In a business to consumer (B2C), negotiation is very different from marketing and selling. The primary difference is that Marketing is about making people aware of the product, services, or business, whereas Selling is to convince the other person to buy your product or service. Negotiation normally succeeds selling, because once a customer has agreed to buy the product or service, then issues about price, payment terms, delivery, quantity, and others will surface, which are negotiable.
For example, when you see an advertisement in a newspaper for a new television (TV) and go to the store and ask for that particular TV, that is marketing. But when the sales-man explains to you the features and attributes of the TV and how it will be useful to you, that is selling. The moment you show your consent to buy the TV, you start haggling over the price. You may also demand that the payment mode be made in five monthly installments and then you would ask them to deliver the TV within a day or two and discuss the freebies that are available in the store.
Thus, in simple terms, negotiation normally succeeds selling and selling succeeds marketing. Some participants suggest that is it possible to jump straight to closure from selling without the negotiation process – I would say, no. There is no way to eliminate the negotiation process. In case the sales-person or someone else attempts to do that, then he or she has not provided the customer with the satisfaction or pleasure of buying, hence allowing the customer to demand something. You, as a businessperson, should have some giveaways for the customer.
In business to business (B2B), negotiation and marketing merge into one. In the normal parlance, a businessperson desirous of doing business with another businessperson would get certain parameters verified from the suppliers or customers of the latter, in order to make sure if the person or the organization that he would be dealing with is proper. These parameters most likely include credit worthiness, business honesty, general conduct of doing business, and many others as per the requirement of the transaction.
Now, the argument is, the credit worthiness of a person or an organization is a function of financial strength and a result of past transactions with other businesspersons in the market. However, business honesty, general conduct, and the behavioral attitude of a businessperson are functions of the negotiation process.
For example, you are in the business of chemical trading and you need a certain type of chemical from Mr. A. You get some parameters verified in the market about Mr. A. Some people respond that Mr. A is good, however some people also warned how Mr. A is very arrogant, demanding, and sometimes does not follow agreed meeting times. Now, the question is, if you would work with Mr. A or not. If you are not in a state of acute need, you will most likely not work with Mr. A.
In the business eco system, credit worthiness does play an important role. The players of the eco system, however, are changing, and new generation youngsters are joining. They are the ones who believe in a good conduct in business, business honesty, and also fair play. For them, negotiation is a source of creating more value for the particular transaction and probably creating a bond for a longer term. In such a scenario, negotiation becomes a very important process and it is in this process that the marketing is imbibed.
For instance, in business, when a ‘good word’ is spread by one person to another, it is most likely because of the good conduct during a past negotiation process in which they both could have met or dealt.
About the author:
A Graduate in Commerce and an MBA holder, Professor Samish Dalal has over 17 years of experience, including a teaching experience of over 8 years. Currently, Professor Samish Dalal is a faculty with S P Jain School of Global Management who deals with teaching Negotiation, General Management, and Innovation.