Anderson Coffee Case Summary
Summary of Negotiation
1. This negotiation includes Pat Hammer, the East Coast Vice President of Sales at Anderson Coffee and Sandy Grant, the Food and Beverage Director for the Statler Hotel in Ithaca, New York.
2. Two months ago I, Pat Hammer, received a bid for a contract, lasting from July to June, from the Statler Hotel. I responded to the bid request by sending a packet with promotional materials to the hotel. Ms. Grant, the Food and Beverage Director for the Statler Hotel, contacted me in July with interest in forming a contract with Anderson Coffee. However, Ms. Grant is concerned with the quoted price for the contract.
Issues
1. The primary issues to be negotiated would include intangibles. Before getting too far into the contract, …show more content…
My BATNA would consist of spending the $810 that would have gone into investment in publicity on actual publicity methods. I would create better advertisements and do more local promotional events.
2. My Target Price would be $3.80, including the transportation cost of $0.60. This price allows for $0.14 of negotiation with the price quoted on the bid. Additionally, my target price is much lower than the delivered standard restaurant price. Given the CEO of Anderson Coffee’s reservation point of $3.15, along with the $0.60 transportation fee, I would lower the investment in publicity by $290; meanwhile, still gaining a small commission.
3. My Reservation Point would be $3.35. I would set this price point because this is the lowest price that I can sell my product without losing money on each pound of coffee sold. The CEO of Anderson Coffee has informed me that I should not accept a price lower than $3.15. At that price I am losing $0.20 per pound of coffee sold. As long as the Statler Hotel made an agreement above $3.35, I would consider accepting the negotiation.
Problems, Conflict Strategies & Planning
1. A potential problem that I foresee is Ms. Grant trying to negotiate the price to be lower than my target price. This would create a negative bargaining range leading to
1. This negotiation includes Pat Hammer, the East Coast Vice President of Sales at Anderson Coffee and Sandy Grant, the Food and Beverage Director for the Statler Hotel in Ithaca, New York.
2. Two months ago I, Pat Hammer, received a bid for a contract, lasting from July to June, from the Statler Hotel. I responded to the bid request by sending a packet with promotional materials to the hotel. Ms. Grant, the Food and Beverage Director for the Statler Hotel, contacted me in July with interest in forming a contract with Anderson Coffee. However, Ms. Grant is concerned with the quoted price for the contract.
Issues
1. The primary issues to be negotiated would include intangibles. Before getting too far into the contract, …show more content…
My BATNA would consist of spending the $810 that would have gone into investment in publicity on actual publicity methods. I would create better advertisements and do more local promotional events.
2. My Target Price would be $3.80, including the transportation cost of $0.60. This price allows for $0.14 of negotiation with the price quoted on the bid. Additionally, my target price is much lower than the delivered standard restaurant price. Given the CEO of Anderson Coffee’s reservation point of $3.15, along with the $0.60 transportation fee, I would lower the investment in publicity by $290; meanwhile, still gaining a small commission.
3. My Reservation Point would be $3.35. I would set this price point because this is the lowest price that I can sell my product without losing money on each pound of coffee sold. The CEO of Anderson Coffee has informed me that I should not accept a price lower than $3.15. At that price I am losing $0.20 per pound of coffee sold. As long as the Statler Hotel made an agreement above $3.35, I would consider accepting the negotiation.
Problems, Conflict Strategies & Planning
1. A potential problem that I foresee is Ms. Grant trying to negotiate the price to be lower than my target price. This would create a negative bargaining range leading to