IPN Sample Quiz Question

IPN Sample Quiz Question

Sample Questions Part B (50 points); 4-5 questions:

1. Trade-In Value Kelley Blue Book Trade-In Value is the amount consumers can expect to receive from a dealer for a trade-in vehicle, assuming an accurate appraisal of the vehicle’s condition, mileage and features. This value will likely be less than the Private Party Value because the reselling dealer incurs the cost of safety inspections, reconditioning and other costs of doing business.

   You own a 2001 Ford Focus that has close to 100,000 miles. You think your car is in an excellent condition. You research Kelly’s Blue Book and discover the following:

BLUE BOOK^® TRADE-IN VALUE

Close

Trade-In Value

Kelley Blue Book Trade-In Value is the amount consumers can expect to receive from a dealer for a trade-in vehicle, assuming an accurate appraisal of the vehicle’s condition, mileage and features. This value will likely be less than the Private Party Value because the reselling dealer incurs the cost of safety inspections, reconditioning and other costs of doing business.

More Photos

BLUE BOOK^® SUGGESTED RETAIL VALUE

Close

Suggested Retail Value

Kelley Blue Book Suggested Retail Value is representative of dealers’ asking prices for a used car, and the starting point for negotiation between a consumer and a dealer. This Suggested Retail Value assumes that the vehicle has been fully reconditioned and has a clean title history, but has not been certified in accordance with any Certified Pre-Owned (CPO) program the automaker may offer (for which it may or may not qualify, according to factors such as vehicle age and mileage). This value also takes into account the dealers’ profit, costs for advertising, sales commissions and other costs of doing business. The final sale price will likely be less depending on the vehicle’s actual condition, popularity, type of warranty offered and local market conditions.

More Photos

Suggested Retail Value Assumes Excellent Condition More

BLUE BOOK^® PRIVATE PARTY VALUE

Close

Private Party Value

Kelley Blue Book Private Party Value is the amount a buyer can expect to pay when buying a used car from a private party. The Private Party Value assumes the vehicle is sold “As Is” and carries no warranty (other than any remaining factory warranty). The final sale price may vary depending on the vehicle’s actual condition and local market conditions. This value may also be used to derive Fair Market Value for insurance and vehicle donation purposes.

More Photos

Further, you also found that there were many similar cars for sale in or around the Wayne area:

For Sale Near Wayne

2001 Ford Focus

Total Listings Near Wayne:29

Below Blue
Book® Value*:7

1. Assume the role of the seller and arrive at the following:

1. Were you to advertise this car for sale, say in Craigslist, how much will you advertise it for? Why? (I don’t have a magic number that I want you to come up with; I am interested in knowing how you think, as students of Negotiation, when you come up with this price). (5 points)
2. What is your BATNA? Why? (5 points)
3. What is your ZOPA? Why? (5 points)
4. What is your reservation price? Name 2 factors that may influence this? (5 points)
5. What anchor will you want to open with? Why? (5 points)

1. In the BD Vaccutainer case discussions, what were the three elements of the bargaining mix? (7.5 points)

Mix1:

Mix2:

Mix3:

1. Choose one from the above and argue both for and against (e.g. no pvt. Label vs. agree to private label); give your rationale (10 points)

1. What do you think your negotiating style is? Explain what might have shaped it? (7.5 points)

***