CPM Product Development & Pricing Strategy Flashcards
6 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPM Product Development & Pricing Strategy flashcards as text
Which of the following is a characteristic of 'psychological pricing'?
Answer: Setting prices like $9.99 to make items seem less expensive
Psychological pricing uses price points like $9.99 instead of $10.00 to create the perception of a lower price in consumers' minds.
In new product development, what is the purpose of a 'concept test'?
Answer: Gauging target consumers' reactions to a product idea before development
Concept testing presents the product idea to potential buyers to assess appeal, intent to purchase, and potential improvements before investing in development.
Which pricing strategy considers the total cost of ownership over a product's lifetime rather than just the purchase price?
Answer: Life cycle pricing
Life cycle pricing accounts for all costs (acquisition, operation, maintenance, disposal) that a customer incurs over the product's useful life.
A 'product mix' refers to:
Answer: All product lines and items a company offers for sale
A product mix (or product portfolio) encompasses all products and product lines a company markets to its customers.
What is 'competitive parity' in the context of pricing strategy?
Answer: Setting prices at roughly the same level as competitors in the industry
Competitive parity pricing involves matching the general price level of industry competitors to avoid price wars while staying competitive.
Which product development approach uses cross-functional teams working simultaneously rather than sequentially through development stages?
Answer: Simultaneous (concurrent) engineering
Simultaneous (concurrent) engineering overlaps development stages using cross-functional teams, reducing time-to-market compared to sequential processes.