CHAPTER ONE
1.0INTRODUCTION
1.1  BACKGROUND OF THE STUDY
The basic goal of any organization or industrial activities is the development and manufacture of products that can be marketed and maximizes profit and make profit. This goal is accomplished by the appropriate blending of what many management authorities calls the for (5) m’s which are machine, man. Material, money and management, material organization. No industrial organization can operate without them; they must be available at the right time in the right quantity at the right price and at the right place.
Whether in period of inflation, or price stability or recessim, obtaining material at the right price can literally mean the difference between a firms, success and failure. Hence the right price is of importance to every organization, profit or non profit.
Therefore to obtain the right price, there are (3) three basic method which can be used by a buyer,
These are;
1 Published price list
2 Competitive bidding
3 Negotiations
When the buyer is not satisfied with the price after using published price lists and competitive bidding, he resorts to negotiation. According to the chambers 20th Century Dictionary “NEGOTIATION” means to confer for purpose of mutual agreement the Webster dictionary defines it as conferring, discussing or bargaining to reach agreement in business transaction.
According to Oyeoku, (1993), negotiation is just but a process whereby representatives of the buying organization and selling organization attempt to reach precise agreement on all terms and conditions which make a contract come into being. It involves a thorough analysis of all aspects of purchasing in each aspect and the ritual as a common understanding of what is best in interest of both parties. In successful negotiation both sides win, the wining are, seldom equally divided. Invariably one side wins more than the other. This is as it should be in business.