Bluffing Vodafone

The Vodafone marketing rep called me last summer to buy 600,000 yen worth of table space at the Tokyo Orientation AJET Info Fair. A big sale compared to the usual purchase of 1/10 of that amount. He called me the next day to ask for a discount, and I said I'd get back to him. When I asked my superiors, they told me to offer whatever I wanted - 10% discount, a page of free advertising, whatever... I called back the next day and told Vodafone I was very sorry I couldn't offer a discount, but I would be more than happy to give them first pick of where they want to be placed in the Info Fair room. I waited nervously. A few days later the rep called to confirm the purchase and ask for the 5 tables facing the door.

LEVERAGE

A typical bargain will usually begin with one price. The buyer will then name a much lower price, then the seller a higher, followed by each party gradually conceding a small amount until a price in the middle is agreed upon. But where in the middle? Well that depends on how badly the party wants to sell/buy, the substitutes available, and information about the product.

In the example above, why didn't I offer the discount when I had free-wheels to do so, other than my healthy love of gambling? Well, I had a strong feeling he'd still accept the offer because he called me the next day to ask for a discount (the discount wasn't a condition of the purchase) and the info fair is Vodafone's only direct access to JETs. Not to mention Vodafone is a big ass company and can afford to pay full price. Basically I knew Vodafone really wanted those tables.

But that was only one side of the deal. People are bitter stubborn beings. Even if someone really wants something from you, if you're a dick, he or she will simply walk away. I didn't simply tell Vodafone "no discount, take it or leave it", but I offered something in return. When I consulted with my superiors and offered Vodafone a free choice of space, it appeared to them that I was doing my best to help. That might not have made or broke the deal, but psychologically I was making Vodafone more receptive to paying the full price. As well as being nice, that's why it was important to concede a small amount of money to our Thai friend last week, if I had said one price and one price only to him, and not budged, even if he was still making money he'd probably let me walk away out of pride. And when you're hemming and hawing (spelling?) about buying the batik, he'll throw out the "good quality!!!" comment, just like if you're on the edge of buying that Del computer, the salesperson will say it has a one year warrantee.

The point I'm trying to make is when you're bargaining you don't always have to concede money. Think about the non-cost characteristics associated with the product/service.

I might try and tackle Game Theory tomorrow. Your homework is to watch "A Beautiful Mind".