#1
In the context of retail pricing, what does the term 'EDLP' stand for?
Everyday Low Price
ExplanationMaintaining consistently low prices.
#2
What does the term 'MSRP' stand for in retail pricing?
Manufacturer's Suggested Retail Price
ExplanationRecommended price set by the manufacturer.
#3
Which pricing strategy involves setting prices based on the perceived value of the product to the customer?
Value-based pricing
ExplanationAligning price with customer's perceived worth.
#4
What is the concept of anchor pricing in retail?
Using a high-priced product to make other products seem more affordable
ExplanationPositioning high-priced items to influence perception.
#5
What is the key advantage of a dynamic pricing strategy in retail?
Adaptability to changing market conditions
ExplanationResponding promptly to market shifts.
#6
Which pricing strategy involves setting a high initial price to capitalize on early adopters and then gradually lowering the price over time?
Skimming pricing
ExplanationMaximizing profit from early adopters before lowering price.
#7
What is the primary objective of a loss leader pricing strategy?
Attracting customers to buy complementary products
ExplanationSelling a product at a loss to stimulate other sales.
#8
What is the main advantage of a bundling pricing strategy in retail?
Encouraging customers to buy multiple products
ExplanationIncreasing sales through package deals.
#9
Which of the following is a drawback of using cost-plus pricing in retail?
May not reflect customer perceived value
ExplanationIgnoring customer's valuation of the product.
#10
What is the primary goal of a psychological pricing strategy in retail?
Creating an illusion of higher quality
ExplanationShaping perception through price manipulation.
#11
What is dynamic pricing in retail?
Adjusting prices based on supply and demand
ExplanationFlexible pricing responding to market changes.
#12
Which pricing strategy involves intentionally pricing a product lower than its production cost to attract customers and stimulate other sales?
Loss leader pricing
ExplanationOffering products below cost to drive additional sales.
#13
What is the purpose of using a skimming pricing strategy?
Capitalizing on early adopters and high margins
ExplanationExploiting initial market demand for profit.
#14
In the context of retail, what is the concept of price elasticity of demand?
The responsiveness of quantity demanded to a change in price
ExplanationHow demand changes with price alterations.
#15
What is the key advantage of a value-based pricing strategy in retail?
Aligning prices with customer perceptions of value
ExplanationMatching price to perceived product value.