Price Increase

The Company Director has announced a price increase on products. However, there are signed long-term contracts with several major clients at fixed prices, which obligations must be fulfilled. The company's management demands that the Sales Department Managerincreases prices in existing contracts or terminates unprofitable agreements. A Major Client is not even willing to entertain the idea of a price hike. They entered into this contract because it offered the most market-appropriate price, which forms the basis for the profitability of all projects.

Positions before negotiations:

Company Director - aims to maintain the profitability of the company while purchasing raw materials at the new prices. In response to requests from the sales department for alternative preferences for clients in return for price increases, the answer was a refusal. It would be unprofitable. Prices need to be increased without additional conditions.

Sales Department Manager- unhappy with the price increase, worried about forthcoming difficult negotiations with clients. Wants to explain to management that under the terms of the existing contracts, there is no possibility of an increase, and terminating them will result in penalties, loss of clients, and reputational costs.

Major client - outraged by the change in conditions despite having a signed contract. Understands that terminating the contract is still undesirable, as they are unlikely to find such a price in the market under the same conditions.