chapter 7

Question 1

Chapter 7

Answer 1

Crafting a Customer Value
Proposition and Positioning

Question 2

By clearly articulating its value proposition and positioning, companies can deliver high customer value and satisfaction, which lead to high repeat purchases and ultimately to greater company profitability.

Answer 2

Developing a Value Proposition
andPositioning

Question 3

Developing a Value Proposition Variables

Answer 3

functional
psychological
monetary

Question 4

reflects the benefits and costs that are directly related to an offering’s performance.

Answer 4

Functional value

Question 5

encompasses the psychological benefits and costs associated with the offering.

Answer 5

Psychological value

Question 6

includes the financial benefits and costs associated with the offering.

Answer 6

Monetary Value

Question 7

is the perceived value of the bundle of functional, psychological, and monetary benefits customers expect from a given market offering because of the product, service, and image.

Answer 7

total customer benefit

Question 8

is the perceived bundle of functional, psychological, and monetary costs customers will incur in evaluating, obtaining, using, and disposing of the given market offering.

Answer 8

Total customer cost

Question 9

based on the difference between benefits the customer gets and the costs he or she assumes for different choices.

Answer 9

customer value proposition

Question 10

reveal the company’s strengths and
weaknesses relative to those of various competitors

Answer 10

customer value analysis

Question 11

suggests that the seller must assess the total customer benefit and total
customer cost associated with each competitor’s offer in order to know how its own offer rates in the buyer’s mind.

Answer 11

customer value analysis

Question 12

steps in customer value analysis

Answer 12

Identify the relevant attributes and benefits that customers value.
Assess the relative importance of these attributes and benefits.
Assess the company’s and competitors’ performance on the key attributes/benefits.
Monitor customer value over time.

Question 13

the act of designing a company’s offering and image to occupy a distinctive place in the
minds of the target market.

Answer 13

Positioning

Question 14

deciding on a positioning involves:

Answer 14

1. Choosing a frame of reference by identifying the target market and relevant competition
2. Identifying the optimal points of parity and points of difference given that frame of reference

Question 15

serve as a benchmark against which customers can evaluate the benefits of a company’s offering

Answer 15

frame of reference

Question 16

products or sets of products with which a brand competes and that function as close
substitutes

Answer 16

category membership

Question 17

are attributes or benefits that differentiate the company’s offering from the competition

Answer 17

Points of difference (PODs)

Question 18

Three criteria determine whether a brand association can truly function as a point of difference:

Answer 18

desirability
deliverability
differentiability

Question 19

are attribute or benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands

Answer 19

Points of parity (POPs)

Question 20

basic forms of points of parity

Answer 20

category
correlational
competitive

Question 21

also called positioning maps are visual representations of consumer perceptions and preferences.

Answer 21

Perceptual maps

Question 22

is a company’s ability to perform in one or more ways that competitors cannot or will not match.

Answer 22

Competitive advantage