CPM Promotional Pricing & Discount Management 2

Question 1

A promotional allowance is best described as:

Accepted Answer

Compensation given to a reseller for promoting a product locally

Answer

A reduction in price for paying early

Answer

A discount tied to reaching a purchase volume threshold

Answer

A rebate issued at the end of the fiscal year

Question 2

Which of the following best describes 'price discrimination' in a legal and strategic pricing context?

Accepted Answer

Charging different customers different prices based on their cost-to-serve or value received

Answer

Reducing prices only for certain geographic markets

Answer

Setting artificially low prices to eliminate competitors

Answer

Offering a discount to all customers simultaneously

Question 3

A 'slotting allowance' is typically associated with:

Accepted Answer

Retail shelf space fees paid by manufacturers to retailers

Answer

Online advertising placements

Answer

Volume discounts offered to wholesalers

Answer

Licensing fees for technology integration

Question 4

A 'buy-one-get-one' (BOGO) promotion primarily impacts which pricing metric most directly?

Accepted Answer

Effective price per unit

Answer

List price

Answer

Invoice price

Answer

Transfer price

Question 5

Which of the following is a key risk of frequent promotional price reductions?

Accepted Answer

Customer price anchoring to the promotional price

Answer

Increased brand equity

Answer

Improved channel relationships

Answer

Higher contribution margins

Question 6

An 'everyday low price' (EDLP) strategy differs from a 'high-low' pricing strategy primarily because EDLP:

Accepted Answer

Eliminates promotional price swings in favor of consistently low stable prices

Answer

Always charges the highest price in the market

Answer

Requires more frequent price adjustments based on demand

Answer

Relies exclusively on manufacturer rebates

Question 7

When evaluating a promotional pricing event, the 'incremental volume' measure refers to:

Accepted Answer

Sales volume above the baseline that would have occurred without the promotion

Answer

Total sales during the promotional period

Answer

The discount percentage applied during the event

Answer

Volume transferred from other SKUs within the same brand