All one-to-one commercial negotiations between a specific purchaser and a specific supplier take

place within an industrial market and a larger business environment characterised by multiple forces

which both parties typically have little control over. STEEPLE framework highlights the 6 main

external influences on a business:

LO 1, AC 1.3

Principled negotiation is based on four fundamentals: people, interest, options and criteria:

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1st Principle: separate the people from the problem: Negotiator should depersonalise the situation

and accepting that the subject matter of the negotiation. This can be difficult for untrained

negotiators, but this is a key skill to develop

2nd principle: focus on interests, not positions: It is important in principled negotiations not to focus

on their parties' positions (what are expressed during negotiations), but on the interests (underlying

needs) behind them

3rd principle: invent options for mutual gains: this principle aims to help the parties find a solution

that both would benefit from. The more options - or tradeables - that can be brought to the table the

better.

4th principle: insist on using objective criteria: is about making sure that the negotiation stays

focused on outcomes based on objective criteria and that it is productive.

LO 1, AC 1.2

Negotiation variables such as price or contract length, etc are that can be traded with TOP in a

negotiation. The more variables you can identify, the better. The more variables you can identify and

articulate, the lower the chances of the negotiation reaching deadlock as more possibilities are

facilitated regarding more creative solutions.

Below are examples of negotiation tradeables in buying professional services:

LO 2, AC 2.3

Packaging is considered a variable cost because it fluctuates with the level of production or sales

activity. Variable costs change directly in relation to the volume of output or service. In contrast:

Rent (A), Loan repayments (B), and Insurance (C) are fixed costs, as they generally do not vary with

production levels within a certain range. These are recurring costs that remain constant over time,

aligning with CIPS's cost classification in procurement.

There are four types of questions that can be used in a commercial negotiation:

Hypothetical questions, where you ask about a possible situation or abstract concept, are very useful

at the testing and proposal phases. Hypothetical question does not state any commitment as it is

only about 'if something happens, then ...'. This type of question can be useful at giving suggestion.

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LO 3, AC 3.3

Single-sourced relationships often involve exclusivity for a specific product (1) and a high level of

trust and collaboration (3) between buyer and supplier. This type of relationship is selected for

strategic procurement purposes, often involving long-term partnerships, which align with CIPS’s

relationship spectrum guidelines.

Negotiating at the supplier's site can give the supplier a psychological advantage due to their

familiarity with the setting. To ensure a neutral and balanced negotiation environment, it’s

preferable to conduct negotiations in a neutral location or through structured channels, as

recommended in CIPS's guidance on negotiation settings.

Zone of Potential Agreement (1) and Walk-away point (3) are key elements in negotiation planning.

Establishing a Zone of Potential Agreement helps identify where interests align, while the Walk-away

point sets the limit of acceptable terms. Both are essential to preparing a negotiation framework that

benefits both parties, as per CIPS best practices.

There are many tactics and ploys that can be used to persuade others, particularly those not trained

in negotiation. But in general these tactics should be used with care, as they can backfire; and in

situations where a long-term relationship is desired, they can be, if detected, become an irritant to

TOP.

Tactics are particularly effective if and when you are dealing with untrained negotiators, in

consumer's buying situation and in once-off encounter.

An adversarial negotiation style is more suitable in a market with many alternative sources and

substitutes (B). When there are multiple suppliers, buyers have the upper hand and can adopt a

competitive stance without risking supply continuity. This aligns with CIPS guidance on the use of

adversarial styles in competitive markets with numerous alternatives.