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CIPS L4M5 Exam Syllabus Topics:

Section	Objectives
Topic 1: Negotiation strategies and tactics	- Approaches to negotiation 1. Concession strategies 2. Collaborative and competitive strategies 3. Tactical behaviours and influence techniques
Topic 2: Power, ethics and communication in negotiation	- Influencing factors 1. Sources of negotiation power 2. Communication and interpersonal skills 3. Ethical considerations in negotiation
Topic 3: Negotiation fundamentals	- Principles of commercial negotiation 1. Types of negotiation (distributive vs integrative) 2. Definition and purpose of negotiation
Topic 4: Negotiation planning and preparation	- Preparation techniques 1. Setting objectives and targets 2. Information gathering and analysis 3. BATNA and reservation points

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CIPS Commercial Negotiation Sample Questions (Q105-Q110):

NEW QUESTION # 105
A wide range of factors may be taken into account by suppliers when setting or negotiating prices. Which of the following are external factors in pricing decisions? Select TWO that apply.

A. Competition in the market
B. Where the product is in its lifecycle
C. Customer perception of value
D. Cost of production
E. Costs of sales

Answer: A,C

Explanation:
External factors in pricing decisions include Competition in the market (A) and Customer perception of value (D). These factors are outside the supplier's direct control but influence pricing strategies to remain competitive and meet customer expectations:
Competition in the market (A): Market competition dictates how much a supplier can charge without losing business to competitors.
Customer perception of value (D): How customers perceive the product's worth affects its acceptable price range.
These factors are considered external as they relate to market dynamics rather than internal cost structures, according to CIPS's guidance on pricing influences.

NEW QUESTION # 106
Absorption costing is when the total cost per each unit of output:

A. Includes an allocation of producing an additional unit
B. Includes an allocation for a proportion of total production costs
C. Includes an allocation towards indirect costs used in its creation
D. Includes an allocation towards the activity cost of its creation

Answer: C

Explanation:
Reference: CIPS L4M5 Study Guide, Section 2.2 - Cost and Price Analysis

NEW QUESTION # 107
During a negotiation, Jose Gomez, the salesperson for a strategic supplier, states that his sales director will not approve discounts against initial purchases. However, Jose offers a 5% discount against the aftercare package, which will provide the same monetary saving. Sally Pampas requires both the product and the aftercare package and has an objective to achieve a 5% discount off the purchase price. To achieve a win-win (integrative) negotiation, Sally should:

A. Decline the offer and walk away from the negotiation
B. Ask Jose to apply a discount against the price
C. Ask Jose to apply the 5% discount against the purchase price
D. Accept the offer of a discount against the aftercare package

Answer: D

Explanation:
Reference: CIPS L4M5 Study Guide, Section 1.2 - Approaches to Negotiation

NEW QUESTION # 108
Which of the following is the most appropriate approach to investors or shareholders who have high level of influence but low interest in the running of business?

A. Manage them closely
B. Engage and keep them satisfied
C. Keep these people inform through general communication media
D. Engage and consult with them regularly

Answer: B

Explanation:
Explanation
Investors or shareholders who have high level of influence but low interest belong to 'Keep satisfied' quadrant of Mendelow's Stakeholder Matrix.
You may read 2 versions from L4M1 and L4M5 here:

Table Description automatically generated

LO 1, AC 1.1

NEW QUESTION # 109
Which of the following is categorised as fixed cost?

A. Land rental paid in advance
B. Governments taxes
C. Raw materials for next year production
D. Additional pallet hires due to higher demand in year-end season

Answer: A

Explanation:
:
An organisation's expense can be categorised into three groups:
Fixed Costs - costs that do not change with output.
Variable Costs - costs that vary in direct proportion to output.
Semi-variable costs - costs that are a combination of the above, with both a fixed and variable element.
Among the four options:
"Land rental paid in advance": This is fixed cost. The rental won't increase when the production increases.
"Additional pallet hires due to higher demand in year-end season": This can be identified as semi-variable cost (or step cost).
"Governments taxes": The taxes are often levied by a percentage of income or revenue. Therefore, it is variable
"Raw materials for next year production": This is obviously variable cost.

NEW QUESTION # 110
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