CPM CPM Value-Based Pricing & Customer Segmentation

Question 1

What is the primary foundation of value-based pricing?

Accepted Answer

Customer's willingness to pay

Answer

Value-based pricing anchors price to the economic value customers derive, not internal costs.

Question 2

Which tool is most commonly used to quantify customer value in B2C markets?

Accepted Answer

Conjoint analysis

Answer

Conjoint analysis decomposes customer preferences to measure the monetary value placed on each product attribute.

Question 3

A price fence in customer segmentation is designed to:

Accepted Answer

Prevent customers from moving between price tiers

Answer

Price fences use eligibility criteria (e.g., student ID, geography) to keep segments from arbitraging lower price tiers.

Question 4

Which segmentation variable typically best predicts willingness to pay in B2B markets?

Accepted Answer

Customer size and revenue impact of the product

Answer

In B2B, the economic impact your product has on the customer's revenue or cost structure strongly predicts willingness to pay.

Question 5

The Economic Value Estimation (EVE) framework starts by identifying the:

Accepted Answer

Reference value of the next best competitive alternative

Answer

EVE anchors the analysis to the next best alternative (NBA) and then adds or subtracts differentiation value.

CPM - Certified Pricing Manager Practice Test