Prepare according to above given details

Planning Document: Please read your role confidential information

Your Planning Document should cover, but not limited to, the following:

(1) Issues to be negotiated;

(2) Your position and interests on each of the negotiation issues;

(3) The priority of each of negotiation issues;

(4) Your BATNA and Reservation Point;

(5) Your Target Point;

(6) Your sources of power and negotiation strategies;

(7) Your best estimate of your negotiation opponent's position, interests, BATNA, reservation point etc.

Please be advised that the format of the planning document is flexible; it's for your use to get a better negotiation outcome.
 
 

You are Pat Hammer, East Coast Vice President of Sales for Anderson Coffee. You have been invited to meet with Sandy Grant, Food & Beverage Director for the Statler Hotel in Ithaca, New York. The hotel is scenically located near the center of the Cornell University campus and is attached to the renowned School of Hotel Administration. When Grant called you, he (she) expressed interest in Anderson's Product, but seemed very concerned about the price. Two months ago, you received a request for bids for coffee suppliers for the contract that runs July 2003 through June 2004. A copy of the request for bids is attached. You responded to the request with a bid and a packet of promotional materials. As July approached, you figured Anderson was no longer under consideration. You were surprised and pleased to be invited to meet with Grant. The coffee industry is, in many ways, risky. You depend on weather patterns and on third-world politics for your production. However, modern technology has dramatically reduced the perishability of your product. Further, Anderson's extensive lines of flavored coffees have sold well. Anderson also offers its customers advanced clinics and consultations on coffee brewing and water filtration. A recent letter from a major chain of pancake houses attests to the positive results of these clinics and to the fact that customers appreciate them. Demand for Anderson coffee this year has been substantially higher than last year. Overall, sales have been extraordinary. You know that your product is higher-priced than that of many of your competitors. This difference makes sense because you pay more for your beans and support extensive research and development efforts on the growing, processing, and brewing of coffee. Further, your company has a commitment to paying independent coffee farmers a fair price that allows them to earn a living wage. These substantial costs have, you believe, paid off in Anderson's superior coffee and reputation. The Statler Hotel account would be very nice from a publicity standpoint, as it serves (and is staffed by) many current and future hospitality managers. However, the volume, at 10,000 pounds annually (approximately 4,545 kilograms), is only moderate. You do not have other customers in the Central New York area, so shipping alone would cost you close to $0.80/lb. You know that Anderson sells at close to cost $5.93/lb. to a few very major consumers who are also conveniently located. However, your selling cost to most restaurants is $8.10/lb. You feel that your bid price represents a reasonable discount. The CEO of Anderson Coffee, R.N. Hatch, has told you that you should not accept any deal for less than $7.25/lb. This price represents a significant discount from market rate due to the publicity offered by the school. Further, every penny you are able to add to the per-pound price will translate to a personal commission of $50. Summary of Key Points All prices include delivery Anderson Price Stated on Bid, including delivery (Price includes delivery cost: 0.80/lb. due to low volume in the area) Standard Restaurant Price Best Price Offered to Largest Customer Annual Quantity Worst deal acceptable $7.94/lb $8.10/lb. $5.93/lb 10,000 lbs $7.25/lb.