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 product life cycle describes the stages — introduction, growth, maturity, and decline — that a product passes through in the market.

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

An MVP is a product version with just enough features to attract early adopters, allowing the company to validate assumptions before full development.

Question 3

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

Accepted Answer

Price skimming

Answer

Price skimming sets a high launch price to capture maximum revenue from early adopters before gradually reducing the price.

Question 4

What is 'penetration pricing'?

Accepted Answer

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

Answer

Penetration pricing launches a product at a low price to attract customers quickly and build market share before gradually increasing prices.

Question 5

What is 'value-based pricing'?

Accepted Answer

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

Answer

Value-based pricing sets prices according to the perceived value of the product to the customer, not just the cost to produce it.

CMA - Certified Marketing Analyst Practice Test

CMA - Certified Marketing Analyst Practice Test

CMA Product Development & Pricing Strategy 1