Coffe Contract

1. What is your walk away point? How did you come up with that?

• My walk away point will be when Sandy Grant only willing to offer a price below $6.5/lb. It’s the minimum acceptable price that my CEO Hatch has told me. The price of $6.5/lb has already included a $2000 loss, which will be considered as investment in publicity. So, any price below that will not be accepted at all.

2. What is your target? How did you come up with that?

• My target is to close a deal at $7.94/lb. Since we don’t have other customers in the Central New York, where Statler hotel is, and the volume of the coffee requested from Statler is moderate. We will spend $0.8/lb for shipping the products. Therefore, the price needs to cover the cost of making (about $5.93/lb) and shipping the coffee. As we will also need to provide three “ten cup pour over machines” and the coffee filters, the $7.94/lb is a reasonable price.

3. What are your sources of power and key weaknesses in this negotiation?

• Power: Anderson Coffee offers very high-quality coffee, extensive lines of flavored coffee and good reputation. We also have coffee clinics and consultations for customers to learn about coffee brewing and water filtrations;

• Weakness: we do know that our products are priced higher than other competitors

4. What is your strategy for maximising your objective