SOLEX-DIGITAL: EFFECTIVE NEGOTIATION STRATEGIES (Case Analysis) Sales Management (Joseph F. Hair)

Introduction

Solex is a Digital Signage and Technology company with two decades in the field of technology based on the South of England. The company provides semiconductor-based solutions that can be integrated with surveillance and analytics options.

This case of Effective Negotiation Strategies is based on Personal Selling Process (PSP). The sales representative, Marilyn Boldt is in the negotiation process with the National Computer Company (NCC) and she is facing a hard time to take a decision whether to provide a discount which will affect the revenue of the company or to lose the negotiation which could lead the company to a better reputation. The hard time decision is due to Mr. Logan representative from NCC who is characterized as a greedy bargainer. There are two prospects in this case either to get a contract by compromising on the quality or to let go of the negotiation.

Discussion

1.  Is it worthwhile for Marilyn to negotiate with Mr. Logan when his demands are so unreasonable—and unprofitable if she agrees to the 20 percent discount? Explain

Every business are established to make a profit and every business put up some margin calculating all the expenses that it has to make to sustain the organization. We can see the case of a 20 percent discount in two ways; one in the view of Mr. Logan and second in the view of Marilyn.

As we know that Mr. Logan has been in the industry for last 30 years and he knows what he is asking for so Marilyn should once consult with the higher authorities about the discount if the there company could make it. In my experience, company authorizes only certain percent to the sales people but the company can go beyond that. There is no need to make a profit from one product since National Computer Company (NCC) is making billions in a year and Mr. Logan has promised to get all the contracts to Solex, there the company can make the money. Establishing a good relationship with the customer can make them win bigger profits in other products rather than from a single product.

Looking from Marilyn prospective, the company cannot make any profit if 20 percent discount was accepted. It's not good to compromise if the company cannot cooperate with the offerings, the company might go on loss and can have a negative impact with other vendors. Since Mr. Logan has an impression of the aggressive buyer, he won't come down from his demand and its better for Marilyn to withdraw the call or she has an option to put forward to the top level management. So taking an account of Marilyn, it is better to put down the sales pitch and start working on other customers.

2. Should Marilyn do like most salespeople who “win” orders from Mr. Logan—simply cut back on product quality and/or service and be relatively unresponsive to complaints, so that her company can make a little profit? If she follows this strategy, Marilyn realizes that she probably won’t get any orders from Mr. Logan next year, and it may hurt her company’s reputation—not only with NCC but with other companies through negative word of mouth.

Every business is made in mutual trust. If you starting to cheat your consumers, the door will be slammed back to you. Compromising on electrical goods is not only harmful to vendors and suppliers but it will directly affect the end consumers who use it in day to day life, the explosion is the biggest threat of all. Killing your ethics and doing unethical practice is prohibited. NCC is not such small companies, they might have a number of people looking after quality assurance. So the first thing that will get back to Solex will be no check issued from NCC. And when such practices come out in the market through negative word of mouth, then the company will lose all its businesses and also it can be under legal actions for providing such low-grade materials.

Rather compromise on product quality, Marilyn should simply avoid any further contact with NCC and should try to come back when Mr. Logan gets retired. This will save Solex from losing company reputation, vendors and the consumers, and the trust will be intact within.

3. Marilyn wants to keep NCC as a customer because it could become a valued account when Mr. Logan retires. So she’s thinking about calling her sales manager to ask if she can offer the 20 percent discount and accept a loss on the contract in order to keep the customer relationship with NCC. As her sales manager, what advice would you give Marilyn?

As I have mentioned earlier in the answer, the sales people are only authorized to provide a discount as of company rule but the management can provide more than that. So as her sales manager, I would like to hold the negotiation and will put forward the offer from Mr. Logan to the top management to figure way out. But for the time being, I would tell her to focus on other clients and continue her sales pitching.

As for myself an employee too, I cannot offer a high level of discounts and if it was under my authorization it would be a green signal. If the authorization was beyond my control, I would suggest her to leave the matter with NCC and will tell her to prepare for other clients with more potential than NCC. Focusing on one lead which is impossible to convert to the client will be a waste of time.

4. What role, if any, does customer relationship management play when dealing with difficult buyers like Mr. Logan?

Customer relationship management help to deal with the difficult buyers like Mr. Logan since it has a record of past history if any such have existed and been dealt with. CRM will help the sales people to deal with the customer calmly and come up with a solution.

Conclusion

The dilemma of the negotiation power of a sales representative has come to place here, I believe it's a case of authorization power for the sales people. Mr. Logan has a price objection to make the purchase order since he is looking for 20 percent discount on the products which in not relevant to Solex-Digital though it has an advantage over other competitors the attitude of greedy bargainer of Mr. Logan has let down the negotiation process. Marilyn should look up to the management team to handle the situation of the discount percent whether the company is able to do so or not else there is no point of continuing with the negotiation process.

References

Unknown. Solex Digital. Retrieved April 22, 2019, from
http://www.solexdigital.co.uk/about

Unknown. (2012, Sep 3). Case Study. Retrieved April 22, 2019, from
https://www.studymode.com/essays/Case-Study-1080101.html

Louis, Suzanne. (2016, Mar 28). How to deal with difficult customers. Retrieved, April 22, 2019, from
https://1crm.com/how-to-deal-with-difficult-customers/