CPP Customer Segmentation Techniques 4

Question 1

Which of the following best describes 'psychographic segmentation' in the context of pricing strategy?

Accepted Answer

Grouping customers by values, attitudes, and lifestyle preferences

Answer

Psychographic segmentation divides customers based on internal characteristics like values, attitudes, interests, and lifestyle, which can reveal distinct willingness-to-pay profiles.

Question 2

A pricing manager notices that a segment initially identified as price-sensitive has low switching costs. What pricing implication does this have?

Accepted Answer

Price reductions will likely trigger high volume gains

Answer

Low switching costs combined with price sensitivity means this segment has high price elasticity, so price reductions can generate significant volume increases.

Question 3

What is the primary purpose of conjoint analysis in customer segmentation for pricing?

Accepted Answer

To estimate how customers trade off product attributes including price

Answer

Conjoint analysis determines how customers value different product attributes and their relative trade-offs, revealing willingness to pay for specific features across segments.

Question 4

In a B2B context, which customer segmentation variable is MOST aligned with identifying willingness to pay for a pricing analysis?

Accepted Answer

Economic value delivered to the customer's business

Answer

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.

Question 5

Which of the following is a key criterion for an effective and actionable market segment?

Accepted Answer

The segment must be measurable, accessible, substantial, and differentiable

Answer

Effective segments must be measurable (quantifiable), accessible (reachable), substantial (large enough to be profitable), and differentiable (respond differently to marketing/pricing).

(CPP) Certified Pricing Professional Practice Test

(CPP) Certified Pricing Professional Practice Test

CPP Customer Segmentation Techniques 4