Reference no: EM132755498

1. Identify the item for your negotiation preparation. This should be something that market or competitive information is readily available on. Examples: new or used car, home, vacation package, or commonly traded commodity such as steel or copper. Prior to doing any research, what is your target price you expect to pay for the item?

2. Develop accurate requirements for the item you are researching. Be specific. Make sure to differentiate between wants versus needs for the item and explain why items are necessities and why they are simply wants. Identify items that you would be willing to give up during negotiation to ensure a specific need or to reach your target outcome. If there are items beyond price that would factor into your negotiation be sure to detail them here.

3. Create a list of acceptable alternatives to your negotiated item. This may include similar items that are not exact replacements for your item; such as a different model car. Examine these alternatives and explain why your chosen item is the most acceptable choice for you. Use research and market data to compare alternatives. Make sure to site sources. Determine what would be an acceptable negotiation outcome for this item to you. Support your acceptable outcome with data and make sure to cite sources.

4. Based on your list of acceptable alternatives, determine your reservation price (the price at which you walk away from the deal) and support how you determined this figure. Your reservation price and acceptable outcome price will be different.

5. Clarify who the opposing side of this negotiation will be. Be as specific as possible. If negotiating a new car, what dealership? Assess the opposing side's strengths and weaknesses in the negotiation. Identify factors that increase the opposing side's bargaining strengths and factors that increase your bargaining strength. Discuss the bargaining authority held by each side and what factors could affect the bargaining authority for the negotiation. Identify any roadblocks that may prevent the closure of the negotiation.

6. Summary. What did you learn during your research? Did the research cause you to change your original requirements at all? How accurate was your original expected cost for the item compared to your acceptable negotiation price?