Bliss Homes Ltd. Business Plan

...

George and Mini have decided that since this will be a once-in-a-lifetime decision they want to go in for the best with all possible amenities. However, they have decided that they would not like to invest more than Rs.45 lacs for the apartment through a loan from the bank. They could get another loan of about Rs.5 lacs for woodwork / furnishings and could scrape together another 3 lacs from savings.

Following is the transcript of the discussions that George had with the GM (Sales) of Bliss Meadows 2 days ago.

George: Hello. At last I finally get to meet you. Your juniors were not allowing to meet you when I came last.

GM (Sales): Good morning sir. I am sorry about that. I am always available to meet you. How can I help you?

George: Me and my friends want to buy a total of 6 flats but we are not convinced about the prices etc. What would be your final price? Let me tell you we have done our homework and enough research.

GM (Sales): Our prices are firm and most competitive compared to similar apartments…...

George: (Interrupting) No… no… no… I think you are overcharging. The neighbouring complex is offering at Rs.2800/- and they are willing to give a better price for 6 flats.

GM (Sales): What we have offered you is our Luxury Premium flat with more amenities that they are offering. Anyway I cannot comment on what the others are offering. We will be very happy to have you and your colleagues as our customers.

George: They also want us at their customers. I will give you Rs.3000 per sq. ft. max. We also want the sports membership free, and 25% discount on A++ fittings, woodwork, furniture and appliances. Afterall, you cannot overcharge us on everything as you must be getting more than 50% margins on all these. We are still allowing you 25% margin. if you agree we can finalise now, if not, we will be forced to go elsewhere.

GM (Sales): These are all standard items with very low margins. We offer these only as a convenience to our customers. I can give you additional 5% discount on all the items. We want good people in this apartments.

George: All builders speak the same way. I do not trust them. You should be happy that you will be able to sell 6 flats at once. Give me the final price immediately. We would like to finalise today itself.

GM (Sales): I am extremely sorry I cannot give more than 15% discount. The price per sq. ft. will be Rs.3450. We cannot give the membership free as all our customers have paid for it and it will not be fair to them.

George: Your price was Rs.2400 when the project was launched. You are now overcharging by Rs.1050 per sq. ft. This is not acceptable. I have made you a very reasonable offer. Maybe, I should meet your CEO.

GM (Sales): Sir, my CEO is not available. Actually, you have been misinformed, when we launched the project more than 2 years ago the price was Rs.2850. There has been an increase in material and labour. That is why we are forced to charge Rs.3450 today. Anyway the best I can do is reduce Rs.50 per sq. ft. since you are talking of buying 6 flats immediately.

George: I think you are not interested in my offer. Let me think and explore other options as well. I will give you 48 hours’ time to think and get back to me. Please inform your CEO of my offer and arrange for a discussion immediately.

GM (Sales): Yes, sir. Definitely. I will arrange for a meeting and work out the best possible discounts.

End of Transcript

ASSIGNMENT

Based on the data available and the transcript answer the following questions / give your opinion:

- Is there an opportunity for a negotiation? Explain in brief.

Seller(original)

Seller(bargained)

Buyer

Available

House

4747200

4678400

4128000

4500000

Extras

1125000

1062500

937500

500000

Sports

Membership

300000

300000

0

300000(savings)

Total

6172200

6040900

5065500

5300000

There is no Zone Of Possible Agreement (ZOPA) for this negotiation and hence there is no opportunity for negotiation.

[pic 1]

- Does the transcript show trends of Positional or Principled negotiations? Give at least 3 reasons supporting your decision.

The buyer (George) follows positional negotiation whereas the seller (GM Sales) is following principled negotiation.

George:

- Attacked the manager personally

- Stereotyping all builders to be misleading and untrustworthy

- Threatening to move away to competitors

GM Sales:

- Didn’t hold on to position and was open to negotiation and reasoning.

- Focused on interest and not position. He politely denied to comment on competitors and focused more on what they could offer.

- Despite personal attacks being made he maintained his composure and not tempted to go the positional bargaining way

- Are the buyer and sellers adapting soft or hard strategies in bargaining? Explain in brief.

The