CPP Pricing Models & Tools 3

Question 1

Which pricing model is most aligned with a 'good-better-best' product line strategy?

Accepted Answer

Versioning / tiered pricing

Answer

Versioning or tiered pricing creates distinct product versions at different price points to serve multiple willingness-to-pay segments.

Question 2

A regression-based price response model estimates that for every 1% price increase, units sold decrease by 1.8%. What is the price elasticity?

Accepted Answer

-1.8

Answer

Price elasticity = % change in quantity / % change in price = -1.8% / 1% = -1.8.

Question 3

In the context of CPQ (Configure, Price, Quote) tools, what is the primary pricing benefit?

Accepted Answer

Ensuring pricing rules and approval workflows are enforced consistently at the point of sale

Answer

CPQ tools enforce pricing guardrails, discount approval workflows, and configuration logic at the quote stage.

Question 4

An airline's revenue management system raises fares as the departure date approaches and seats fill. This is an example of:

Accepted Answer

Yield management / dynamic pricing

Answer

Yield management dynamically adjusts prices based on remaining inventory and time to maximize revenue per available seat.

Question 5

Which metric does the 'Gabor-Granger' pricing technique directly produce?

Accepted Answer

A demand curve showing purchase intent at various price levels

Answer

Gabor-Granger surveys respondents at multiple price points to construct a demand curve of purchase intent vs. price.

(CPP) Certified Pricing Professional Practice Test