Negotiating vs Bidding

Consumers are faced with decisions on a daily basis, they must decide which brand of cereal, type of sports drinks, and coffee brand to purchase. Most of these decisions are minor and not much thought is put into the decision-making process. However, every once in a while consumers must make an important decision that requires research and fact finding. Some of the biggest decisions that most consumers will have to face are purchasing a home, buying a vehicle, and investing for retirement. These decisions are difficult because most people will only make them a few times in their entire lifetime, yet they can have an immense impact on the decision-maker. In addition, people must also research decisions in which they must use a purchase-channel that they are not used to going through. Let's observe two common examples of such examples.

Negotiation:
Before going into a negotiation transaction, the consumer should consider what their best alternative to a negotiated agreement will be. In other words, what will they do if they cannot agree to the terms of the individual with whom they are negotiating. Once the consumer is able to determine this, he should be able to choose a price point which is the absolute most or least acceptable amount, depending on the type of transaction. One common pitfall when negotiating for a new home, is that consumers tend to get attached to the house and offer more than they intended. The house buyer disregards the fact that there are other houses on the market and can sometimes offer more than he originally intended. Furthermore, when consumers are negotiating for a vehicle purchase, they should research car information as much as possible, beforehand. Nowadays, thousands of useful websites are available with information ranging from safety ratings to resale vehicle prices. As a consumer, you should do as much research as possible in order to be fully prepared to negotiate with a real estate agent or with a car salesman.

Auctions:
With the development of popular bidding websites, such as eBay, auctions have become a very popular way to purchase products. Consumers can purchase anything from shoes to houses in online auctions, or in live auctions as well. Bazerman explains that an important note to keep in mind is the value of the item which you are bidding on. The process of bidding on an item against other bidders can give many people a rush of adrenaline, but make sure that you do not overbid simply to win the auction. Many bidders get caught up in the excitement of outbidding other people and tend to pay more for an item than what it is worth.

Consumer Research for Consumers
Author(s): Max H. Bazerman
Source: Journal of Consumer Research, Vol. 27, No. 4 (March 2001), pp. 499-504 Published by: The University of Chicago Press
Stable URL: http://www.jstor.org/stable/10.1086/319624 .
Accessed: 18/11/2013 21:08