CRA Retail Pricing Strategy & Optimization

Question 1

Which pricing strategy sets prices consistently low without frequent promotional discounts, aiming to build customer trust through price stability?

Accepted Answer

Everyday Low Price (EDLP)

Answer

High-Low Pricing

Answer

Skimming Pricing

Answer

Competitive Parity Pricing

Question 2

Price elasticity of demand measures which of the following?

Accepted Answer

The responsiveness of quantity demanded to a change in price

Answer

The markup percentage applied to cost of goods

Answer

The ratio of promotional price to everyday price

Answer

The competitor's price relative to your own

Question 3

Keystone pricing in retail refers to which of the following methods?

Accepted Answer

Marking up the wholesale cost by 100% to set retail price

Answer

Setting price equal to the competitor's lowest price

Answer

Using psychological pricing endings such as $0.99

Answer

Pricing products below cost to drive traffic

Question 4

A retailer sells a popular brand of coffee at below cost to attract shoppers into the store, expecting them to buy other full-margin items. This is an example of:

Accepted Answer

Loss leader pricing

Answer

Dynamic pricing

Answer

Price skimming

Answer

Zone pricing

Question 5

When a retailer sets prices based primarily on what competitors are charging for the same or similar products, this strategy is called:

Accepted Answer

Competitive pricing

Answer

Value-based pricing

Answer

Cost-plus pricing

Answer

Promotional pricing

Question 6

A retail analyst is reviewing planned markdowns for an apparel category. Which primary goal does a markdown optimization model pursue?

Accepted Answer

Clearing excess inventory while maximizing total revenue over the selling season

Answer

Maximizing the number of SKUs on promotion

Answer

Eliminating all products priced above the competition

Answer

Achieving the highest possible sell-through rate regardless of margin

Question 7

Price bundling is a strategy where a retailer:

Accepted Answer

Offers two or more products together at a combined price lower than buying each separately

Answer

Sets different prices for the same item in different store zones

Answer

Raises prices on complementary items when a key item goes on promotion

Answer

Applies a single margin percentage uniformly across all product categories