MKTG 335 Exam 3

In a straight-line commission plan, a salesperson who sells 100 percent of his or her quota will be paid what percent commission? 75% 50% 100% 25% Not enough information is provided to answer this question.

100%

Developing an effective compensation plan is an important managerial task. As proof of this, the text notes that what percentage of workers would be willing to leave their jobs for a 10 percent salary increase? 23 50 33 20 43

43

_______ is a negotiation strategy that generates alternatives by adding new elements to a negotiation so that more items are negotiable. Expanding the pie Rolling the dough Eating the pie Log-cutting Logrolling

Expanding the pie

Henry works as a sales representative for Precious, Inc., a supplier of precious metals, such as gold, silver, and platinum. His top two clients (in terms of sales volume and dollars) are Candace Jewelers (a national jewelry chain) and Precision Equipment, Inc. (which uses the metals in manufacturing sophisticated lab equipment). Henry's assistant is Chloe, and his wife's name is Lenore. Think about the situation in terms of the principal-agent problem. In this scenario, who is the agent? Henry Precious, Inc. Lenore Candace Jewelers and Precision Equipment, Inc.

Henry

________ is a dialogue between two or more people or parties, intended to reach a beneficial outcome about one or more issues over which a conflict exists. Collaboration Negotiation Accommodation Logrolling Communication

Negotiation

_____ is calculated as revenue minus total costs. Profit Revenue Price Value Margin

Profit

Under which of the situations below is team negotiations not particularly beneficial? The negotiation is complex. You have sufficient time to organize a negotiation strategy. You want to display your strength to the other side. The negotiation has strong potential for a creative, integrative solution. The negotiation requires a narrow range of expertise.

The negotiation requires a narrow range of expertise.

______ is the gap between the seller's walk-away point and the buyer's highest willingness to pay. SOPA ZOPA BATNA BANTA ZAPPA

ZOPA

Daryl has been charged with putting together a negotiation team in response to a major product safety issue that has created significant rift in his firm's relationship with its largest buyer. If the firm wishes to renew its contracts with the buyer, it is critical that trust be rebuilt in the relationship. Based on this information, Daryl would be well advised to seek out a chief negotiator who has a(n) ________ negotiation style. collaborator compromiser avoider competitor accommodator

accommodator

A third party hired to represent the objectives of another party in a negotiation is known as a negotiation agenda. position. agent. principal. interest.

agent.

In conflict resolution, ________-type negotiators work best in situations in which an issue being negotiated is trivial and not worth the investment of time to resolve it.

avoider

In terms of sales compensation, a ________ is the fixed amount of money paid to a salesperson by the organization in return for work performed. commission bonus recoverable draw None of these answers are correct. base salary

base salary

With a ________ compensation structure, salespeople get the security of a steady income along with the economic incentive to achieve their individual sales goals. salary-only commission plus bonus commission-only base salary plus bonus base salary plus commission

base salary plus commission

The acronym BATNA stands for "________ Alternative to a Negotiated Agreement." Bogus Bold Better Best Bad

best

________ is an ethically ambiguous negotiation tactic, which involves making insincere threats or promises to a negotiation counterpart. Bluffing Logrolling Misrepresentation by commission Gaslighting Misrepresentation by omission

bluffing

In terms of sales compensation, a ________ is a lump sum paid out to salespeople for the achievement of their respective sales quotas. commission base salary bonus recoverable draw None of these answers are correct.

bonus

What is the most direct way through which salespeople can affect gross margin? by accepting lower salaries by holding price (as opposed to giving price discounts) when negotiating with customers by effectively managing travel costs by reducing variable costs within their business by reducing fixed costs within their business

by holding price (as opposed to giving price discounts) when negotiating with customers

While ________- style negotiators are willing to invest greater effort to understand the concerns and interests of the other party, they sometimes can create problems by transforming simple situations into more complex ones. accommodator compromiser competitor collaborator avoider

collaborator

________-type negotiators see conflict as a creative opportunity to satisfy both parties' goals. Competitor Avoider Collaborator Compromiser Accommodator

collaborator

A(n) ________-style negotiation approach is most useful in situations in which the opposite party is trustworthy, and the agreement is under a tight deadline. collaborator compromiser avoider competitor accommodator

compromiser

In a(n) ________ negotiation, the parties place different value on various issues and resolutions occur through cooperative exchanges. distributive cooperative integrative comparative competitive

integrative

Negotiation ________ are the desires, concerns, aims, or goals of a negotiating party in a negotiation process. agendas outcomes interests positions options

interests

To ensure that he is using his time efficiently, George numerically ranks all of his prospective customers based on their likelihood to purchase. George is using price optimization. lead scoring. artificial intelligence. performance management. predictive analytics.

lead scoring.

Gaining a better understanding of a customer's available negotiation ________ can help the salesperson optimize value for their firm while achieving a satisfactory outcome for the buyer. agendas positions interests options alternative

options

Inexperienced salespeople too often take initial negotiation ________ offered by the other side at face value and don't probe with questions or challenge sufficiently. positions excuses claims offers options

positions

Valentina has had a long and successful career in sales. She began her career immediately upon graduating from college. Over the years, she has been promoted three times, and this week she got the phone call she has long awaited: The CEO has offered her the company's top sales job. Which job is likely being offered to Valentina? regional sales manager director of sales chief executive officer vice president of sales senior sales representative

vice president of sales

Suppose Roberto, a sales rep, is in charge of negotiating a sales contract with his customers. He sells sewing machines to factories that create men's, women's, and children's clothing. He has begun a negotiation with a large factory based in China. The factory's buying team wants Roberto to include two years of free maintenance on all of the machines they buy, but Roberto realizes that this request will lower the profitability of his deal. Suppose Roberto has a compromising negotiation style. How will he respond to the Chinese factory's request? "Absolutely, I'll be happy to give you free maintenance on all the new machines for a period of two years, at no extra cost." "Normally, because maintenance is so expensive, we write a separate maintenance contract. However, because this is so important to you, I will split the difference and provide you with one year of free maintenance if you sign a two-year maintenance agreement." "I'd rather not talk about maintenance at this point. Can we focus solely on the sale of the sewing machines?" "I hear that maintenance is an important issue for you, but can we discuss that topic after we've signed the sales contract for the sewing machines?" "These are the best possible sewing machines, and you're getting them at a good price. It would make more sense for you to contract with a maintenance company separately. That way, you'll get a better price on maintenance."

"Normally, because maintenance is so expensive, we write a separate maintenance contract. However, because this is so important to you, I will split the difference and provide you with one year of free maintenance if you sign a two-year maintenance agreement."

Justin is a sales rep for Cookware, Inc., which sells cast-iron cookware to professional and amateur chefs. Each month he receives the following compensation: (1) a foundational salary of $2,500; (2) a 10% commission on his sales for that month; (3) a bonus of $1,000 if his sales exceed $100,000. His sales this month total $82,000. On the 15th of the month, he receives a check for $1,500 as an advance against his monthly commission. What is the amount of Justin's recoverable draw? $1,500 $1,000 $8,200 $2,500 $1,000

$1,500

Christianna is the chief accountant at Masdrex Pharmaceuticals, which developed and manufactures ImmunoA, an expensive but effective treatment for cancer. ImmunoA is Masdrex's only product. Each month Masdrex incurs certain costs that do not change, including $12,000,000 for salaries, $800,000 for maintenance of its laboratories, and $116,000 for ongoing office expenses such as insurance and utilities. It costs Masdrex $2 to manufacture each ImmunoA pill, and in October, Masdrex manufactured 400,000 pills. The company's manager has set 100% markup for each pill. In October, Masdrex incurred ________ in fixed costs and ________ in variable costs. Customers pay ________ for each ImmunoA pill. $116,000; $12,000,000; $2 $800,000; $12,916,000; $8 $12,916,000; $800,000; $4 $916,000; $400,000; $2 $12,000,000; $600,000; $3

$12,916,000; $800,000; $4

Theodore works for Floribunda, a biotechnology firm that creates new, hybridized forms of hardy exotic plants that can live in many climate conditions. The company's scientists have developed a new hybrid of the Bird of Paradise plant, a colorful flower that until recently could thrive only in very hot climates. The firm's trademarked Phoenix of Paradise® plant looks just like a Bird of Paradise, but it will grow and thrive all over the United States. However, it is quite expensive; consumers pay $300 for each plant. In April, just as people are starting to plant their summer gardens, Theodore sells 1,000 Phoenix of Paradise plants. His sales manager notes that Floribunda's cost of producing those plants was $100 per plant. What is the gross margin on Theodore's April sales? $300,000 $400,000 $200,000 $150,000 $100,000

$200,000

Maya is a salesperson for Chronex, Inc., which manufactures luxury men's watches. The Chronex Corporation tracks each salesperson's monthly contribution to the company's profit. In December—a very good month due to the holidays—Maya sold 86 watches at a price of $6,500 each. Chronex identifies the costs involved with manufacturing and selling each watch at $3,800. What is the total profit on Maya's December sales? $275,800 $232,200 $559,000 $326,800 $413,000

$232,200

If it cost a company $20 to produce a product, and the desired % return on the item is 25%, what is the markup price? $30 $25 $35 $27.50 $22.50

$25

While videoconferencing is perceived as a "rich" medium for online negotiation, there remains some limitations. Which of the following are not a limitation? privacy challenges technological difficulties All of these answers are correct. security challenges limited visibility

All of these answers are correct

________ is calculated as the number of units sold multiplied by the price charged to customers. Price Value Revenue Margin Profit

Revenue

With respect to ethical negotiations, the term ________ is used to describe a situation in which a negotiator who shares all of their exact requirements and limits will never achieve an outcome better than their walk-away point. dilemma of honesty circle of trust misrepresentation by omission dilemma of misrepresentation dilemma of trust

dilemma of trust

With respect to ethical negotiations, the term ________ is used to describe as a situation in which a negotiator who believes everything the other party says can be manipulated by dishonesty. prisoner's dilemma misrepresentation by commission dilemma of honesty misrepresentation by omission dilemma of trust

dilemma of trust

In a(n) ________ negotiation, parties often engage in competitive behavior directed at maximizing their share of the outcomes. integrative competitive cooperative comparative distributive

distributive

In a(n) ________ negotiation, potential outcomes of the bargaining effort are seen as a "fixed pie." cooperative comparative distributive competitive integrative

distributive

One-off encounters in which neither party is seeking to establish a lasting relationship are more likely to produce ________ negotiations. cooperative competitive integrative distributive comparative

distributive

Greg serves as a sales manager and is attempting to get his salespeople to focus on profitability sales. In order to do this, which type of commission structure should Greg implement? relative commission plan straight-line commission plan gross margin commission plan None of these would be effective. absolute commission plan

gross margin commission plan

One strategy for generating alternative negotiation solutions is known as ________, which involves the parties identifying two or more issues in conflict and then trading off among those issues. cross-cutting rolling the dough expanding the pie pie eating logrolling

logrolling

With respect to negotiation ethics, the term ________ is used to describe a situation in which a negotiator fails to disclose all information that would benefit the other party. misrepresentation by commission white lie misrepresentation by omission withholding strategic nondisclosure

misrepresentation by omission

Gross margin is calculated as net sales revenues minus costs of goods sold net sales revenues minus fixed costs. operating revenues minus costs of goods sold. recurring revenues minus costs of goods sold. net sales revenues minus variable costs.

net sales revenues minus costs of goods sold

Mercury Tires is a China-based manufacturer of automobile and truck tires. Due to lower labor and materials costs in China, Mercury is able to produce an automobile tire for $22, compared to a manufacturing cost in the United States of $38. Mercury decides to use its cost advantage to take over the U.S. market and drive its competitors out of business. It sells its tires in the United States for $52 each, compared to a minimum of $75 charged by each of the U.S. tire manufacturers. Not surprisingly, U.S. consumers flock to Mercury Tires and stop buying U.S.-produced tires, with the result that the U.S. manufacturers go bankrupt. With the competition eliminated, Mercury raises the price of a tire to $88. In which type of unethical pricing has Mercury Tires engaged? deceptive pricing nonprofit pricing predatory pricing price discrimination price fixing

predatory pricing

_____ is the amount of something—money, time, or effort—that a buyer exchanges with a seller to obtain a product. Value Margin Revenue Profit Price

price

The Robinson-Patman Act was passed to prevent price fixing. price discrimination. price skimming. predatory pricing. deceptive pricing.

price discrimination.

The primary decision-making authority in a negotiation is known as the negotiation agenda. interest. principal. position. agent.

principal

According to the text, negotiation involves three basic elements: substance, ________, and communication styles. options process interests agendas positions

process

Margot is negotiating a complicated contract in which her company provides lumber and other construction materials to a construction company. The company has specified that it wants only oak trees that are at least ten years old. She mentions this requirement to her sales manager, who says, "Some of the trees will be only eight or nine years old, but there's no way anyone can tell the difference between a nine-year-old tree and a ten-year-old tree, so we'll be fine." As Margot thinks about the upcoming contract negotiations, she puts herself in the position of her customer, asking herself, "Would I want someone to treat me this way—to promise me something and then sneakily deliver something else?" Which principle is she using to think about the boundaries between right and wrong at the negotiation table? reciprocity legacy trusted friend universality publicity

reciprocity

With a ________ compensation structure, organizations decide ahead of time how much they will pay their salespeople. commission plus bonus salary-only base salary plus bonus commission-only base salary plus commission

salary-only

The value of what a seller gives up (in time and money) in pursuing a particular sale is referred to as fixed costs. seller's opportunity costs. margin. profitology. variable costs.

seller's opportunity costs.

Sales commissions are an example of a(n) ________ cost. variable sunk incremental opportunity fixed

variable