CMA Product Development & Pricing Strategy 1

Question 1

What does the 'product life cycle' (PLC) describe?

Accepted Answer

The stages a product goes through from launch to decline in the market

Answer

The manufacturing timeline of a product

Answer

The warranty period of a consumer product

Answer

The supply chain timeline from production to sale

Question 2

What is a 'minimum viable product' (MVP) in product development?

Accepted Answer

A version of a product with just enough features to satisfy early customers and gather feedback for future development

Answer

The cheapest product a company can produce

Answer

The product with the minimum number of defects

Answer

A product priced at the market minimum

Question 3

Which pricing strategy sets a high initial price for a new product and lowers it over time?

Accepted Answer

Price skimming

Answer

Penetration pricing

Answer

Economy pricing

Answer

Bundle pricing

Question 4

What is 'penetration pricing'?

Accepted Answer

Setting a low initial price to quickly gain market share, then raising the price

Answer

Setting a price above the market average

Answer

Matching the exact price of competitors

Answer

Setting prices based on product cost only

Question 5

What is 'value-based pricing'?

Accepted Answer

Setting prices based on the perceived value of the product to the customer

Answer

Setting prices based solely on the cost of production

Answer

Pricing products below competitors to win market share

Answer

Pricing based on industry average benchmarks

Question 6

Which of the following best describes 'product differentiation'?

Accepted Answer

Distinguishing a product from competitors' offerings through unique features, quality, or branding

Answer

Selling the same product in different countries

Answer

Producing multiple product variants at different price points

Answer

Lowering production costs to offer cheaper products