Price Negotiations in Commodity Markets

Owing to the difficulty with differentiating between commodities, pricing is of great importance in these markets. In addition to the market and competition-oriented pricing policy, pricing—in the form of negotiations—plays a special role in this regard. Both business-to-business markets (e.g., due to the frequent lack of list prices) and business-to-consumer markets (e.g., due to the granting of discounts having been made easier) show an increasing exchange of services in the form of negotiation interactions between market partners. In marketing science, price negotiations have to date only attracted limited consideration; consequently, this chapter provides a holistic approach to business negotiation management. This structural approach proposes a control cycle, starting with the initial negotiation situation’s preliminary analysis (analysis), the negotiation and the negotiating team’s organization (organization), as well as the negotiation’s detailed preparation (preparation), up to the actual negotiation management (management) and the final negotiation controlling (controlling). This chapter discusses the management approach to price negotiations in detail and makes a final conclusion regarding future challenges related to price negotiation management and how companies implement this management.