Customer Insights & Segmentation Flashcards

A brand manager wants to understand WHY customers choose competitors despite similar pricing. Which research method is most appropriate?

Answer: In-depth qualitative interviews

In-depth qualitative interviews uncover motivations, perceptions, and emotional drivers that quantitative methods cannot capture.

Which segmentation variable would BEST differentiate buyers of luxury organic food from regular organic food buyers?

Answer: Psychographic values and lifestyle

Psychographic segmentation captures values, attitudes, and lifestyle differences that explain the premium willingness-to-pay in luxury organic purchasing.

A company's RFM model scores customers on Recency, Frequency, and Monetary value. A customer scores high on Frequency but low on Monetary value. This customer is best described as:

Answer: A frequent low-spend buyer

High frequency combined with low monetary value indicates a loyal but low-spending customer who buys often but spends little per transaction.

When a firm uses census data combined with consumer purchase records to assign segment profiles to geographic areas, it is using:

Answer: Geodemographic segmentation

Geodemographic segmentation links demographic census data with behavioral purchase data to profile small geographic areas like zip codes.

Which condition MOST threatens the validity of a customer segmentation study?

Answer: Having segments that overlap significantly

Overlapping segments violate the mutually exclusive requirement, making it impossible to assign customers clearly and target them distinctly.

A marketer notices that a customer segment identified last year no longer responds to the same messaging. This MOST likely indicates:

Answer: Segment migration due to changing needs or life stage

Customer needs evolve over time due to life stage changes, and segments must be periodically re-evaluated to remain valid and actionable.

In conjoint analysis used for segmentation, respondents evaluate:

Answer: Combinations of product attributes simultaneously

Conjoint analysis presents respondents with product profiles containing multiple attributes simultaneously, revealing the relative importance and trade-offs they make.