Brenda is a buyer for Power's Books, an independent bookstore chain that operates 9 locations. Power's Books has been in operation for 8 years and is consistently recognized for its customer service, atmosphere, product assortment, and staff recommendations. Power prides itself on continued sales growth when most bookstores are losing business to electronic books and online bookstores. Power's Books has seen an increase in sales every year since its opening. Recently, a publisher convinced Brenda to purchase a large quantity of a mystery novel, although Brenda was not sold on the book. Now, Brenda is stuck with excess inventory and the store managers are complaining. Brenda has to prepare to negotiate with the publisher about returning the excess inventory.

When buying merchandise, buyers meet with vendors to negotiate many issues such as prices, delivery dates, payment terms, and financial support for advertising and markdowns. Although buyers meet and negotiate with vendors each season concerning new merchandise, there is a trend toward developing long-term strategic relationships with key suppliers. These partnerships enable the collaboration needed to develop efficient supply chains as well as joint merchandise and marketing programs.

Read the case below and answer the questions that follow.

Brenda is a buyer for Power's Books, an independent bookstore that operates stores at 9 locations. Power's Books has been in operation for 8 years and is consistently recognized for its customer service, atmosphere, product assortment, and staff recommendations. Power's prides itself on continued sales growth when most book stores are losing business to electronic books. Power's Books has seen an increase in sales every year since its opening. The founder, Michael Power, believes that the store is successful not just because of its customer service and environment, but also because of the buyers' uncanny abilities to predict which books are going to resonate well with Power's customers.

Brenda is one of the top buyers for Power's, buying primarily contemporary fiction. She always reaches her quarterly sales and gross margin goals. Brenda believes that she is successful at her job because of her great relationship with her vendors and the marketing research she does to stay updated with her customers' changing tastes. She also tries to work collaboratively with her vendors to help develop cooperative programs to promote books and authors. In the past year, Brenda has worked closely with vendors to host 48 different book signings across Power's 9 locations, solely for contemporary fiction authors.

Brenda prides herself on her close relationship with her vendors. However, she is beginning to wonder if she let one of her vendors become too close and thus take advantage of her relationship with them. Bill works for BLE publishing house, one of the top publishers for contemporary fiction in the industry. Last month, Bill convinced Brenda to order 1,500 units of a mystery novel, "And Then There Were Ten" by a contemporary author. This novel is the 10th in a series of mystery novels using the same character, James Stone. Brenda was wary because she knows that her customers prefer more innovative books and she thought the novelty of this particular mystery series had worn off. However, Bill told her that the market research indicates that customers take comfort in buying something that they are familiar with. Bill also told Brenda that with summer starting, customers would be looking for a "beach read" and would want something that did not require a lot of thought.

Now, a month later, Power's has sold less than 10% of the books. Inventory turnover for contemporary fiction is usually much faster than that. Store managers are complaining because "Ten" (as they referred to it) was taking up too much space in their storage room and they needed to get it out.

Brenda and Bill have worked together for quite some time. Brenda just heard through the grapevine though that Bill was having some personal problems and was in need of some cash. Brenda wondered if he pushed this book on her to earn a higher commission. Brenda had to confront Bill or her boss was going to reprimand her for purchasing so many units of the book.

Brenda decided to prepare for her conversation with Bill before actually calling. She also wanted to give herself some time to calm down because she was feeling angry with Bill. After working with Bill for so long, she knew that a collaborative attitude would fare better than a combative attitude. She outlined exactly what she wanted to accomplish from the conversation. Brenda decided that she would develop several strategies. She knew exactly the outcome that she wanted, but developed a few alternatives to compromise.

1) Take back all of the remaining 1,350 units of the book to make room for another novel. BLE Publishing will absorb all of the costs associated with the return. Brenda, in turn, will do her best to allocate the order money received from the return to another edition of other novels from BLE Publishing.

2) Suggest that Bill take back half of the books and absorb the cost of the return. With the remaining half of the books, Brenda wanted Bill to guarantee a gross margin percentage of 20% and allow Power's to sell the books at a discounted rate. Brenda wanted to ensure that Bill would match the costs associated with the markdown.

3) Should Bill not agree to take back any of the excess copies of "And Then There Were Ten," Brenda will demand co-op advertising money to promote the book. She will also insist that the publisher sponsor book signings with the author in 4 of Power's Books locations. She believes that this will strongly increase the sell-through should Power's get stuck with the books.

After reviewing all of her options, Brenda feels that she has developed a strong strategy for negotiating with Bill. She is going to adamantly push for the first option, but she feels comfortable with the second and third options.

She took a deep breath, picked up the phone, and called Bill.

1. Brenda is disappointed in the low ________________ of the book, "And Then There Were Ten."

• turnover
• promotions
• price
• target

Historically, Bill and Brenda have a _____________________ working relationship.

• collaborative
• corporate
• combative
• contemporary

• convivial

If Bill refuses to take back the excess inventory, Brenda is prepared to ask for __________________ so that Power's can reduce the price of the book without damaging its overall gross margin.

• co-operative markdowns
• transportation
• markdown money
• exchange rates
• future discounts

If Bill refused to take back the books or provide markdown money, Brenda was prepared to ask for some __________________ money to help promote the book.

• co-op objectives
• co-op advertising
• co-op development
• promotional materials
• seed