Deck 12: Formal Negotiating

Question 1

Successful salespeople always make great negotiators.

Answer 1

False

Question 2

In negotiations,those who are the first to offer a concession often find the other party giving a similar one in return,regardless of the power in the relationship.

Answer 2

False

Question 3

The technique of lowballing subdues the importance of getting signatures on contracts and agreements as soon as possible.

Answer 3

False

Question 4

The less information collected about what a buyer hopes to accomplish,the better negotiators will be able to arrive at a win-win decision.

Question 5

While negotiating,a compromiser gives up less than a competing person but more than an accommodating person.

Question 6

Formal negotiations generally take place only for very large or important prospective buyers.

Question 7

Ambush negotiation occurs when either party begins to negotiate with a win-lose strategy when the other party does not expect it.

Question 8

The best negotiation situation is when there is a distinct difference in power.

Question 9

In a negotiation,individuals in the accommodating mode are the exact opposite of competing people.

Question 10

Negotiations differ from regular sales calls in that they involve less intensive planning and a smaller number of people from the selling firm.

Question 11

The less the participants,the more the time required to reach an agreement in a negotiation.

Question 12

In win-lose negotiating,the negotiator attempts to secure an agreement that satisfies both parties.

Question 13

To allow for concessions,the target position should reflect higher expectations than the opening position.

Question 14

Putting the key issues at the beginning in an agenda is advantageous.

Question 15

In general,in a negotiation meeting,the size of the seller's team should be more than the size of the buyer's team.

Question 16

The two radically different negotiation philosophies are win-lose and lose-win negotiating.

Question 17

Experienced negotiators find weekends best for negotiations.

Question 18

A company's sales representative who develops three alternative strategies to secure a premium shelf position engages in adaptive planning.

Question 19

When developing objectives,negotiators need to sort out all issues that could arise in the meeting,prioritizing them by importance to the selling firm.

Question 20

An agenda sets boundaries and helps keep parties in the negotiation on track.

Question 21

Sarah is the lead negotiator for her company,which wants to sell its products to Cible Department Store.Sarah explains to the managers at Cible how both her company and Cible can improve their profits.Which of the following philosophies of negotiation is Sarah exemplifying?

A) Win-win
B) Zero-sum
C) Distributive
D) Positional
E) Hard-bargaining

Question 22

Sazaki Motors Company and its dealer Best Automobiles wanted to conduct a two-day workshop for dealers at their own premises.After negotiations,it was decided that the first day of the workshop would be arranged in the company's auditorium,while the second day of the workshop would be arranged at the dealer's premises.Identify the negotiation accepted in this scenario.

A) Win-win negotiating
B) Win-lose negotiating
C) Win-win not yet negotiating
D) Ambush negotiating
E) Negotiation jujitsu

Question 23

All concessions in a negotiation are tentative until the final agreement is reached and signed.

Question 24

How do negotiations differ from regular sales calls?

A) They generally involve a less number of people from the selling firm than do regular sales calls.
B) They generally involve more intensive planning than do regular sales calls.
C) They require less intensive planning than do regular sales call to obtain a sale,if a sale occurs at all.
D) They tarnish goodwill more than regular sales calls do by wasting the buyer's time after a business is closed.
E) They create a true dialogue more often than regular sales call in which the ultimate close is a natural conclusion.

Question 25

Generally,the goal of negotiation is to develop a short-term partnership with a buyer.

Question 26

Red herring is a win-win tactic that involves bringing up a major point first to distract the other side from considering minor issues.

Question 27

Which of the following is a desirable trait for a negotiator?

A) A fear of conflict
B) Belligerence
C) A willingness to take risks
D) Constant resistance to change
E) Introversion

Question 28

The best defense against budget limitations is to do your homework before going into a negotiation session.

Question 29

After being accused of overcharging,Brian steps back and redirects the negotiation back to the issues that were initially being discussed.Brian is engaging in negotiation jujitsu.

Question 30

In win-win not yet negotiating,the buying team achieves its goals while the selling team doesn't.

Question 31

While holding formal negotiations with Cible Department Store,Croustilles-Lay representatives can negotiate:

A) the location of point-of-purchase displays of Croustilles-Lay products.
B) delivery schedules.
C) how frequently the snacks would be restocked on store shelves.
D) what would be done with the products that cross their expiry date.
E) all of these.

Question 32

Which of the following refers to the bargaining process through which buyers and sellers resolve areas of conflict and arrive at agreements?

A) Commercialization
B) Attribution
C) Crowdsourcing
D) Brainstorming
E) Negotiation

Question 33

The selling team should always refuse nibbling requests from the buyer after a contract has been signed.

Question 34

A manufacturer of lawn furniture wants to sell its furniture to a large chain of resorts.The buyer and seller prepare for the negotiations.Which of the following items are likely to be covered during the negotiations?

A) Credit terms and delivery terms and conditions
B) How complaints will be resolved
C) Delivery schedules
D) How the furniture will be designed
E) All of these

Question 35

A seller who negotiates a higher price after the price has been agreed upon engages in lowballing.

Question 36

Which of the following statements is true about negotiations?

A) Negotiations are also known as sales presentations.
B) Negotiations exclude people who are not part of a selling firm's sales department.
C) Formal negotiations can take place with anyone who is classified as a buyer or user.
D) Negotiating is not an expensive endeavor as it hardly requires people to spend time.
E) If a customer is large or important enough,almost anything can be negotiated.

Question 37

An effective defense against the good guy-bad guy routine is for the selling team to know its position clearly and to not let the buyer's negotiating tactic weaken it.

Question 38

A manufacturer of cast iron frying pans wants to place its frying pans for sale in a major retail store.Which of the following would be a negotiable item?

A) Prices and pricing allowances for volume purchases
B) Inventory levels the retail store should maintain
C) Retail pricing points
D) Location of shelf positioning
E) All of these

Question 39

Why is it necessary for a good negotiator to have a willingness to take risks and an ability to tolerate ambiguity in a business negotiation?

A) To supply information to customers so that they can pick features that they do not need
B) To both accept and offer concessions during a meeting without complete information
C) To try to get every concession possible out of the buyer
D) To indulge in browbeating,which will help both parties achieve their organizational goals
E) To aggressively create new "needs" in customers through persuasion

Question 40

To develop long-term partnerships,sellers should try to get every concession possible out of their buyers.

Question 41

Which of the following is the best time preferred by an experienced negotiator to begin negotiations?

A) After-hours in a workweek
B) During a lunch break on a Monday or a Tuesday
C) Friday evenings
D) Mornings in the middle of a workweek
E) During the weekends

Question 42

Roy is power oriented.He does not tolerate people on his negotiating team who do not go along with his ideas.Roy's resolves conflict in the _____ mode.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 43

Which of the following statements is true about planning for a negotiation session?

A) Experienced negotiators find weekends and after-hours best for negotiations.
B) A buyer's office is typically the best place to hold negotiation sessions.
C) Time allotted to a negotiation session should be no more than a few hours.
D) Individuals should prepare themselves emotionally for the stress that will occur within a negotiation session.
E) To allow for concessions,the opening position should reflect lower expectations than the target position.

Question 44

Jane doesn't like conflict.In a negotiation,she rarely objects to what the other side proposes,and she seldom agrees to anything.She acts like she does not want to be involved in the negotiation at all.Jane is most likely to resolve conflict in negotiation in the _____ mode.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 45

Jane,the owner of Best Bakes,introduced chili-flavored cookies into the market.As an introductory offer,she is willing to give 5 percent price discount for retailers who sell her products.If this does not work,she is willing to give them a credit term of 7/10,n/45.If this offer fails to make any impact on the retailers,she is ready to bear end-to-end transportation costs.Identify the prenegotiation method used by Jane in this scenario.

A) Adaptive planning
B) Negotiation jujitsu
C) Ambush negotiating
D) Trial balloon
E) Value proposition

Question 46

Which of the following statements is FALSE about negotiation teams?

A) Team leaders manage a negotiation session.
B) Because of the team members' different backgrounds,a team as a whole tends to be more creative than one individual can be.
C) Negotiation preparation includes deciding who will answer which types of questions.
D) In general,the seller's team should be larger than the buyer's team.
E) Salespeople rather than executives are often selected to serve as team leaders since they possess intimate knowledge of the buyers and their needs.

Question 47

Annette is representing Jackson Hauling,a new commercial trash collection service,in a negotiation with the house manager of one of the local university's social fraternities.Annette first plans to suggest that her company can place a larger dumpster behind the fraternity house than the current dumpster the other collection service company provides.She then plans to propose that the group's trash be picked up twice a month.She hopes the frat will accept a once-a-week pickup given the larger size dumpster provided,and she knows that because Jackson is a "small-time" startup company with only a limited number of trucks,the most she can offer is twice weekly pickup.Twice monthly pickup is Annette's _____ position.

A) minimum
B) target
C) opening
D) maximum
E) average

Question 48

People who use the compromising mode to resolve conflicts:

A) attempt to find the best solution that will completely satisfy all parties.
B) generally give up more than an accommodator but less than a competing person.
C) pursue their own goals and objectives completely at the expense of the other party.
D) often find a solution that partially satisfies both parties.
E) are generally very cooperative and very unassertive.

Question 49

Highly cooperative and unassertive people resolve conflict in the _____ mode.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 50

Vince,a part-time caterer,negotiates a catering contract with Kevin for an annual corporate Memorial Day picnic.Vince does not want to concede to Kevin's demands for unlimited seconds on fried chicken without any increase in what he is paid.However,he accepts the contract without any counterbalancing concession from Kevin.Vince resolves the conflict in the negotiation in the _____ mode.

A) competing
B) collaborating
C) contending
D) accommodating
E) compromising

Question 51

Mac is the house manager for Sigma Chi,a social fraternity.He is negotiating with Hemphill Hauling for trash pickup services at the fraternity house.He prefers a three-days-per-week trash pickup schedule,but he is also willing to accept a two-days-per-week arrangement.While negotiating with the company,he asks for daily trash pickup service.The two-day trash pickup schedule is Mac's:

A) minimum position.
B) target position.
C) opening position.
D) maximum position.
E) average position.

Question 52

People who resolve conflict in negotiations in the _____ mode are often both uncooperative and unassertive.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 53

Ernie wanted Harry's pickup truck for a weekend as he was planning to go on a solo trip to California.He offered Harry a rent of $50 for two days.He also considered different strategy revisions if Harry disagreed to this original plan.These strategy revisions included an offer to clean Harry's garage for 2 weeks and an offer to assist Harry in his garage for a week.Identify the method used by Ernie in this scenario.

A) Ambush negotiating
B) Red herring
C) Negotiation jujitsu
D) Value proposition
E) Adaptive planning

Question 54

In a negotiation,to allow for concessions,the expectations expressed in the seller team's opening position should be:

A) equal to its target position.
B) higher than its target position.
C) equal to the buyer's minimum position.
D) lower than its target position.
E) lower than its minimum position.

Question 55

Jack is the house manager for Beta Theta Pi,a social fraternity.He is negotiating with Jackson Hauling for trash pickup services at the fraternity house.He prefers a three-days-per-week trash pickup schedule,but he is also willing to accept a two-days-per-week arrangement.While negotiating with the company,he asks for daily trash pickup service.The three-day trash pickup schedule is Jack's:

A) minimum position.
B) target position.
C) opening position.
D) maximum position.
E) average position.

Question 56

Which of the following statements is true about negotiation teams?

A) The selling team should be typically larger than the buying team.
B) Because of the interaction among team members,individual creativity is stifled.
C) It is always easier to reach a decision when there are more team members.
D) It always takes less time to reach a decision when there are more people involved on each side.
E) Each team member should have a defined role in a session.

Question 57

Which of the following is NOT a conflict-handling mode?

A) Competing
B) Accommodating
C) Avoiding
D) Agitating
E) Compromising

Question 58

Negotiators in the accommodating mode are usually _____.

A) assertive
B) uncooperative
C) generous
D) power oriented
E) disobedient

Question 59

Typically,the best place to hold a negotiation is at:

A) the buyer's office.
B) a neutral site.
C) both the buyer's office and the seller's office,alternatively.
D) the seller's office.
E) the seller's factory.

Question 60

The representative of a packaged food service informed Carla,the cafeteria manager of a university,that the company would be making bulk deliveries every two weeks instead of its current weekly service.Carla complied even though this delivery schedule would require her to make extra arrangements to store the food.In this scenario,Carla's approach to conflict resolution reflects the _____ mode.

A) competing
B) opposing
C) accommodating
D) collaborating
E) compromising

Question 61

Fred,the owner of Blue Blooms,was interested in the poinsettia tree racks manufactured by Creative Furniture Company.In a negotiation session,he said,"I would love to buy three of the poinsettia tree racks manufactured by your company.It would provide me with much more space to display my plants.But my budget allows only $900 total,including all delivery costs.You have to reduce the price from $1200 to $900,or else I cannot afford it." Identify the win-lose strategy used by Fred.

A) Budget bogey
B) Lowballing
C) Red herring
D) Browbeating
E) Trial balloon

Question 62

Clare,a florist,opened a new store and wanted to purchase a new refrigeration display cabinet for fresh-flower arrangements.She entered into a deal with Alpha Refrigeration Systems for two refrigeration units at $600 each.But,after delivering the units,the salesperson demanded another $100 as delivery charges,which was not mentioned in the deal.Identify the win-lose strategy used by the salesperson.

A) Good guy-bad guy routine
B) Browbeating
C) Red herring
D) Trial balloon
E) Lowballing

Question 63

_____ is a win-lose strategy in which one team brings up a minor point first to distract the other team from considering the main issue.

A) Budget bogey
B) Negotiation jujitsu
C) Red herring
D) Trial balloon
E) Limited authority

Question 64

A person who is both cooperative and assertive is in the _____ mode of resolving conflicts.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 65

Brenett,a celebrity,wants to enter into a contract with Valley World,a landscaping company.During a negotiation session,Brenett says,"I would like to do business with your landscaping firm,but companies in your industry do not tend to last more than a couple of years.I also heard a rumor that your partner is thinking of disinvestment.You must be difficult to work with.Maybe I should wait." Identify the win-lose strategy used by Brenett in this scenario.

A) Budget bogey
B) Trial balloon
C) Good guy-bad guy routine
D) Browbeating
E) Emotional outburst

Question 66

A sales team from Goodway Inc.enters negotiations with a large poultry processing company.Its objective is to sell the company 40 pressure washers with a 5 percent quantity discount and a share of all shipping costs.But,it will walk away from the negotiation table satisfied if it can convince the company to buy 20 washers with a 2 percent discount.What other type of objective does it need to develop?

Question 67

The best situation,from a negotiation standpoint,would be to have on both teams a number of people who generally use the _____ to resolve conflicts.

A) collaborating mode
B) competing mode
C) avoiding mode
D) accommodating mode
E) compromising mode

Question 68

Purge Purifying Systems,which manufactures filtration systems for industries,has entered into a U.S.$50 million deal with Fabon Fabrics Inc.During a negotiating session,Alex,a member of the sales team reacted,"Who are you trying to kid? You need our company's filtration systems to maintain your product quality.You have to pay an extra $20 per system and just cut costs somewhere else." Monroe,the team leader of the sales team interrupted him and said,"Now wait a minute.These are our friends you are talking to.How about we only charge $10 extra per system and split the shipping charges with you? Does that not sound fair?" Identify the win-lose strategy adopted by the sales team of Purge Purifying Systems.

A) Lowballing
B) Budget bogey
C) Good guy-bad guy routine
D) Browbeating
E) Limited authority

Question 69

Which of the following statements is FALSE about negotiation preliminaries?

A) Every effort should be made to ensure a comfortable environment for all parties in a negotiation.
B) Seating should be arranged such that the members of the two sides can interact.
C) Engaging in small talk before getting down to business should be avoided.
D) If the buying team arranges a physical arrangement that places the selling team at a disadvantage,the selling side should stop the meeting until better arrangements are made.
E) As much as possible,the selling team should try to establish a win-win environment.

Question 70

John is the owner of a chain of restaurants in Texas.When tilers from Johnson Tiles were laying tiles in one of the restaurants' newly refurbished restrooms,John calmly tells the salesperson of Johnson Tiles,"We need to renegotiate the price of these tiles.I have learned that you charge a 50 percent markup,and as a small-business owner,I find that unacceptable." Which of the following win-lose strategies is most likely being used by John in this scenario?

A) Browbeating
B) Ambush negotiating
C) Lowballing
D) Limited authority
E) Red herring

Question 71

Which of the following statements about the agenda for a negotiation is mandatory?

A) The selling team should always give the buying team responsibility for setting the agenda.
B) So as not to waste time,the key issues should be listed first on the agenda.
C) The buying team should never bring the agenda to the negotiation table.
D) The agenda should never be negotiated by the buyer's team.
E) None of these

Question 72

Why is it usually advantageous to not place key issues of a negotiation at the very beginning of the agenda?

A) It provides an opportunity to learn the other side's bargaining style and concession routines.
B) It saves time as it becomes obvious that if an agreement can't be reached on the smaller issues then there is no point in discussing the key issues.
C) By conceding most of the smaller issues in the beginning,the selling team creates a moral "debt," which the buying team is likely to have to repay by conceding on the key issues.
D) It allows the team setting the agenda to wear down the other side,which will likely result in them agreeing to all the key issues proposed.
E) It provides the sellers an advantage as the buyers lose interest toward the end of the session when the key issues are discussed.

Question 73

_____ is a strategy used by some buyers to engage in a win-lose tactic of negotiation when the other party does not expect it.

A) Lowballing
B) Good guy-bad guy routine
C) Browbeating
D) Budget bogey
E) Ambush negotiating

Question 74

Which of the following is an appropriate guideline for effective negotiations?

A) Listening carefully is extremely important.
B) The ability to ask probing questions is important to keep the negotiations on track.
C) Periodic status reports on what has been decided and what needs to be decided is an effective way of keeping negotiations on track.
D) One should keep in mind that during negotiations people have a desire to retain their positive identities.
E) All of these

Question 75

A salesperson who uses the _____ mode tries to reach an agreement that does not completely satisfy either of the parties.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 76

Which of the following statements is true about negotiation preliminaries?

A) Negotiation preliminaries are more important in U.S.business meetings than in international ones.
B) The room temperature should be set colder than normal to speed up the actual negotiation process.
C) Time just prior to the negotiation should be spent on developing negotiation skills,not on engaging in friendly conversations.
D) An agenda that states what will be discussed and in what sequence should be created.
E) Key issues should always be placed first in the agenda so that it will be advantageous.

Question 77

Which type of meeting allows people to creatively explore various methods of achieving goals?

Question 78

Maggie,a human resource executive of a software company,booked a weekend executive retreat for a few employees at a holiday resort in Alaska.The arrangements were made,and she paid an advance.Later,the resort owner called her and said,"If your group does not check out by 8:00 a.m.on Sunday,I will have to charge them for the entire day." Identify the win-lose strategy used by the resort owner.

A) Trial balloon
B) Ambush negotiating
C) Limited authority
D) Red herring
E) Browbeating

Question 79

Emily opens a negotiation session by saying,"I think we're all here today looking for a win-win deal.Unless we all leave this table feeling that we have satisfied our objectives as much as possible under the given circumstances,I'm going to consider this negotiation a failure." Emily most likely resolves conflict in the _____ mode.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising

Question 80

A negotiator says,"Can't we all just get along and split the extra costs down the middle?" From this statement,it can be said that the negotiator is using the _____ mode of conflict resolution.

A) competing
B) accommodating
C) avoiding
D) collaborating
E) compromising