Marketing Principles and Customer Value

What is the main goal of marketing?

Which perspective focuses on creating and improving products based on the company's expertise and vision?

Apple designs products without conducting extensive customer research.

What does the customer-centric perspective focus on?

What is a key example of a company that implements a customer-centric approach?

What does the marketing strategy formation process aim to develop?

Why is it crucial for businesses to capture value from customers?

Marketing strategy decisions and actions are focused on building a sustainable differential advantage, relative to competitors, in the perception of customers.

Marketing strategies are static and remain unchanged over time.

Why are marketing departments increasingly becoming more powerful over time?

Customer value creation is primarily focused on creating value for customers only, without considering the organization's needs.

What are two examples of products that are considered 'means to an end' in the context of customer value creation?

Which of the following are types of customer value?

Economic value of a product is determined solely by its purchase price.

What is the concept of 'willingness to pay' (WTP) in the context of economic value?

Different customers always derive the same value from the same product.

Which of the following is a customer decision-making rule that considers all available attributes and allows for trade-offs between them?

Which of the following is a customer decision-making rule that does not allow for trade-offs and rejects products with any low-scoring attributes, even if they excel in other areas?

Understanding and shaping customer decision-making rules is essential for creating a winning strategy.

Experiential value refers to the objective, tangible benefits a customer gets from using a product.

Experiential value often requires the customer to actively experience the product to grasp its true value.

Experiential value is typically easier to imitate for competitors compared to functional or economic value.

Social value refers to the benefits that a product provides to society or specific communities.

What is an example of a feature that Disney added to its streaming service that exemplifies social value?

Internal locus of value refers to the belief that product value comes from the product's ability to meet the individual's personal needs and desires.

External locus of value refers to the belief that product value comes from the benefits it provides in enabling the user to do things in their life.

Which of the following are key success metrics for customer value creation?

Customer satisfaction is a reliable measure for comparing customer value across different markets.

The Net Promoter Score is a standardized metric for measuring customer satisfaction and loyalty.

The Net Promoter Score, like customer satisfaction, is free from bias and always accurately reflects the true customer sentiment across different categories.

Customer value creation requires a holistic view, considering the diverse needs of customers and the impact of marketing efforts on both financial and non-financial aspects.

Customer value types, such as economic, functional, experiential, and social value, can be combined in a single product to enhance its overall value for customers.

Product innovations can solely focus on internal aspects of the customer experience, without considering external factors, such as how the product impacts other activities or relationships.

Companies should actively monitor and adapt the value they provide to customers to keep pace with evolving customer needs and market dynamics.

What are the key components of a strategic approach to managing customer heterogeneity?

Customer heterogeneity can be either latent or hidden, making it difficult to accurately assess and address.

Which of the following are reasons why customers differ?

Customer segmentation aims to divide a heterogeneous market into smaller, more homogeneous groups based on their similarities in characteristics, requirements, and behavior.

Useful customer segmentation should be measurable, substantial, accessible, differentiable, and actionable.

The objective of targeting is to select the most profitable customer segments and actively engage them with tailored marketing efforts.

Positioning explains to the target customer why they should buy the product or service.

Effective positioning should be relevant to customers' needs, resonate with their values, and be realistic.

Clustering focuses on groupings where members within groups are similar, while maximizing the differences between groups.

Clustering analysis consists of two primary stages: segmenting and describing.

'Bases' in clustering are typically demographic and geographic information that help explain and describe the resulting customer segments.

Descriptors, unlike bases, influence the grouping process in clustering.

Cross-segment spillovers occur when marketing activities or strategic decisions aimed at one customer segment inadvertently affect other segments.

Cross-segment spillovers can only be negative, hurting brand reputation.

When managing customer dynamics, businesses should treat customers as static entities with unchanging needs and preferences.

What are the five sources of customer dynamics?

The speed of change in the marketplace has slowed down in recent years, making it easier for businesses to manage customer dynamics.

Change in customer dynamics is inherently bad for businesses, posing a significant threat to their operations and profitability.

Which of the following is NOT a common approach for managing customer dynamics?

The Lifecycle Approach focuses on categorizing customers based on their current life stage, such as age or family status, and applying a standardized strategy accordingly.

Dynamic Customer Segmentation focuses on creating customer segments based on their expected future behavior and potential for value creation.

The Customer Lifetime Value (CLV) model focuses on calculating the net present value of a customer's future cash flows based on their expected relationship with the company.

The AER (Acquisition, Expansion, Retention) model is a dynamic customer segmentation model that classifies customers into three distinct stages.

The AER model provides insights into customer profitability and the best strategies for moving customers between different stages.

Customer Lifetime Value (CLV) is a metric that assesses the total value of a customer over their entire relationship with the company.

Customer Lifetime Value (CLV) is typically treated as an asset, comparable to other financial assets, such as investments or inventory.

The Retention Rate (r) in the CLV model represents the probability that a customer will stay with the company for the next period.

Discount Rate (d) in the CLV model reflects the time value of money, recognizing that future cash flows are less valuable than immediate cash flows.

The CLV formula takes into account only the present value of future cash flows, ignoring the past cash flows generated by customers.

CLV is primarily useful for assessing the value of 'just-acquired' customers.

Not all customers are equally valuable, and companies should prioritize investing in high-value customers while limiting investments in low-value customers.

Confusing loyalty with profitability can lead to overinvesting in loyal customers who may not actually generate significant revenue for the company.

Sustainable Competitive Advantage (SCA) refers to the ability to consistently outperform competitors by providing unique and hard-to-imitate benefits that matter to customers.