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Individuals who successfully complete the L4M5 Commercial Negotiation Certification Exam will have a globally recognized certification that demonstrates their expertise in commercial negotiation. Commercial Negotiation certification can help individuals advance in their careers by opening up new opportunities and increasing their earning potential. It can also help organizations by ensuring that their procurement and supply chain professionals are equipped with the necessary skills to negotiate effectively and get the best deals for their organization.

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CIPS Commercial Negotiation Sample Questions (Q254-Q259):

NEW QUESTION # 254
Which of the following are ways of developing rapport when undertaking a negotiation?

A. 2 and 4 only (Using probing questions and Actively showing empathy)
B. 1 and 2 only (Engaging in assertive communication and Using probing questions)
C. 1 and 3 only (Engaging in assertive communication and Engaging in active listening)
D. 3 and 4 only (Engaging in active listening and Actively showing empathy)

Answer: D

NEW QUESTION # 255
Effective listening is important in integrative negotiations. Is this statement correct?

A. No, as effective listening is important only in a distributive negotiation
B. Yes, as it means the supplier's attempts at negotiation can be stopped quickly with reasoning
C. No, as what the other party has to say is not important
D. Yes, as it allows issues to be shared and understood between all parties

Answer: D

Explanation:
Effective listening is crucial in integrative negotiations because it promotes understanding and collaboration.
By actively listening, parties can identify shared interests and address concerns, which supports the goal of reaching mutually beneficial solutions. This is a key component in CIPS guidelines on successful integrative negotiation practices.

NEW QUESTION # 256
In general, which of the following is the consequence of a flatter demand curve?

A. Price inelastic
B. Unit price elastic
C. Quantity elastic
D. Price elastic

Answer: D

Explanation:
Elasticity refers to the responsiveness of quantity demanded or quantity supplied to a change in price or another factor.
In microeconomic graphs, elasticity and inelasticity can be shown by the slope of the demand curve. If a demand curve is almost horizontal, then the product pricing can be described as very elastic. If a demand curve is almost vertical, then the product pricing can be described as very inelastic.
The formulae of elasticity:
Text Description automatically generated with low confidence

Table Description automatically generated with medium confidence

LO 2, AC 2.2

NEW QUESTION # 257
Premium pricing strategies used by suppliers are characterised by which of the following? Select TWO that apply.

A. Products are charged at a price based on supplier's reputation
B. Price is based on cost structures
C. Typically found in the early part of the product life cycle
D. Premium price is determined by variable costs only
E. This strategy is often used when supplier attempts to enter new market

Answer: A,C

Explanation:
There are several pricing strategies used by suppliers:
Cost-plus pricing - Total variable + Fixed cost + profit
Premium pricing - based on branding. Supplier determines to charge a very high price, notconnected with cost structures, usually based on its reputation and/or the perception that the product/service is of a superior quality. This strategy typically found in the early part of the product life cycle/when demand exceeds supply.
Penetration pricing - Supplier attempts to enter a new market or extend its share in an established one. It is characterised by price reductions to increase volume, followed by steady price increases; may even be loss leading at start (no profit made) Marginal cost pricing - covers only variable cost Market pricing - suppliers prices in line with what the market is willing to pay

NEW QUESTION # 258
Sumitomo Rubber Industries (SRI) is a Japan-based tyre manufacturer. In order to increase production, SRI is sourcing rubber from Southeast Asian firms. Which of the following micro factors are most likely to shift the balance of power to supplier? Select TWO that apply

A. SRI sets up its own rubber plantation
B. There are no close substitutes for rubber
C. Costs of changing suppliers are high
D. Rubber from different suppliers is virtually similar
E. SRI's purchase amount makes significant proportion of supplier revenue

Answer: B,C

Explanation:
:
There are many factors that can influence the balance of power in a negotiation. These factors are classified into 3 levels:
Macro level: STEEPLE framework: social, technological, economic, environment, political, legal and ethical Micro level: Porter's five forces:
Diagram Description automatically generated
One-to-one buyer-supplier dynamics.
The question asks about the micro factors that increases supplier's bargaining power. Among 5 answers, only
2 are likely to increase buyer's power:
There are no close substitutes for rubber: the buyer has to buy rubber, not any other material.
Costs of changing suppliers are high: buyer entails a large barrier if they want to switch supplier.
Other answers cannot be correct because:
SRI sets up its own rubber plantation: Buyer secures its own supply
SRI's purchase amount makes significant proportion of supplier revenue: Suppliers are reliant on buyer. If the buyer stops buying from them, they can face serious cash flow problems Rubber from different suppliers is virtually similar: undifferentiated product would shift the power balance towards buyer.

NEW QUESTION # 259
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L4M5 Real Brain Dumps & L4M5 Reliable Study Guide

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CIPS Commercial Negotiation Sample Questions (Q254-Q259):

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