7th National Negotiation Competition 2023

September 30th – October 2nd 2023

General Information

PROPOSITION FOR PRELIMINARY ROUND

1. Ramesh Builders, a real estate developer in Delhi, is facing a major challenge with sales
for their new luxury residential project called New Heights located in South Delhi. The
project was launched 6 months ago and features 200 premium 4 and 5 BHK apartments
with prices starting at Rs. 4 crores going up to Rs. 10 crores for the penthouse units.
2. While the launch saw an encouraging response with nearly 50% of the units getting
booked initially, sales have slowed down considerably over the last 2 months as the
overall property market enters a sluggish phase due to high home loan interest rates and
weak consumer sentiment.
3. Ramesh Builders had taken a substantial Rs. 500 crore construction loan from a private
bank to finance the New Heights project. With sales drying up now, the company is keen
to offload the remaining 100 units quickly before high interest costs of 14% p.a. start
accruing on the loan. As part of an aggressive marketing strategy to boost sales, Ramesh
Builders decides to bring on board a famous Bollywood celebrity as the brand ambassador
who can help create buzz and visibility around New Heights.
4. After evaluating various A-list celebrity options, Ramesh Builders approaches popular
actor Ranveer to be the face of New Heights. Ranveer is excited when he hears about the
offer as he has been actively looking for lucrative endorsement deals to add to his
portfolio. In principle, he agrees to sign on as the brand ambassador but the negotiation
runs into trouble around his proposed endorsement fees.

Society for Young Advocates and Researchers | Drafted by Mr. Sidharth Kapoor, Manager- Strategy & Policy, Presolv360
5. Ranveer wants Ramesh Builders to pay him Rs. 2 crores as base fees plus additional
incentives linked to sales targets for the endorsement deal. This deal will require him to
promote New Heights for a 1-year term across print, digital, and social media platforms
along with appearing at select project events.
6. However, Ramesh Builders is of the view that this base fee itself is too steep considering
the sluggish real estate market conditions currently. The company has budget constraints
owing to thin margins and high construction costs and can only afford to pay Rs. 1 crore
for Ranveer's base fees.
7. Ranveer remains adamant on his Rs. 2 crore base fee citing his star power and huge fan
following of over 30 million across India. He argues that he warrants a premium fee,
especially when endorsing a relatively unknown brand like New Heights which needs his
star power more than established brands. Ranveer also points out that he has many other
endorsement offers in hand to choose from if this deal does not work out.
8. Ramesh Builders contends that the real estate market is quite weak at present across
most major cities and sales have slowed down drastically. Paying Ranveer such a high
base fee cannot be justified in the current scenario. The company has limited financial
flexibility having already invested over Rs. 300 crores in the project. Securing large funds
for celebrity endorsement was not accounted for earlier when planning the marketing
budget.
9. Both Ramesh Builders and Ranveer are keen to sign the endorsement deal but the huge
discrepancy in agreement over the fees is proving to be a major roadblock. The real estate
developer wants to minimize its marketing costs given the weak consumer demand while
the Bollywood star refuses to lower his price believing he can land other lucrative deals
instead.
10. This negotiation situation has reached an impasse now with both parties holding their
ground firmly. Unless either Ramesh Builders enhances its offer or Ranveer lowers his
rates, the brand ambassador partnership will not actualize. The ideal solution would
involve a compromise from both sides to meet mid-way on the endorsement fees. Since
the difference in endorsement fees quoted by each side is quite significant (Rs. 1 crore),

Society for Young Advocates and Researchers | Drafted by Mr. Sidharth Kapoor, Manager- Strategy & Policy, Presolv360
 it is questionable if a satisfactory middle point can be agreed upon in a timely manner to
close this deal that would advantage both sides.
11. In order to reach to a mutually acceptable, Ranveer has invited Ramesh Builders to
negotiate upon the concerned issue, which the Ramesh Builders has accepted. The
negotiation is decided to take place on 30th September, 2023.

Society for Young Advocates and Researchers | Drafted by Mr. Sidharth Kapoor, Manager- Strategy & Policy, Presolv360