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Scenario 17

question 43

Multiple Choice

Scenario 17.2 Use the following to answer the questions.
The State Farm Group includes several companies. Probably the most well-known company in the group is the State Farm Insurance company, the largest auto and home insurer in the United States. State Farm Insurance provides protection for approximately 78 million policies on auto, fire, life, and health services. It is also a leading insurer of homes and autos in Canada. Another company in the State Farm group is the State Farm Bank, which was opened in 2000, beginning State Farm's entry into the financial services field. However, the State Farm Bank is not a traditional bank, in that it has no branch offices and its services are provided through State Farm agents, a call center, the mail, and on the Internet. It currently serves over 1.9 million bank accounts.
Refer to Scenario 17.2. When deciding on its advertising allocation for the coming year, State Farm Insurance could choose to spend the same amount as Safe Auto, another auto insurance company, or it could allocate an amount that is 10% of last year's premiums. If State Farm uses the same amount as Safe Auto, this method of advertising appropriation is known as the ____ approach; if State Farm uses the amount based on last year's premiums, the method would be _____.

Definitions:

Integrative Bargaining

A negotiation strategy that seeks to find win-win solutions that satisfy the interests of both parties involved.

Pie Bigger

A metaphorical expression indicating the expansion of the total market or increase in the overall size of an opportunity available to participants.

Negotiators

Individuals skilled in discussion and bargaining to reach agreements or resolve disputes between parties.

Statistical Displays

Visual representations of data, such as graphs or charts, used to simplify the presentation and interpretation of statistical information.