Marketing Research

Question 1

What is Conjoint Analysis?

Answer 1

• Used to extract preferences and consumer willingness to pay.
• Helps us find out what characteristics consumers value.
• Run a simple linear regression and equal the rating to all characteristics/components of the product with a dummy variable associated to each. We end up with how each characteristic relates to the rating.

Rating = 𝛼 + 𝛽0 d(p = $1.000) + 𝛽1 d(p = $2.000) + 𝛽2 d(Frame = Black) + … + ε

When 𝛽 is higher, consumers like the characteristics more (so they give a higher rating).

Question 2

What are Perceptual Maps?

Answer 2

Visual representations used to illustrate how consumers perceive products or brands in relation to each other.

Question 3

What are the different types of Consumer Analytics?

Answer 3

User Testing/Experience: Consumer goes to the website (for example) to decide on a purchase. While doing it, he will narrate all the processes that he goes through. Very good to provide inputs for engineers to improve the website.

Eye Tracking: Sit consumers in front of a computer and see where they are focusing when looking at the web page, allowing us to create another ad in the important focus points, or even to change the layout.

Funnel Analysis: Check how many users viewed the page, then how many created accounts, then how many uploaded a file, and understand where customers are being lost.

Cohort Analysis: Tables with cohort analysis tell us how consumers are behaving, given the first time they arrive at the website. Tracks how website is performing over time.

Question 4

What are the types of Customer Value?

Answer 4

• Functional Value: The utility or performance that a product or service provides to meet the customer’s functional needs or solve specific problems. E.g. “I want the suit!”
• Monetary Value: The perceived financial benefits or savings associated with a product or service in relation to its cost. E.g. Reimbursement
• Psychological Value: The impact of a product or service on the customer’s self-perception, self-esteem, or identity. E.g. Apology/Admission of guilt

If you miss one of the customer values, you won’t satisfy the customer. Psychological value is the one playing the major role.

Question 5

What are the different stages of managing service quality?

Answer 5

• Desired level of service
• Company policy
• Employee behavior
• Customer satisfaction

Question 6

What is Customer Lifetime Value?

Answer 6

Represents the total predicted revenue a company expects to earn from a customer throughout their entire relationship.

It is a forward-looking metric that takes into account the potential value a customer brings over the course of their engagement with a business.

Question 7

What are the two views on managing service quality?

Answer 7

Theoretical: If you take care of your employees, they will take care of your customers, and your customers will take care of your shareholders.
Practical: You should not accomodate every customer request.

Question 8

Customer Lifetime Value - Null Hypothesis and Errors

Answer 8

Null Hypothesis: The customer makes an honest request.

• Type I Error: Deny an honest request.
• Type II Error: Satisfy a fraudulent request
  The types of error depend on the type of service you want to offer.

Question 9

Levels of Products and Services

Answer 9

Core Product: fundamental benefit or solution that addresses the customer’s underlying need or problem.
* Functional benefit: What the product will enable you to do;
* Emotional benefit: How the product or service will make you feel.

Core Customer Value: What is the buyer really buying? What is the core benefit? “In a factory, we make cosmetics, in the store, we sell hope”.