Business Case Studies & Business Publications

Leveraging the Zone of Possible Agreemen...

Whitler, Kimberly,...

Technical Note

Leveraging the Zone of Possible Agreement (ZOPA) to Make Pricing Decisions

Whitler, Kimberly; Hagerty, Serena; Zhang, Zhihao; Maiden, Stephen E.

M-1045 | Published February 28, 2024 | 4 pages Technical Note

Collection: Darden School of Business

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A key negotiating concept, the Zone of Possible Agreement (ZOPA), allows a buyer and seller to reach a mutually acceptable price. This technical note provides an overview of ZOPA for both individual-level negotiations and company-level pricing decisions, highlighting its importance to marketing. Challenges in applying ZOPA are discussed, as well as its role in value creation and exchange. Students are encouraged to consider the real-world impacts of ZOPA-based pricing on business and brand management. This note is suitable for use in graduate and undergraduate courses on marketing, negotiation, brand management, and product pricing.

- Understand how price expectations accepted by a seller and a buyer form the place where negotiation can occur, or the ZOPA - Examine how ZOPA relates to the pricing of products - Consider why ZOPA matters for marketers (using an example)