CRA Retail Pricing Strategy & Optimization 1

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

Everyday Low Price (EDLP) maintains consistently low prices to reduce consumer uncertainty and minimize promotional spending.

Question 2

Price elasticity of demand measures which of the following?

Accepted Answer

The responsiveness of quantity demanded to a change in price

Answer

Price elasticity of demand quantifies how much unit sales change in response to a percentage change in price.

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

Keystone pricing doubles the wholesale cost (100% markup), resulting in a 50% gross margin, which is a common retail baseline.

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

Loss leader pricing intentionally prices certain items below cost to drive store traffic and increase overall basket size.

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

Competitive pricing uses competitor price points as the primary reference to position prices in the market.

(CRA) Certified Retail Analyst Practice Test

(CRA) Certified Retail Analyst Practice Test

CRA Retail Pricing Strategy & Optimization 1