Did they have a strategy? Then, have those things in fact, they were a little bit just
making things up as they went along.
Did they have an issue that was very clear? Hmm, not really no, so what happens
is they're just kind of talking and that's not a good way to negotiate,
because it means, how are you going to win? This is a key point in negotiation
that we're going to learn about in a minute, how do you know if you win or lose?
Well, you begin with having goals, strategies, issues and planning.
Okay, let's take a look at the parts of a negotiation that we just mentioned, but
let's look a little bit deeper into how they fit together into a kind of a chain
of negotiation.
Okay, what we can look at here is the very first part of the negotiation which are
the goals and then after the goals, you need to work on the strategy, after
the strategy, you need to work on the issues, and after the issues you need to
work on the planning. So, these four parts kind of fit together
before your negotiation begins, not doing your negotiation,
this is not, this is not like steps to a negotiation.
These are actually all inside every negotiation at any time, these are all
inside so, you've got your goals, your strategy, your issues, your planning, this
is all inside of a negotiation. Before your negotiation begins however, if you
want to increase your chance to win, to do better, before the negotiation you
think: what are my goals? What are my strategies?
What are my issues that are important to me? And what is my plan to win this
negotiation, or at least to get what I want? Which is really the key point to
every negotiation, to get what your goals are. So, every negotiation has these parts,
every, every negotiation has goal strategies, issues and planning, but some
people don't do them well, some people try to ignore them, they don't make a
plan, they just start talking maybe that's kind of their plan to make people
confused by just talking a lot. But, you win your negotiation by doing these
better so, in this unit were going to focus on how do we do these better? And
in later units, we're going to focus on each one in detail to show you how to do
that.
Okay, you have some exercises in the book and I'd like you to go ahead, and look at
those exercises, give them a try. These exercises aren't really hard and I
didn't make the exercises to make it hard for you,
the goal is not to be hard, the goal in fact it's not to take a test or to
get the right answer, the goal is to help you think about these ideas for a
negotiation.
Why is this important? Because when you negotiate, it's really key to get your
mind in the right perspective, to get your mind in the right situation so that
you can win. That's a key point, so you can win, so these exercises are made to
help you get ready to get your head in the right space, to get thinking in the
right direction, and to remember some of the words. It's not hard, it's easy but I want
you to start thinking this way, so do some of these filling the gap exercises
which include these gap exercises, go ahead and write up a short answer to
some of these topics on the next page, like 123 and four down there 123 actually,
right? And I want you to begin to think about negotiation, now before I let you go then,
let me go ahead and introduce a little bit more about why we should begin to
think this way. Why for example, pull up my slide here
Okay,
why should we focus on
this part here? Why are there parts of negotiation so important? Why do we
need to pay attention to these parts?
Well, let me begin by maybe just reminding you of some negotiations
you've seen before, maybe you've gone to the night market with your mother or
father or aunt, maybe you've gone to night market with some friends, maybe you've
bought something, or you were with somebody who bought something. You saw them
negotiate really hard, they really focus they really argue, what you thought maybe was
arguing, but actually it was negotiation for a long time. Now, the question is: if you
do go negotiate, how do you know that you're getting something you want ?How do
you know that you win?
Let's say, I go to the night market and I want to buy this cup here and I like
this cup then, so I ask the person in the market and you know, what does this
cup doing? He says well, this cup is great, he tells me the features you can
keep the hot tea hot, you can keep the cold water cold, and has a top, and has a
really good handle on, it can last a long time. I say: "how much is this cup sir?" And
he says: "this cup is maybe 100 NT dollars" and so now, I need to think, do I want
to pay 100? Or do I want to negotiate different price? Of course, if I can
negotiate a different price
what does that mean? If I negotiate a price of 80 then I save 20, and that
person was selling to me, does he lose 20?
Well, he certainly makes 20 less than he would have made if I paid 100, right? If I
paid 100 for this cup, the seller makes 100, the buyer spends 100. By paying 80, the
buyer spends 80, and the seller makes 80, 80 is 20 less but does he lose 20?
right?
You see, I don't know because I'm not the seller, I don't know, we don't know the
price, we don't know the cost, right? So, what happens when you negotiate in a
night market like that, if you say something like I'll give you 80 very
often what does the salesperson says? He says: "huh
It costs me 100, you'd make me lose,
lose 20, I would lose 20". This is a very normal thing to say, right? and
then you say: "oh! I am sorry, I don't want you to lose money ", right?
Do they really lose money? Well, we don't know this is a key part negotiation, the
secret information is secret, we really don't know. I guess we can check, we could
go call up the supplier and ask how much one buys? If one wants to buy this
from the supplier, how much is it? Then we would know, but we usually don't do that,
we don't know. So, I have no way to know if the seller is going to really lose
money but I do know me, the buyer if I pay 80 or I pay 100, the difference is 20 for
sure.
Now, the next question becomes what's the value of this cup to me? What do I think
I get from this cup? Is it worth keeping my tea hot? Is that worth 100? Was it
worth 80? Was it worth 50? Now, here's what we begin to look at these ideas of the
goals, the strategies, the issues and the planning, because if I think about it and
I say: "well, you know, I don't know, I don't care, I just want to pay less, less is
better, right? Of course, if you could give me this cup for free, that would be best.
I don't think, he's going to give me the cup for free, but that would be best,
and so what do I do, I begin to negotiate or in Taiwan we say ..... , right? Cut
down the price, argue with the price, right? And then, sometimes people give you a
rule of thumb, like people save you travel to China and you negotiate, always
cut the price in half, begin at half.
Well, what I'm saying is: how much is this cup worth to me? Now, if i say 100
you know, Mmmh
I have another cup, it's okay, it's not as good as this cup maybe, it doesn't really
keep my tea warm. So, maybe 100 is a little bit too much, if it's 100 I just keep my
other cup, I don't need it. Now, if I want 80 and I say 80 is worth it, I'm
willing to pay 80, because I think keeping my tea warm is worth the 80 and
my other cup doesn't work that good so 80 is my goal. Now, if my goal is 80 and
then I say: "Okay sir, you say 100 I'll give you 80" and then the salesperson
says:" 80, okay".
Sold, what's your first reaction? Your first reaction is huh,
I should have said 60, I said 80 but he gave it to me right away,
obviously I paid too much.
So, here we run into the key point of negotiation. Of course, you can always
feel better, if you get a lower price and of course, you will feel better if you
get something for less and this seller makes less money. Of course, and when the
seller agrees very quickly ,you say: huh,
I should not have done that, why? Because the seller made more than he
expected, he was happy to make that, I could have, I could have made the price
lower and he would have not been so happy, and I would be more happy. So that
always happens, that's always true.
That's the problem in negotiation is: how do you know if you win or lose?
How do you know if you did a good job or a bad job? If you're just waiting for the
seller to say: "OhI okay, I'll give it to you and that's a bad job, then you'll feel
bad. But, what about the cup? Does the cup do what you want? Does the cup do what you
need?
Does this cup keep my tea hot? And is that worth eighty dollars to me? If
that's worth eighty dollars and the salesperson sold it to me for 80, what I
wanted was 80, then actually I should think
good I got what I wanted, it's worth 80 to me for this Cup.
The thing I get keeping my tea warm, better than my old cup that is worth 80
to me, if that's worth 80 to me then I should feel I've won, I've been victorious,
I've done a good job, my negotiation is successful.
Okay well, if I don't think 80 I just think cut the price, cut the price, cut
the price.
How do I know I win? Well, I probably never know I win, unless I get the cup for 0
which is impossible, I'm always going to think I should have negotiated more. and
If I get the price down to 80, and I keep pushing, no 70, I keep pushing no 60,
and maybe sell it to me for 60, I'm still going to say: Oh! I should have held out
longer,
I should have cut that price more, I should have gone for 40, right? So, in
negotiation, the very beginning of a negotiation we don't really know what we
want,
that's not good and at the end of a negotiation we don't know
did we win? Or did we lose?
did I do good? Or did I do bad? Do I need to improve or should I just keep doing it
this way? On the other hand, at the beginning of a negotiation if you set
your goal clearly, what is the value to me? How much do I want to pay to get what
I get from this? Then you negotiate and then you get it, if you get it you can
say I did a good job or I did a bad job. If my value is 80, and I negotiate and the
salesperson only goes down to 90 then I say, that's it I don't want it, because if
I pay 90 that is more than my value, if he goes down to 80 then I got what I
wanted.
If the next person comes and they negotiate behind me, and they get it for 70,
I should still think my goal was 80, I got it for 80 now maybe in the future, maybe in the
future when I negotiate another time, I need to consider the value again
carefully maybe I thought the value was more than its worth to me.
But for now, if I thought it was 80 and I get 80 then that's my goal.
So, in negotiation it's important to think beforehand, what are your goals,
strategies, issues? And then, that will help you come up with your planning to
make a plan. If you have all of these together, well thought out cause you
always have these in a negotiation maybe you don't think about it ,maybe you don't
do it well, maybe you try to ignore it, maybe you're just always trying to go for 0 which
is impossible.
Lower, lower is better, better I guess so but what about your time? What about your
energy? And what about the thing you want to get? So, maybe I argue and I just keep
saying lower, lower, 70, 70 and the man says: "no, I won't give it to you for 70
and then what happens? I have to go home and I have to use my old cup and then I
have to suffer another week or two weeks, or three weeks using my old cup,
it doesn't keep my tea warm and I say : "Oh" ,that really make me angry, I went there, I
spent the time, I came back ,I got to use this old cup and now, I feel it was worth 80.
Instead of fighting for 70, I should've just paid 80, I think you have that
experience too, don't you?
I think we have both those experiences, everybody you go somewhere, you bargain
the seller says: "okay, I'll give it to you and you said" Oh! I bargained,
I gave up too fast, I bargain to easily, I should have fought more or the
other hand, when you bargain really hard and then you go home, you don't buy it,
then you keep regretting, I should've bought it, I wasted time there, I got to
go back again and I feel that I should have just bought it for the other
price. So goal, strategy, issues and planning, this is what I want you to
begin to think about in this class,
don't just go to a strategy code and begin no, think before hand, right? Number
one, you must have something in common,
he has a cup, I want a cup. Number 2, you have to have something that's different.
I want to pay 80, he wants me to pay 100, now you begin, now I think what are my
goals? What are my strategies? What are my issues? What is my plan? Then I execute, when
I'm done, I can go back and say did I get my goals? If I got my goals then that is a
a success, if I miss my goals, how much did I miss by?
How much did I do? That's not good, did I miss it by twenty percent? Did I missed
it by fifty percent? Did I miss it by ten percent? Two percent? And then I can judge
it.
Okay, so that's our beginning of this class, I want you to begin thinking that way,
thinking of goals.
Let's start with goals about that, that's really a good idea, clear, clear goals not
just cut the price, cut the price, cut the price.
Okay, see you next time in our negotiation class.