CPM CPM Product Development & Pricing Strategy

Question 1

Which stage of the new product development process involves filtering out ideas that do not align with company objectives?

Accepted Answer

Idea screening

Answer

Idea screening evaluates generated ideas against strategic fit, feasibility, and resource requirements to eliminate unviable concepts early.

Question 2

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

Accepted Answer

Cash Cow

Answer

Cash Cows generate strong cash flow due to high market share but require little investment because market growth is low.

Question 3

Which pricing strategy sets an initial high price to capture early adopters before gradually lowering it?

Accepted Answer

Skimming pricing

Answer

Price skimming maximizes revenue from early adopters who are willing to pay a premium before targeting more price-sensitive segments.

Question 4

The concept of 'price elasticity of demand' measures:

Accepted Answer

How quantity demanded changes relative to a price change

Answer

Price elasticity of demand quantifies the percentage change in quantity demanded divided by the percentage change in price.

Question 5

A company launches a new product at a low price to quickly capture market share. This is called:

Accepted Answer

Penetration pricing

Answer

Penetration pricing uses a low initial price to attract a large customer base rapidly and discourage competitor entry.

(CPM) Certified Professional Marketer Practice Test