CPP Price Negotiation & Deal Management

Question 1

What does BATNA stand for in price negotiation?

Accepted Answer

Best Alternative to a Negotiated Agreement

Answer

BATNA (Best Alternative to a Negotiated Agreement) defines a negotiator's fallback position and establishes the minimum acceptable outcome before walking away.

Question 2

Which negotiation tactic involves stating an extreme initial price in order to influence the final negotiated outcome?

Accepted Answer

Anchoring

Answer

Anchoring sets a high or low initial reference point that exerts disproportionate influence over the final negotiated price.

Question 3

What is the 'zone of possible agreement' (ZOPA) in a negotiation?

Accepted Answer

The overlap between the seller's minimum acceptable price and the buyer's maximum acceptable price

Answer

ZOPA is the range between the seller's reservation price and the buyer's reservation price, representing the space where a mutually acceptable deal is possible.

Question 4

In deal management, 'price leakage' refers to:

Accepted Answer

Revenue lost through unauthorized discounts, exceptions, and off-invoice costs

Answer

Price leakage describes the gap between the quoted or list price and the actual revenue received after all discounts, allowances, and off-invoice deductions.

Question 5

What is a 'walk-away price' in a negotiation?

Accepted Answer

The threshold price beyond which a party will not finalize a deal

Answer

The walk-away price is the point at which a negotiator concludes that no deal is preferable to the proposed terms, serving as their absolute limit.

(CPP) Certified Pricing Professional Practice Test

(CPP) Certified Pricing Professional Practice Test

CPP Price Negotiation & Deal Management