CIPS L3M3 Exam - Topic 1 Question 40 Discussion

Actual exam question for CIPS's L3M3 exam

Question #: 40
Topic #: 1

[All L3M3 Questions]

According to Lysons and Farrington, two authors recommended by CIPS, which of the following are cost-based pricing models, as opposed to market-driven pricing models? Choose two.

APenetration pricing

BPromotional pricing

CMarginal pricing

DRate of return pricing

Show Suggested Answer

Suggested Answer: C, D

Both penetration pricing and promotional pricing begin with the market price. Marginal pricing and rate of return pricing both look at the costs of doing something, and base their calculations on cost. These last two are therefore cost-based approaches to pricing.

by Jannette at Oct 29, 2025, 08:19 AM

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Casie

15 hours ago

Yup, those two are definitely cost-based!

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Justine

6 days ago

Wait, are we sure about that?

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Whitney

11 days ago

I thought penetration pricing was cost-based too?

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Micaela

16 days ago

Totally agree with that!

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Juan

21 days ago

C and D, easy peasy. Gotta love those cost-based models!

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Haydee

26 days ago

C and D, no doubt. Penetration and promotional pricing are more market-driven.

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Shawnda

1 month ago

Hmm, I'm going with C and D. Lysons and Farrington know their stuff!

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Aliza

1 month ago

Marginal pricing and rate of return pricing, definitely.

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Alesia

1 month ago

C and D seem like the correct cost-based pricing models.

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Emilio

2 months ago

I feel like promotional pricing might also be market-driven, but I can't recall the specifics of the definitions.

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Maurine

2 months ago

I practiced a similar question where we had to identify pricing strategies, and I think penetration pricing is more market-driven, right?

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Rima

2 months ago

I remember rate of return pricing being discussed as a cost-based model, but I’m a bit confused about how it compares to market-driven models.

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Cecilia

2 months ago

I think it's C and D. Cost-based models focus on expenses.

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Kris

2 months ago

C) Marginal pricing and D) Rate of return pricing are cost-based.

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Renay

3 months ago

Haha, I bet the exam writers are trying to trick us with those other options. C and D for the win!

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Leonida

3 months ago

I think marginal pricing is definitely one of the cost-based models, but I'm not sure about the second one.

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Regenia

3 months ago

Hmm, I'm a little unsure about this one. I remember the concepts, but I want to make sure I apply them correctly. I'll review the key characteristics of each pricing model before the exam.

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Jaime

4 months ago

I'm confident I know the difference between these pricing models. Penetration pricing and rate of return pricing are definitely cost-based, so those are my two answers.

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Jennie

4 months ago

This question seems straightforward, but I want to make sure I understand the difference between cost-based and market-driven pricing. I'll focus on that in my review before the exam.

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Freeman

4 months ago

Okay, I think I've got this. Penetration pricing and rate of return pricing are cost-based, while promotional pricing and marginal pricing are market-driven. Let me double-check that.

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Donette

4 months ago

Hmm, I remember Lysons and Farrington discussing pricing models, but I'm a bit fuzzy on the details. I'll need to review my notes carefully.

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Chantell

2 months ago

I think marginal pricing is one of them.

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Laine

3 months ago

Promotional pricing sounds like a short-term strategy.

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