CMC Pricing Strategy & Revenue Management Flashcards
6 cards from real CMC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CMC Pricing Strategy & Revenue Management flashcards as text
Value-based pricing sets prices primarily based on:
Answer: The perceived value to the customer
Value-based pricing determines price according to how much customers perceive the product is worth to them, independent of cost or competitor prices.
Which pricing strategy involves setting a high initial price and gradually lowering it over time?
Answer: Price skimming
Price skimming sets a high initial price to capture maximum revenue from early adopters, then lowers the price to attract more price-sensitive customers.
Penetration pricing is most appropriate when a company wants to:
Answer: Quickly gain market share in a competitive market
Penetration pricing uses a low initial price to rapidly attract customers and gain market share, particularly effective in highly competitive markets.
Price elasticity of demand measures:
Answer: How sensitive consumer demand is to a price change
Price elasticity of demand quantifies how much the quantity demanded changes in response to a price change, indicating consumer sensitivity to price.
Cost-plus pricing calculates price by:
Answer: Adding a standard markup to the total cost of production
Cost-plus pricing adds a predetermined profit margin to the total production cost to arrive at the final selling price.
Which pricing tactic uses prices ending in .99 to make products appear less expensive?
Answer: Psychological pricing
Psychological pricing uses price points like $9.99 instead of $10.00 to create the perception of a lower price and encourage purchase decisions.