CIPS LEVEL 4 MODULE 5
COMMERCIAL NEGOTIATION
2026 EXPERT VERIFED ACE
THE TEST
Definitions of negotiation - ANSWER ✔✔- Negotiation is a process of
communication and interaction between two or more parties with the aim
of reaching a mutually acceptable agreement or resolving a conflict.
- Negotiation is a strategic dialogue between parties to reconcile their
differing interests, find common ground, and reach a mutually beneficial
outcome.
,- Negotiation is an art and science of achieving compromise and
consensus through discussion, bargaining, and give-and-take, with the
goal of reaching an agreement that satisfies all parties involved.
Negotiations throughout the cycle - Stage 1: Define business needs and
develop specification - ANSWER ✔✔Specification development - as
covered in L4M2, this stage offers great opportunities for value.
Procurement can achieve this by constructively challenging
specifications to come up with alternatives through negotiating with
stakeholders. This could involve avoiding the use of brand names in
specifications as this would limit competition.
Target/budget prices used in demand management could be the basis of
negotiations if they aren't aligned with procurement's market analysis
feedback.
Negotiations throughout the cycle - Stage 2: Market analysis and make-
or-buy decision - ANSWER ✔✔The market analysis conducted by
procurement also provides insights into the relative power between a
purchaser and a supplier. This is referred to as the balance of power that
can be used as leverage in a negotiation. The next lesson will cover the
balance of power in more detail.
,Negotiations throughout the cycle - Stage 3: Develop the strategy and
plan - ANSWER ✔✔The procurement method chosen could be to
negotiate with available suppliers. This will form part of the sourcing
strategy.
Preparation of the negotiation outcomes to support any negotiation is
important to determine the objectives to be achieved. Learning outcome
two will cover this in more detail.
Negotiations throughout the cycle - Stage 4: Pre-procurement market
test and engagement - ANSWER ✔✔At this stage, you can begin
supplier conditioning. Supplier conditioning is the process of influencing
suppliers to behave in a certain way, and accept certain circumstances
or information (© CIPS 2023).
It involves using various tactics and techniques to shape the supplier's
behaviour, expectations and willingness to make concessions or provide
favourable terms. It also involves 'conditioning' suppliers to focus on
specific considerations for the negotiation, such as highlighting the
importance of cost reductions, quality standards or sustainability.
For example, setting deadlines or creating a sense of urgency can
influence supplier behaviour. Time constraints may prompt suppliers to
be more open to negotiation or provide concessions to secure the deal.
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, Negotiations throughout the cycle - Stage 5: Develop documentation
PPQ and detailed specification - ANSWER ✔✔There's a limited
negotiation scope as this stage is mainly characterised by the
preparation of documentation that will be used to engage with the
market, for example, the invitation to tender, request for proposal or
request for quotation.
Negotiations throughout the cycle - Stage 6: Supplier Selection to
participate in tender - ANSWER ✔✔There's limited negotiation scope
here. Activities at this stage involve the pre-qualification of suppliers
which will be involved in the tendering or negotiation, depending on the
chosen procurement method.
Negotiations throughout the cycle - Stage 7: Issue tender documents -
ANSWER ✔✔There's limited negotiation scope here. Activities at this
stage involve tender administration functions to ensure the invitations
are sent out to the market and instructions to the bidders are clear. This
might include distributing tender advertisements and facilitating
clarification meetings.
Negotiations throughout the cycle - Stage 8: Bid and tender evaluation
and validation - ANSWER ✔✔Post-tender negotiation (PTN) -
Negotiation that occurs after the best value supplier has been chosen.
COMMERCIAL NEGOTIATION
2026 EXPERT VERIFED ACE
THE TEST
Definitions of negotiation - ANSWER ✔✔- Negotiation is a process of
communication and interaction between two or more parties with the aim
of reaching a mutually acceptable agreement or resolving a conflict.
- Negotiation is a strategic dialogue between parties to reconcile their
differing interests, find common ground, and reach a mutually beneficial
outcome.
,- Negotiation is an art and science of achieving compromise and
consensus through discussion, bargaining, and give-and-take, with the
goal of reaching an agreement that satisfies all parties involved.
Negotiations throughout the cycle - Stage 1: Define business needs and
develop specification - ANSWER ✔✔Specification development - as
covered in L4M2, this stage offers great opportunities for value.
Procurement can achieve this by constructively challenging
specifications to come up with alternatives through negotiating with
stakeholders. This could involve avoiding the use of brand names in
specifications as this would limit competition.
Target/budget prices used in demand management could be the basis of
negotiations if they aren't aligned with procurement's market analysis
feedback.
Negotiations throughout the cycle - Stage 2: Market analysis and make-
or-buy decision - ANSWER ✔✔The market analysis conducted by
procurement also provides insights into the relative power between a
purchaser and a supplier. This is referred to as the balance of power that
can be used as leverage in a negotiation. The next lesson will cover the
balance of power in more detail.
,Negotiations throughout the cycle - Stage 3: Develop the strategy and
plan - ANSWER ✔✔The procurement method chosen could be to
negotiate with available suppliers. This will form part of the sourcing
strategy.
Preparation of the negotiation outcomes to support any negotiation is
important to determine the objectives to be achieved. Learning outcome
two will cover this in more detail.
Negotiations throughout the cycle - Stage 4: Pre-procurement market
test and engagement - ANSWER ✔✔At this stage, you can begin
supplier conditioning. Supplier conditioning is the process of influencing
suppliers to behave in a certain way, and accept certain circumstances
or information (© CIPS 2023).
It involves using various tactics and techniques to shape the supplier's
behaviour, expectations and willingness to make concessions or provide
favourable terms. It also involves 'conditioning' suppliers to focus on
specific considerations for the negotiation, such as highlighting the
importance of cost reductions, quality standards or sustainability.
For example, setting deadlines or creating a sense of urgency can
influence supplier behaviour. Time constraints may prompt suppliers to
be more open to negotiation or provide concessions to secure the deal.
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, Negotiations throughout the cycle - Stage 5: Develop documentation
PPQ and detailed specification - ANSWER ✔✔There's a limited
negotiation scope as this stage is mainly characterised by the
preparation of documentation that will be used to engage with the
market, for example, the invitation to tender, request for proposal or
request for quotation.
Negotiations throughout the cycle - Stage 6: Supplier Selection to
participate in tender - ANSWER ✔✔There's limited negotiation scope
here. Activities at this stage involve the pre-qualification of suppliers
which will be involved in the tendering or negotiation, depending on the
chosen procurement method.
Negotiations throughout the cycle - Stage 7: Issue tender documents -
ANSWER ✔✔There's limited negotiation scope here. Activities at this
stage involve tender administration functions to ensure the invitations
are sent out to the market and instructions to the bidders are clear. This
might include distributing tender advertisements and facilitating
clarification meetings.
Negotiations throughout the cycle - Stage 8: Bid and tender evaluation
and validation - ANSWER ✔✔Post-tender negotiation (PTN) -
Negotiation that occurs after the best value supplier has been chosen.
