WHY IS TONY EARNING MORE THAN JOE?
Joe and Tony are salesmen for the Reliance Rug Company. They are paid a standard commission based on the total of their individual sales. Both have the same level of authority to bargain with customers. However, they have different attitudes toward bargaining, and their differences are often reflected in their income. Last year, for instance, they both sold identical amounts of comparable carpeting, but Tony earned about $5,000 more than Joe. See if you can identify why this occurred in the following summary of their respective negotiating practices.
Joe approaches customers as though their only consideration is price. He takes little time to discuss the virtues of the product, and will often offer a discount before it even becomes an issue in an effort to win the customers. Having set the stage for negotiating, he is eager to close the deal quickly, and will make reductions in prices in response to any hesitation by the buyer. Tony makes a strong initial effort to sell the buyer on the benefits of a carpet that will meet the buyer's needs; he feels this is of greater concern to the customer than price. He expects to receive the normal retail price for what he sells, and very seldom volunteers a discount. If the customer raises the issue, Tony will negotiate to assure a sale, but any concession he makes will be small and well earned by the buyer.
Case Assignment- Turn in a 2-page paper (page count does not include cover or reference list) addressing the following questions:
List as many reasons as you can why Tony is earning more than Joe.
Is price the only focus in negotiation?
How can you win customers at a higher price?
Planning and Preparing for Negotiation-Assignment Instructions
Think about a business situation where you need to negotiate. Describe this process and illustrate how the four steps in planning could help you negotiate. Be as specific and detailed as possible.
Consult background readings, browse our library to find more articles, and check relevant websites to support your argument.