CPM Value-Based Pricing & Customer Segmentation Flashcards
6 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
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What is the primary foundation of value-based pricing?
Answer: Customer's willingness to pay
Value-based pricing anchors price to the economic value customers derive, not internal costs.
Which tool is most commonly used to quantify customer value in B2C markets?
Answer: Conjoint analysis
Conjoint analysis decomposes customer preferences to measure the monetary value placed on each product attribute.
A price fence in customer segmentation is designed to:
Answer: Prevent customers from moving between price tiers
Price fences use eligibility criteria (e.g., student ID, geography) to keep segments from arbitraging lower price tiers.
Which segmentation variable typically best predicts willingness to pay in B2B markets?
Answer: Customer size and revenue impact of the product
In B2B, the economic impact your product has on the customer's revenue or cost structure strongly predicts willingness to pay.
The Economic Value Estimation (EVE) framework starts by identifying the:
Answer: Reference value of the next best competitive alternative
EVE anchors the analysis to the next best alternative (NBA) and then adds or subtracts differentiation value.
Versioning a software product into Basic, Pro, and Enterprise tiers is primarily a strategy to:
Answer: Capture consumer surplus across segments with different willingness to pay
Tiered versioning lets a firm offer the same core product at prices calibrated to each segment's value perception.