SC.

Johnson
Negotiation plan
Manolache Stefania- group 133
Ungureanu Maria Teodora- group 136
Background
Business objectives
 The business needs that the procurement will address are : launch of new
technologies and formats, wining concept fragrances and best in-class execution in-
store.
 The key benefits of successfully meeting these business needs are: a superior product
and design, superior fragrances; incrementality to the category; fuel Glade share
growth
 The procurement will help the agency achieve its long-term goals by relaunching the
Glade Electric.
 Meeting these business objectives is important to the success of the agency.
 If these business objectives are not met the consequences are the replacement of
some products from SC Johnson.

The parameters
The negotiation
 The proposed contract will deliver the following business needs products and
services, structure, applications, standards and practices, organizational culture.
 The objectives for the negotiation are:
- to close the deal
- attracting new consumer
- get best value-for-money over whole of life
- to set clear and realistic expectations.
- minimize transaction costs and time and drive savings
 The negotiation outcomes are achieved goals and the desired profit

The supplier
 The negotiation is with the preferred supplier: ELiX
 The preferred supplier is a company that was founded in 1999. Headquarters and main
production facilities are located in Wroclaw, Poland. Second production plant in India
(New Delhi, exclusively for Suzuki-Maruti & Shell India). Core business: AIR
FRESHENERS
Sales markets: Europe, Middle East, Asia, North America, Africa, Central and South
America. The product is adapted to customer fragrance preferences, always made in
Portland. The price always gives the custom are more at a good price. Place:
partnership cooperation with distributors and private label owners (exclusive regional
contracts)
Promotion is made through internet and POS.
 Our history of using this supplier: ELiX manufactures a wide range of air fresheners
and they are able to adjust customization degree in order to develop personalized air
fresheners, so it's equitable for Glade to use them as suppliers, given their
opportunities.

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Transitioning to new supplier
 The transition will have a significant impact on ongoing service delivery.
 Aspects of the transition that need to be addressed in the negotiations are listed below.
Negotiating these points will help inform the development of the transition plan.
- ensure that the new contract start date aligns / overlaps with the previous contract
completion date
- find out what the new supplier needs from the agency and the previous supplier in
order to transition effectively
- ascertain the new suppliers requirements for information, access to premises / files
/ transfer of assets etc. during the transition phase
- customer engagement strategy – how and when the new supplier will be
introduced to stakeholders and what will be done to build these new relationships.

Contract
The proposed length of the contract is three years with the option to extend twice for one year
i.e. 3+1+1.

The teams
The agency’s team
Negotiating on behalf of the agency
Area of expertise Role in negotiation
Sales manager Lead negotiator
Hr department Summarizer
Hr department Observer
Assistant manager Minute taker
Sales Manager Subject matter expert
Accountant Financial analyst
Lawyer Legal advisor

Logistics
Location
Negotiations will be conducted at our offices at Bucharest.

Timeline
 Negotiations will commence on 25.03.2021 and aim to be completed by 30.03.2021.
 It is anticipated that there will be three meetings over the course of one week
 Positioning
Importance of the goods/services to the agency
The business impact and risk in the delivery of the goods/services, based on the following
supply positioning matrix, is tactical profit.
High Supply position Value Impact/r
isk
Strategic security Low High
Business Impact / Risk

Strategic Security Strategic Critical Strategic critical High High

Tactical acquisition Low Low
Tactical profit High Low

Tactical Acquisition Tactical Profit

Low High
Relative $ Value
Diagram: Supply positioning matrix

Buyer’s priority Description Approach Arrangement

 Low-cost Ensure  Long term
Strategic goods/services supply contracts
security  Strategically  Build reserve
(security of important of stock
supply)  Shortage of  Consider
reliable suppliers alternative products
Strategic critical  High costs Manage  Med/long
(security of specialist goods/services suppliers term contract
supply at a good  Limited  Contingency
price) number of suppliers planning
 Routine Minimal  One-off
Tactical purchases attention contracts/purchase orders
acquisition  Low-  E-purchasing
(purchasing value/low-risk goods/services  Procurement
efficiency)  Many cards
potential suppliers
 High- Drive  Short term
Tactical profit
cost/low-risk goods/services savings contracts
(improving
 Many  Ongoing
profit through
potential suppliers active sourcing for competitive
costs savings)
price
Supply positioning matrix explained

The agency’s value as a customer

  The value of the agency’s account and the attractiveness of our business to this
supplier have been assessed through the supplier preferencing matrix below. This
matrix indicates the level of willingness or reluctance of this supplier to meet our
needs.
 Based on the matrix we are seen as development.
 This means that Glade drives the category growth through continuous innovation:
Launch of new formats and technologies; Wining concept fragrances (Authentic,
‘real-smelling’ fragrance experience); Best in-class execution in-store
 Glade is an absolute market leader in total Home fragrance (42.7% market share) in
all segments except Electric. The electric segment accounts for 9%, still small but
with the fastest development in the last 2 years despite no innovation since several
years.

High

Supplier’s Value Attractiveness

Attractiveness of account

Development Core
view ($)
Nuisance Low Low
Development Low High
Exploitable High Low
Core business High High
Nuisance Exploitable

Low High
Relative value of account

Diagram: Supplier preferencing matrix

Quadrant Description Action

Nuisance  Low-value Withdraw
 Little profit
Development  Low-value Get further business
 But still attractive
Exploitable  High-value Maximise profits
 But not attractive
Core  High-value Retain and expand
 Highly attractive
 Supplier’s core business
Supplier preferencing matrix explained

Power and dependency

 The power and dependency matrix below assess the levels of power and dependency
between us and this supplier. This matrix shows that buyer and supplier are
interdependent.
 This means get further business.
 Strategies to address this include:
 One big promotion in the moment of the launch in all the Hypermarket stores
• The promotion consists in the implementation of one super extra-
placement, formed out of 4 floor displays for two weeks.
 • To be more attractive for the consumers, SC Johnson has allocated a
promotion budget of 10% price cut for the entire Glade Electric portfolio
 The implementation: the negotiation of the implementation of 1 floor display, for
business/relationship to the supplier 1 month, after the relaunch promo will be over, in all the A Hypermarket stores
high

buyer is buyer & supplier

dominant are interdependent
Importance of buyer’s

buyer & supplier supplier is

are independent dominant

low high
Importance of supplier’s goods/services/relationship
to the buyer

Diagram: Power and dependency matrix

Desired supplier relationship

The level of desired trust and communication with the supplier and the approach to
managing risk – the company will seek a long-term relationship with the supplier based on a
strategic collaborative relationship. Our objective is to ensure reliable supply.
In the negotiations, this means that we will have:
1. Effective Communication: keeping channels of communications open and strong
will help to keep the company and the suppliers on the same page. There needs to be
transparency in each other’s’ operations to build trust and understanding in the
partnership. Moreover, it also helps to understand their language and culture to avoid
any communication breakdown.
2. A Solid Agreement- to always ensure that Sc Johnson and its suppliers agree on a
clearly crafted contract where terms and responsibilities are defined. This should be
done before agreeing into a supplier-retailer partnership. Such action will eliminate
any conflict or disagreement if any problem occurs.
3. Foster the right behaviors - Companies should consider ensuring that a supplier
behaves in a way which is amenable to the creation of a productive relationship. It is
both the responsibility of the supplier and the buyer to foster good behaviors in order
to ensure a win-win situation. For instance: opportunistic activities, slow delivery may
indicate that the supplier is not sufficiently invested in the relationship.

Negotiation points
Evaluation panel recommendations
The evaluation panel recommended that the following points are addressed in the
negotiations: Consumer - Shopper target: Women 25+
 • Occasions: when they are thinking about their home: daily/weekly cleaning,
decorating, planning, get together with family and friends;
• “me moments “ at home: to boost energy for the whole day/week, relaxing after
a long day/week. Choice drivers: emotional connection associate to the usage,
fragrance, and quality makes me feel good/relaxed
Price: Holder at parity vs Arik, and refills slightly cheaper (0.95). Double refill -20%
vs single and we have Promo-price: same strategy as standard price.
Marketing support: Media support during full year: TVC, social and digital plan •
BTL support (POSM materials, displays, wow display-House of Glade) • Tailor made
promo activation with dedicated prizes to A shoppers

Anticipating questions
Key questions to open the negotiations with
Question
1. How do you differ from your competitors?
2. Why is your price so high?
3. How will you ensure that you can relaunch
successfully?
Key point
Have unbeatable customer service;
 We do more for our customers than
they expect from us. We make sure
that their needs are met;
Using price as a distinguishing factor;
Using speed to our advantage.
How high is my price, exactly? At
what price would you be willing to
order? The vaguer the answers are, the
more likely price isn’t the real
problem.
We have a prep in the beginning in
which we anticipate, prepare and spot
pitfalls;
We have a touchpoint;
First, we have already relaunched it
and we saw how successful it was

4. What other work commitments do you have
going forward?
5. How will you resource and manage relaunch?
As work commitments, we can say
that we are looking forward to seek
long-term relationship between the co-
workers.
Test your website and customer
support and having people accountable
for each key result
Risks
L IK E L I H O O D o f r is k h a p p e n i n g

Key risks have been assessed using this risk analysis framework.

Almost amber amber red red red

certain

Likely yellow amber amber red red

Possible yellow yellow amber amber red

Unlikely green yellow yellow amber amber

Rare green green yellow yellow amber

Negligible Low Moderate High Extreme

CONSEQUENCE if the risk happens

Diagram: Risk analysis framework

 Key risks have been assessed on the basis of likelihood (L) and consequence (C).

 The key for the following risk tables is:

- likelihood (L): R = rare U = unlikely P = possible L = likely A = almost
certain
- consequence (C): N = negligible L = low M = moderate H = high E =
extreme.

Key risks
 The new product may disappoint the buyer, adversely affecting the image
compared to the other products of the company
 The brand name may not be compatible with the new product
 Exaggerated brand expansion can lead to diminution of the interest of the buyers

Product Launch Checklist

Learn about your customer.

Write a positioning statement.
Pitch your positioning to stakeholders.
Plan your go-to-market strategy.
Set a goal for the launch.
Create promotional content.
Prepare your team.
 Launch the product.

Define the Negotiation Steps

In a negotiation we have 7 main steps:

1.   Gather Background Information - When gathering background information, include
the style, values, ethnicity, culture, demographics (younger negotiators on/using twitter,
facebook, Linkedin, and their way of communicating, versus those that are slower to use
these mediums) and other information that’s pertinent to that particular negotiation session.
2.   Assess your arsenal of negotiation tactics and strategies - The more you’re aware of
how to use the appropriate tactic with the appropriate strategy, applied at the appropriate
time, the more options you’ll have and be able to execute during the negotiation.
3.   Create Your Negotiation Plan - Consider the overall strategy you’ll use for the
negotiation. Break strategies into tactics. Assess possible strategies the other negotiator might
employ. Take into consideration the use of red herrings (Note: Red herrings are items that
have little to no value to you that you position as having value, but items that possess real
value to the other negotiator). Also consider how you might apply pressure to points
(leverage) throughout the negotiation.
4.   Engage in the Negotiation Process - Observe body language and mannerisms. This can
be done in person, via the phone, and in writing (e-mail, etc.). Note the style in which the
other person negotiates (i.e. friendly (let’s get along), reserved (I’m not quite sure how this is
going to go and I’m apprehensive), hostile (I’ll show you mine, if you show me yours – the
only way for me to win is for you to lose – I’m in the driver’s seat; it’s my way or the
highway).
5.   Closing the Negotiation - Be on high alert for the conclusion of what you think is an
agreement, serving as the next phase of the negotiation; in some cultures, this is a common
practice. If you’re unsure of the other negotiators sincerity, put deliverables into phases of the
negotiation.
6.   Conduct a Postmortem - Dissect the negotiation. Assess what went right
– What could have been improved upon
– What you learned from that negotiator about negotiation styles
– What lessons should be taken forth into other negotiations
– What went wrong
– Why did it go wrong
– What could you have done differently
– What prevented you from using a better tactic/strategy to allow you to gain control of the
negotiation.
7.   Create Negotiation Archive - Create an archive of your negotiations and store them in a
repository. Set up keywords to cross-reference sections, tactics, and strategies in your
negotiation write-ups, to be used for the extraction of quick ideas and serve as a resource, for
future negotiations.

The buyer’s internal objective

Air Care category and this can be driven by:
1. Up-trading; the migration of the already existing customers in the category to more
premium segments. With a selling price above the category average(10 ron), the new Glade
Electric(at 20 ron) can be a solid contributor. The retailer applies the same margin an all the
products within the category.
2. Increasing the penetration: attracting new consumers in the category. With a state-of-the-
art design, great scents and a mileage of up to 100 days, the new Glade Electric can bring
new customers that never used an Air Care product before.
3. Attracting customers from other retailers.
4. To help with the exhaustion process for the old portfolio, SC Johnson will provide a 20%
budget applied on the stock value from every retailer, only with the confirmation of listing of
the new range. 5. For the implementation of the big promo and the floor display, SC Johnson
has budgeted an extra investment of 100k ron for A Hypermarkets.