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

Promotional allowances are payments or price reductions provided to channel members in exchange for featuring, displaying, or advertising the supplier's product.

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

Legal price discrimination involves charging different prices based on legitimate differences in cost-to-serve, competitive conditions, or value delivered to different customer segments.

Question 3

A 'slotting allowance' is typically associated with:

Accepted Answer

Retail shelf space fees paid by manufacturers to retailers

Answer

Slotting allowances are fees manufacturers pay to retailers for shelf space, placement, or inclusion in store assortments.

Question 4

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

Accepted Answer

Effective price per unit

Answer

A BOGO promotion halves the effective price per unit while keeping the list price unchanged, making the per-unit revenue impact the most direct pricing metric affected.

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

Repeated promotions can anchor customers' reference prices at the discounted level, making it difficult to sustain full prices and eroding perceived value.

CPM - Certified Pricing Manager Practice Test

CPM - Certified Pricing Manager Practice Test

CPM Promotional Pricing & Discount Management 2