PCM PCM Pricing Strategy & Management

Question 1

What pricing strategy involves setting a high initial price and gradually lowering it as competition increases?

Accepted Answer

Price skimming

Answer

Penetration pricing

Answer

Value-based pricing

Answer

Cost-plus pricing

Question 2

A company launches a new product at a very low price to quickly gain market share. This is called:

Accepted Answer

Penetration pricing

Answer

Psychological pricing

Answer

Price skimming

Answer

Prestige pricing

Question 3

Price elasticity of demand measures:

Accepted Answer

How sensitive customer demand is to price changes

Answer

How production costs change with volume

Answer

The relationship between advertising spend and sales

Answer

The gap between cost and selling price

Question 4

Which pricing approach sets price primarily based on the perceived value a product delivers to customers?

Accepted Answer

Value-based pricing

Answer

Cost-plus pricing

Answer

Competitor-based pricing

Answer

Break-even pricing

Question 5

A 'loss leader' pricing strategy involves:

Accepted Answer

Selling a product below cost to draw customers who then buy profitable items

Answer

Pricing above competitors to signal quality

Answer

Offering discounts only to loyal customers

Answer

Setting the lowest price in the entire market

Question 6

MSRP stands for:

Accepted Answer

Manufacturer's Suggested Retail Price

Answer

Market Standard Retail Protocol

Answer

Minimum Stated Resale Price

Answer

Managed Sales Revenue Plan