CMC CMC Pricing Strategy & Revenue Management 1

Question 1

Value-based pricing sets prices primarily based on:

Accepted Answer

The perceived value to the customer

Answer

Value-based pricing determines price according to how much customers perceive the product is worth to them, independent of cost or competitor prices.

Question 2

Which pricing strategy involves setting a high initial price and gradually lowering it over time?

Accepted Answer

Price skimming

Answer

Price skimming sets a high initial price to capture maximum revenue from early adopters, then lowers the price to attract more price-sensitive customers.

Question 3

Penetration pricing is most appropriate when a company wants to:

Accepted Answer

Quickly gain market share in a competitive market

Answer

Penetration pricing uses a low initial price to rapidly attract customers and gain market share, particularly effective in highly competitive markets.

Question 4

Price elasticity of demand measures:

Accepted Answer

How sensitive consumer demand is to a price change

Answer

Price elasticity of demand quantifies how much the quantity demanded changes in response to a price change, indicating consumer sensitivity to price.

Question 5

Cost-plus pricing calculates price by:

Accepted Answer

Adding a standard markup to the total cost of production

Answer

Cost-plus pricing adds a predetermined profit margin to the total production cost to arrive at the final selling price.

CMC - Certified Marketing Consultants Practice Test

CMC - Certified Marketing Consultants Practice Test

CMC CMC Pricing Strategy & Revenue Management 1