CMP Product Development and Management 2

Question 1

In the BCG Growth-Share Matrix, a product with high relative market share in a low-growth market is classified as a:

Accepted Answer

Cash Cow

Answer

Cash Cows hold high market share in slow-growth markets, generating more cash than they consume, which funds investment in other portfolio products.

Question 2

What is the primary purpose of concept testing in new product development?

Accepted Answer

To evaluate consumer reactions to a product idea before physical development begins

Answer

Concept testing gathers consumer feedback on product descriptions or visual representations before investing in costly physical prototypes or development.

Question 3

Which pricing strategy is commonly used when launching an innovative new product to quickly recover R&D costs by charging a high initial price?

Accepted Answer

Price skimming

Answer

Price skimming sets a high initial price to extract maximum value from early adopters willing to pay a premium, then gradually lowers the price to attract more price-sensitive segments.

Question 4

What does 'product mix width' (also called product breadth) refer to in portfolio management?

Accepted Answer

The number of different product lines a company offers

Answer

Product mix width refers to how many distinct product lines a company carries — the broader the mix, the more diverse its market coverage.

Question 5

During which new product development stage is the product first introduced to real customers in a limited geographic market to gauge genuine consumer response?

Accepted Answer

Test marketing

Answer

Test marketing launches the product in a limited, representative market to measure actual consumer behavior and refine the marketing plan before a full national rollout.

(CMP) Certified Marketing Professional Practice Test

(CMP) Certified Marketing Professional Practice Test

CMP Product Development and Management 2