Philip is looking for a plot of land upon which to build a housing complex near Cemara Asri, Deli Serdang Regency, North Sumatra. A hectare plot has been for sale for five years. The owner, a businessman who lives in Medan, had used five real estate agencies in succession without concluding a sale. Last week another, different, real estate agency erected a 'for-sale' board on the site and Philip checked the sale particulars on the Internet. The asking price is IDR 25,000,000,000 which was IDR 2,000,000,000 above the price asked for the plot on the owner's previous attempts to sell it. Interestingly, the owner had not dropped his price despite his failure to sell. Philip had enquired about the plot with his friend who was working at the City Planning Department of the Regency Government of Deli Serdang. He was assured there were no planning restrictions on what could be built on it. He contacted the selling agent, Ms. Catherine, who claimed there had already been many enquiries from people living in Medan, where Mr. Marco, the owner, lives. She also said that Mr. Marco was determined to get his price of IDR 25,000,000,000, and that he was in no hurry to sell, and that he insisted that all negotiations were to be conducted through her. Philip thought the owner might be in a strong bargaining position by demonstrating his firmness on price and by recently increasing the price to IDR 25,000,000,000. Leaving everything to his agent, Ms. Catherine, the owner had fully trusted the sale of the plot of land on Ms. Catherine, despite her big commission upon the sale. Philip's problem boiled down to where to open his negotiations. Should he offer the asking price? If not, should he go over it? How far should he go under it? If either, which price should he offer? He was in a dilemma. He actually only had the budget of IDR 20,000,000,000 to buy the plot of land. He had insufficient finance in place to pay close to the asking price for the land. Given that, in addition to the land price, he had to finance the clearing of the land of bush and overgrowth, much of it a disused and neglected old olive grove, plus the accumulated rubbish dumped on it over the years. Then he had to undertake landscaping on the sloping ground, build a boundary fence, pay the architect's fees, install all the electricity, water and sewage utilities, and construct a 500- metre private access road. Lastly, he had to finance the construction of the houses, plus club house with a swimming pool inside. Yet, he had a back-up plan to apply the facility credit from banks in order to so that he could obtain additional finance to buy the plot and construct the housing complex. Philip did not like dealing with the agent; he preferred direct negotiations between principals. But, Mr. Marco did not want to talk with him directly. Later on, he discovered that his friend, Ali, went to the same gym with Mr. Marco. He did not like Mr. Marco's aggressive price tactics of increasing his price to IDR 25,000,000,000 when he couldn't sell the land for five years at IDR 25,000,000,000. In these circumstances, he was determined that he would not accept Mr. Marco's opening price. But then, if a bigger commercial developer like Mutiara Groupwhich owned two big housing complexes near there, such as Mutiara Palace and Mutiara Residencetook an interest in the site, this could create problems for Philip's ambitions and he had to find another not-really-attractive plot of land near Cemara Hijau. Questions: 1. In this transaction, what are Philip and Mr. Marco's interests? 2. Do Philip and Mr. Marco have their own BATNA? 3. How would you describe the distributive bargaining problems between Philip and Mr.Marco/Ms. Catherine? 4. Why would Mr. Marco use an agent such as Ms. Catherine? 5. Given Philip's current budget to buy the plot of land, what is the ZOPA? 6. In your opinion, how might Philip deal with Mr. Marco's apparently strong bargaining position with a conditional bargain for Ali to settle at less than, but no more than IDR 25,000,000,000? 7. Assuming that you were Philip, if Mr. Marco allows Ms. Catherine do one-time concession, what would best your best offer in order to improve the communication of the negotiation? 8. Based on what you have learned, explain the tactics and/or strategies that Philip could use to close the deal