Practice Test Geeks(CPP) Certified Pricing Professional Practice Test
← All CPP Flashcard Decks

Pricing Strategy & Market Analysis Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Pricing Strategy & Market Analysis flashcards as text

  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?

    Answer: Tiered pricing

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

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

    Answer: Set prices to build market share and trial quickly

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

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

    Answer: BCG Growth-Share Matrix

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

  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:

    Answer: Inelastic demand driven by strong brand loyalty

    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.

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

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

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

  6. Which of the following best describes 'price architecture'?

    Answer: The structured set of prices, tiers, and options across a product portfolio

    Price architecture defines how a company organizes its prices across product lines, tiers, and options to guide customers toward the desired purchase behavior.

  7. A company sells a product for $100 with a variable cost of $60. If it wants to achieve a 30% contribution margin ratio, what price should it charge (assuming the same variable cost)?

    Answer: $86

    Contribution margin ratio = (Price - Variable Cost) / Price; solving $60 = Price × (1 - 0.30) gives Price = $60 / 0.70 ≈ $85.71, closest to $86.