CMA Product Development & Pricing Strategy 2

Question 1

What is 'price elasticity of demand'?

Accepted Answer

A measure of how sensitive consumer demand for a product is to changes in price

Answer

Price elasticity of demand measures how much the quantity demanded of a product changes in response to a change in its price.

Question 2

Which new product development stage involves creating a small-scale version of the product to test functionality?

Accepted Answer

Prototype development

Answer

Prototype development creates a working model of the product to test its functionality, design, and user experience before full production.

Question 3

What is 'cannibalization' in product portfolio management?

Accepted Answer

A new product in a company's portfolio reducing the sales of an existing product in the same portfolio

Answer

Cannibalization occurs when a company's new product takes sales away from its own existing product rather than gaining new customers.

Question 4

What is 'competitive pricing' strategy?

Accepted Answer

Pricing products based on what competitors are charging

Answer

Competitive pricing sets prices in relation to what competitors are charging, aiming to stay aligned with or slightly below the market rate.

Question 5

In the context of product development, what is 'concept testing'?

Accepted Answer

Testing a product idea with potential customers to evaluate appeal and viability before development

Answer

Concept testing presents a product idea to the target audience to assess interest, relevance, and likelihood of purchase before committing to development.

CMA - Certified Marketing Analyst Practice Test

CMA - Certified Marketing Analyst Practice Test

CMA Product Development & Pricing Strategy 2