Entrepreneurship Marketing and Customer Development 1 — Questions and Answers
Question 1: What is market segmentation?
- Dividing a target market into distinct subgroups with similar needs or characteristics (Correct answer)
- Setting different prices for the same product
- Splitting a company into multiple subsidiaries
- Assigning sales territories to representatives
Correct answer: Dividing a target market into distinct subgroups with similar needs or characteristics
Market segmentation divides a broad market into smaller groups of consumers with shared characteristics so businesses can tailor their marketing effectively.
Question 2: What does 'customer acquisition cost' (CAC) measure?
- The cost of manufacturing one unit of product
- The total cost of sales and marketing divided by the number of new customers acquired (Correct answer)
- The price a customer pays for a subscription
- The legal cost of acquiring a competitor
Correct answer: The total cost of sales and marketing divided by the number of new customers acquired
CAC is the average cost a business spends on sales and marketing to acquire each new customer.
Question 3: What is a 'customer persona'?
- A legal alias used for business registration
- A fictional representation of an ideal customer based on research and data (Correct answer)
- A social media profile for a brand
- A loyalty program tier name
Correct answer: A fictional representation of an ideal customer based on research and data
A customer persona (or buyer persona) is a semi-fictional profile representing your ideal customer, built from demographic data, behaviors, and motivations.
Question 4: What is the 'customer journey'?
- A loyalty reward program that tracks purchases
- The complete experience a customer has from first awareness through purchase and beyond (Correct answer)
- The delivery route used to ship products
- A training program for customer service staff
Correct answer: The complete experience a customer has from first awareness through purchase and beyond
The customer journey maps every touchpoint a customer has with a brand—from first awareness to purchase, use, and loyalty—to identify opportunities for improvement.
Question 5: What does 'brand positioning' mean?
- Where a business chooses to display its logo
- How a brand differentiates itself and occupies a distinct place in the minds of target customers (Correct answer)
- The physical location of a retail store
- The order in which products appear on a website
Correct answer: How a brand differentiates itself and occupies a distinct place in the minds of target customers
Brand positioning is the strategic process of defining how a brand should be perceived in relation to competitors in the minds of target customers.
Question 6: What is a unique selling proposition (USP)?
- A limited-time discount offered to new customers
- A clear statement of what makes a product or business different from and better than competitors (Correct answer)
- A legal claim filed to protect a product name
- An exclusive distribution contract with a retailer
Correct answer: A clear statement of what makes a product or business different from and better than competitors
A USP is the specific benefit that makes a business stand out from competitors and gives customers a compelling reason to choose it.
Entrepreneurship Marketing and Customer Development 1
What is market segmentation?