Merchandising and Pricing Strategy Flashcards

What is the purpose of a 'price match' policy at the customer service level?

Answer: To retain customers by honoring qualifying lower competitor prices

Price matching keeps price-sensitive customers loyal by meeting competitor offers.

Why are 'feature' or 'hot spot' displays rotated frequently in stores?

Answer: To keep the shopping experience fresh and highlight new deals

Rotating featured displays maintains shopper interest and promotes current offers.

What does effective inventory 'turnover' indicate about merchandising performance?

Answer: Products are selling and being replenished efficiently

High turnover means stock sells quickly and is restocked, signaling healthy demand.

When setting prices, why does a retailer consider 'price points' like $0.99 endings?

Answer: Charm pricing makes prices feel lower and more attractive

Prices ending in .99 use psychological 'charm pricing' to seem cheaper.

What is the main merchandising reason for a 'store reset'?

Answer: To update layouts and product assortment based on sales data and seasons

Resets realign shelf space and assortment with current demand and performance.

How does bundling (e.g., 'buy 2 for $5') benefit pricing strategy?

Answer: It increases average units sold per transaction

Bundle deals encourage shoppers to buy more units, lifting basket size.

Why is accurate shelf labeling important beyond just pricing?

Answer: It informs customers of unit cost, helping them compare value

Shelf labels often show unit pricing so customers can compare value across sizes.