PCM Customer Insights & Segmentation 2 — Questions and Answers
Question 1: A brand manager wants to understand WHY customers choose competitors despite similar pricing. Which research method is most appropriate?
- Telephone survey with Likert scales
- In-depth qualitative interviews (Correct answer)
- Transactional data mining
- Observational store audits
Correct answer: In-depth qualitative interviews
In-depth qualitative interviews uncover motivations, perceptions, and emotional drivers that quantitative methods cannot capture.
Question 2: Which segmentation variable would BEST differentiate buyers of luxury organic food from regular organic food buyers?
- Geographic region
- Age demographic
- Psychographic values and lifestyle (Correct answer)
- Purchase frequency
Correct answer: Psychographic values and lifestyle
Psychographic segmentation captures values, attitudes, and lifestyle differences that explain the premium willingness-to-pay in luxury organic purchasing.
Question 3: 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:
- A high-value loyalist
- A frequent low-spend buyer (Correct answer)
- A one-time big spender
- An at-risk churner
Correct 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.
Question 4: When a firm uses census data combined with consumer purchase records to assign segment profiles to geographic areas, it is using:
- Conjoint analysis
- Geodemographic segmentation (Correct answer)
- Benefit segmentation
- Cluster analysis
Correct answer: Geodemographic segmentation
Geodemographic segmentation links demographic census data with behavioral purchase data to profile small geographic areas like zip codes.
Question 5: Which condition MOST threatens the validity of a customer segmentation study?
- Using a stratified random sample
- Having segments that overlap significantly (Correct answer)
- Conducting online versus in-person surveys
- Using a sample of 500 respondents
Correct answer: Having segments that overlap significantly
Overlapping segments violate the mutually exclusive requirement, making it impossible to assign customers clearly and target them distinctly.
Question 6: A marketer notices that a customer segment identified last year no longer responds to the same messaging. This MOST likely indicates:
- The segment was incorrectly identified
- Segment migration due to changing needs or life stage (Correct answer)
- A sampling error in the original study
- Media saturation causing ad blindness
Correct 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.
Question 7: In conjoint analysis used for segmentation, respondents evaluate:
- One product attribute at a time in isolation
- Combinations of product attributes simultaneously (Correct answer)
- Competitor brands head-to-head
- Price sensitivity thresholds only
Correct 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.
PCM Customer Insights & Segmentation 2
A brand manager wants to understand WHY customers choose competitors despite similar pricing.
Which research method is most appropriate?