CPP Pricing Strategy & Market Analysis 3

Question 1

A SaaS company charges $10/month for up to 5 users and $18/month for up to 15 users. This is an example of which pricing structure?

Accepted Answer

Tiered pricing

Answer

Tiered pricing offers distinct packages at different price points, each with expanded features or usage limits, targeting different customer segments.

Question 2

What is the primary goal of a 'market development' pricing strategy when entering a new geographic market?

Accepted Answer

Set prices to build market share and trial quickly

Answer

When entering new markets, lower penetration-oriented prices accelerate customer acquisition and establish a foothold before competitors respond.

Question 3

Which analysis technique plots a product's market share against market growth rate to inform pricing and investment decisions?

Accepted Answer

BCG Growth-Share Matrix

Answer

The BCG matrix classifies products as Stars, Cash Cows, Question Marks, or Dogs based on market share and growth, guiding portfolio pricing strategy.

Question 4

A pricing analyst observes that a competitor reduced prices by 15% but gained only 5% in market share. This suggests the market is experiencing:

Accepted Answer

Inelastic demand driven by strong brand loyalty

Answer

When large price cuts yield small share gains, it indicates buyers are not highly sensitive to price, often due to brand preference, switching costs, or habit.

Question 5

In B2B pricing, what is the 'economic value to the customer' (EVC) model primarily used for?

Accepted Answer

Quantifying the total financial benefit a customer gains versus the next best alternative

Answer

EVC measures the maximum price a rational buyer should pay by adding the value differential over the next best alternative to the reference price.

(CPP) Certified Pricing Professional Practice Test

(CPP) Certified Pricing Professional Practice Test

CPP Pricing Strategy & Market Analysis 3