Coffee Contract

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The strategy was to explain to my counterparty the situation that I was in and why I was looking to change my coffee supplier, mainly focusing on the fact that my current supplier satisfies my needs but I’m considering Anderson product because I believe their product is of higher quality. However, I choose not to disclose any details with the current supplier. Preference was clear to switch to Anderson but price was way too high but it would be advantageous for Anderson to lower their pricing due to brand recognition and appraise for quality which could be a big outcome of affiliation of both the parties, as Statler Hotel serves and is staffed by many current and future hospitality mangers.

Briefly describe the negotiation interaction and process:

The tactic was to let the seller provide first anchor in the negotiation at a price they would want to sell. After listening to their offer of $7.94, I provide the lower anchor of $6, with the assumption that lower anchor would give me a larger negotiating range. After the first two offers I had revealed the conducted taste test results which indicated coffee being positively received by the customers and as the hotel is scenically located, near to Cornell University campus and School of Hotel Administration; it is a worthwhile investment for a growth opportunity in form of positive publicity. We eventually settled at $6., although the worst acceptable deal was at $6.50 per pound, my personal reservation was $6.00. Our bargaining range was between $6 to $7.94. My BATNA was to stay with current supplier at a lower rate and not receive the perceived benefits of better quality coffee.

Briefly evaluate the negotiation from your perspective in terms of:

- Process (What worked well? What would you do differently? etc.)

Process was a distributive negotiating, where each party was incentivized by a bonus structure to save or make the most money on the deal. I could have purchased the coffee in bulk but I wanted to analyze the demand on basis of sales.

- Outcomes (Did you achieve your target(s)? etc..)

The goal to save and make most money out of the deal, at the same time providing the best quality coffee was fulfilled with the expectations of delivery twice in a week at a price of $6.?. In future we even might possibly benefit from vendor incentives, which would provide discounts or free products to generate more business.