Negotiation

At the moment, the seller is facing few issues: Firstly, the seller has insufficient cash flow due to Global Financial Crisis; Secondly, the old Subaru have to be sold in one day to pay for the new car, and with the minimum price of $24,000 to lower the new debt and level of repayment on Volkswagen. The purpose of the negotiation is to reduce the liability for the purchase of the new car which have to be picked up tomorrow morning. Due to cash flow issues the seller is requires debt financing for the purchase. Due to the urgency of the issue, the seller have to sell the old car as much money as possible and the payment need to be received ASAP, otherwise he will have to pay more interest. Therefore in negotiating the sale of the old car, Subaru, he needs to present all the cost benefits to whom willing to buy the car and during negotiations, manners are important. You have to appear reliable, confident and calm.

The BATNA was given as $23,000, it is the maximum amount that will be given as a trade in to the Volkswagen dealers in town. Therefore, my resistance point was set as $24,000, which is slightly higher than the price given by the Volkswagen dealers.

An opening offer of &35,000 will influence the buyer’s perception of the seller’s resistance point and provide more bargaining space to ensure the final agreed selling price is most likely to be closer to the target price. The target price was set to $30,000, which is reasonably above the trade in price, from the Volkswagen dealers ($23,000). This would meet the interests of the seller, personal loans could be reduced and also the further interest which have to be paid monthly.

For the concession plan, the process of price concession will show a decreasing trend, from a greater to a smaller number. At the beginning, large decreasing size will appear the impression of sincerity from the seller and this will influence customer with the range of bargaining for the following concession. After few round,...