Here is an example of conditioning: A Procurement Manager from a market leading retailer offered his business card which was printed on thin paper. It looked like it had been printed by an "all-expenses spared" print shop round the corner! Just a small detail, but it conditioned the receiver to believe that whatever the retailer's market share or market image to its customers, they are a company that controls costs above all other considerations.

Conditioning is the process of creating an impression in the mind of the other party about the nature of the supply and demand markets with which we are dealing.

Sometimes, the script in our heads says "We'll never achieve "x", so we'll only ask for "x minus y".

Conditioning usually seeks to colour the perception of one or more of the following dimensions:
1. The balance between supply and demand e.g. the scale of the buyer's demand or the shortage of supply
2. The level and trend of costs and/or prices
3. The performance, actions or intentions of other players in the market.
4. The relative capabilities of the supplier as a provider in the market

Are these lies? Is this unethical? That has to be your call but let the buyer beware! Sellers always condition buyers so that they can win business. Whether you feel it is ethical or not, all of us are subject to conditioning in our private and business lives. The issue is: should buyers condition sellers in the same way?

The answer is "yes" provided that you do not tell a falsehood or an untruth. Deceit is unacceptable in any circumstances.

But if a supplier believes that they are likely to win a contract with you, is it unethical to communicate to them that they are actually in a competitive situation? Probably not.

So, there are two aspects to conditioning:

1. Passively recognizing when it is done to us so that we can neutralize it and minimize the impact on our behaviour.  
2. Actively using it to influence the behaviour of other parties to that they fully understand our intent and our needs.

Be careful about how the deal is described.  Restrict the release of some information and present other information in a more favourable light. The purpose of this control of information is to manage the perceptions of suppliers in three key areas:

1. The nature of the market: how many competitors and what are they offering?
2. The nature of the need:  what product is really needed and how can the requirement best be specified?
3. The nature of the transaction: what quantities are needed over what period of time?

Fear About the Market

Many buyers learn their profession at the side of experienced practitioners who pass on the buyer's wisdom that competition is a good thing.  Gambits like "You need to bring your prices in line with the market" and "There are plenty of better deals around" are trying to condition the supplier to feel less certain about the market and that the buyer may have a better understanding of it.

Most buyers have a broad product portfolio and deal with so many different markets that they cannot be aware of developments in all of them. Sellers are experts in their own field. So if you want to be a player, make sure that you know and understand the market!

Uncertainty About the Need  

People who aren't sure about what they need often rely on trusted brands and it may be tough to persuade them to accept alternatives. It is easier to trust that the market leader will meet their needs than define the needs yourself. This is the inertia that you may need to overcome if you have to open up competition, whether you are a buyer or a seller. Gambits like "I'm quite happy with my current supplier" or "How do I know that your product will work?" imply that an improvement in price will be necessary to get anywhere close to winning the order.
  
Doubts About the Transaction

Sometimes, the buyer may create uncertainty about the quantities needed. The "building block" tactic involves deliberately understating the quantity and progressively revealing the figure.  The buyer is looking to establish a price-volume relationship which they will use to their advantage in the next phase of the plan by leveraging the supplier's uncertainty about the transaction -- in this case, the quantity required. Is this ethical? Well, no untruths are being told but withholding some information, for example about how many units you are going to need, is common practice.   Some buyers might even invent "competitors" who only exist in the supplier's imagination!

Tips to Condition the Other Party

1. Plan what messages each party needs to achieve
2. Communicate a consistent message even if different stakeholders are involved
3. Get your logic in first; tell the other party "why not" rather than react to them telling you "why"
4. Try to identify the assumptions that underpin your behaviour. Are they valid or can you challenge them?

Sellers' Conditioning Statements - Examples

The normal price is 100, but we can do you a deal at 95.
I can knock 5% off that if you order 1000
The trade discount is 40%
We are very busy at the moment, but I think we can squeeze you in.
I think we have sold the last case- no! You're luck is in! I've got one left!
No other firm in the market has a delivery performance to match us.
Unexpected frosts have caused the failure of the Brazilian coffee harvest again, so I suggest that you buy now before prices go up.

Buyers' Conditioning Statements - Examples

We are in the middle of a cost out, cost down process.
Our budgets have been reduced again, and we have a zero inflation policy
Head office won't let us use supplier's terms and conditions; you have to use our general trading terms
I've had many offers from other suppliers, but don't worry, I'm sure you can match them