Customer Segmentation Techniques Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Customer Segmentation Techniques flashcards as text
Which of the following best describes 'psychographic segmentation' in the context of pricing strategy?
Answer: Grouping customers by values, attitudes, and lifestyle preferences
Psychographic segmentation divides customers based on internal characteristics like values, attitudes, interests, and lifestyle, which can reveal distinct willingness-to-pay profiles.
A pricing manager notices that a segment initially identified as price-sensitive has low switching costs. What pricing implication does this have?
Answer: Price reductions will likely trigger high volume gains
Low switching costs combined with price sensitivity means this segment has high price elasticity, so price reductions can generate significant volume increases.
What is the primary purpose of conjoint analysis in customer segmentation for pricing?
Answer: To estimate how customers trade off product attributes including price
Conjoint analysis determines how customers value different product attributes and their relative trade-offs, revealing willingness to pay for specific features across segments.
In a B2B context, which customer segmentation variable is MOST aligned with identifying willingness to pay for a pricing analysis?
Answer: Economic value delivered to the customer's business
The economic value delivered—cost savings, revenue uplift, or risk reduction—directly determines a B2B customer's willingness to pay for a product or service.
Which of the following is a key criterion for an effective and actionable market segment?
Answer: The segment must be measurable, accessible, substantial, and differentiable
Effective segments must be measurable (quantifiable), accessible (reachable), substantial (large enough to be profitable), and differentiable (respond differently to marketing/pricing).
A company uses 'decile analysis' on its customer database. What does grouping customers into the top decile identify?
Answer: The 10% of customers generating the highest revenue or profit
Decile analysis ranks customers by value (revenue or profit) and the top decile represents the highest-value 10%, who often deserve differentiated pricing or retention investment.
Why is segment stability over time an important consideration when building a pricing segmentation model?
Answer: Customers who frequently move between segments are harder to target with consistent pricing
If customers frequently migrate between segments, it becomes difficult to maintain pricing fences and consistently apply the right price to the right customer.