CPM Promotional Pricing & Discount Management 3

Question 1

Which metric best measures the financial return on a promotional price investment?

Accepted Answer

Promotional return on investment (ROI), comparing incremental margin to promotional cost

Answer

Gross margin percentage

Answer

Net Promoter Score during the promotion

Answer

Average selling price during the event

Question 2

A 'price pack' promotion offers consumers:

Accepted Answer

Extra quantity of the product for the same price as the standard pack

Answer

A coupon for a future purchase

Answer

A rebate mailed after purchase

Answer

A loyalty points multiplier

Question 3

The concept of 'pull-forward demand' in promotional pricing means that:

Accepted Answer

Future demand is destroyed as customers stock up during promotions

Answer

Promotions attract new customers who would not have purchased otherwise

Answer

Prices are pulled down to match competitor levels

Answer

Demand is stimulated by increasing advertising spend

Question 4

In channel pricing, 'price maintenance' policies are designed to:

Accepted Answer

Ensure resellers do not sell below a specified minimum price

Answer

Keep all promotional discounts uniform across channels

Answer

Allow manufacturers to set final consumer prices unilaterally

Answer

Prevent price increases during contract periods

Question 5

Which of the following is NOT a typical objective of a promotional pricing strategy?

Accepted Answer

Maximizing long-term price premium for the brand

Answer

Accelerating trial by new customers

Answer

Liquidating excess inventory

Answer

Countering a competitive promotional event

Question 6

The Robinson-Patman Act most directly affects B2B pricing by prohibiting:

Accepted Answer

Selling the same product to competing buyers at different prices without cost justification

Answer

Advertising a product at a price different from its invoice price

Answer

Offering cash discounts to any customer without offering them to all

Answer

Setting prices above cost plus a reasonable margin

Question 7

A company tracks a 'discount leakage' problem when:

Accepted Answer

Discounts are granted beyond policy levels without corresponding business justification

Answer

Promotional prices are not communicated to the sales team in time

Answer

Seasonal discounts fail to attract off-peak demand

Answer

Cash discounts are taken by customers who pay late