International Negotiation Pricing Tactics: A Literature Review

This article, 'Pricing Tactics in International Negotiations' by Alessandro Merendino and Paola Rovelli, published in Negotiation and Conflict Management Research in 2017, examines the importance of pricing tactics in international negotiations. The authors argue that pricing is a crucial step in the negotiation process, directly impacting the interests and decisions of both parties.

The paper analyzes three primary pricing strategies employed in international negotiations:

1. Pricing strategy: This approach involves setting prices based on market value or cost.
2. Discount strategy: Discounts are offered as reductions from the original price.
3. Exchange strategy: This involves trading goods or services to reduce the overall cost.

The authors emphasize that the choice of pricing strategy is influenced by various factors, including negotiation objectives, the relationship between the parties involved, and cultural differences.

The article also provides practical tips for negotiators to effectively utilize pricing strategies in international negotiations. For instance, it recommends gaining a thorough understanding of the counterpart's needs and bottom line before formulating a pricing strategy. Additional tips include flexibility in employing different pricing tactics, using specific numbers and data during negotiations, and considering cultural nuances when formulating pricing approaches.

Overall, this article offers valuable insights and suggestions for negotiators to enhance their understanding and application of pricing tactics in the context of international negotiations.