MKTG 448 Exam 2 - FLASHCARDS - Creating Customer Value
What is the ability to establish a competitive advantage in market position within specific customer segments?
Superior performance
True or false: the customer value equation helps identify the attributes driving customer value in a specific customer segment by assigning each salient attribute weights?
TRUE
What do we look at to assess customer value?
To assess customer value, we look to the drivers of key behavioral intent, such as customer satisfaction, intention to purchase, attitude toward the offering, etc
How does a firm develop a customer value equation?
The firm obtains systematic feedback from customers in different segments
What is defined as the difference between what a customer pays for a product or service and the bundle of benefits received?
Value
What are the four types of customer value?
economic value, functional value, experiential value, and social value
What type of value do customers get when a product provides tangible monetary savings either at the time of purchase or over its long-term use?
Economic value
True or false: in many settings consumers derive social value from products?
TRUE
What is the maximum price that a customer should be willing to pay for a product?
Economic value to the customer (EVC)
a customer should be willing to pay a price for the new product that is equal to the savings from using or operating the new product, plus the purchase price of the competing product.
What is calculated as the total life cycle cost or cost of ownership over the entire life of a product?
Economic value to the customer (EVC)
True or false: EVC is relative, not absolute?
TRUE
True or false: Two different customers who use different products or have different usage patterns may derive different EVC from the same new product?
TRUE
What is a measurement of a customer’s attitude toward a product or a brand?
Customer satisfaction
What is the most straightforward customer satisfaction metric?
the customer satisfaction score (CSAT)
True or false: Unlike customer satisfaction, customer loyalty is forward-thinking?
TRUE
What is a set of behaviors and attitudes that a customer exhibits that demonstrate loyalty to a product, or brand, such as repeat purchases or choosing the brand over a competitor?
Customer loyalty
True or false: Customer loyalty is difficult to measure because it’s subjective, and it can vary by business or industry?
TRUE
What is the total revenue or profit generated by a customer over the entire course of their relationship with your business?
Customer lifetime value (CLV)
True or false: the higher the CLV, the more valuable a buyer is to your business, as they would generate more revenue and are more likely to be loyal?
TRUE
What is the extent to which some facts and perceptual elements are prominent and top-of-mind as well as easier to recall, remember, and imagine than others?
Salience
What represents the extent to which a strategic area is associated with an outcome of interest, like overall customer satisfaction, sales, or profitability?
Importance
True or false: The stronger the association between an input and outcome of interest, the more important the input?
TRUE
What is the customer’s perspective of customer value?
Customer value is the trade‐off a customer makes between total perceived benefits and total perceived sacrifices
What is the firm’s perspective of customer value?
Customer value is the relationship and economic value of the customer to the firm
What is value derived when a product provides tangible monetary savings either at the time of purchase or over its lifetime?
Economic value
What is value derived from product attributes or features?
Functional value
What is intangible psychological and emotional value that can be derived from brands?
Experimental value
What is value derived from social relationships associated with the product?
Social value
Does the long-term health of a company depend on acquiring customers or retaining customers?
the long-term health of a company depends not on acquiring a customer but almost entirely on retaining that customer
What is the sentiment of the customer after completing a transaction with your business?
Customer satisfaction
What is an economic indicator that measures the satisfaction of consumers across the U.S. economy?
The American Customer Satisfaction Index (ACSI)
How many customers does the ACSI interview annually and ask about their satisfaction with the goods and services they have purchased and consumed?
About 180,000
What is the percentage of existing customers who stop purchasing your products or services?
Churn
How often is churn measured?
measured in a year, 90 days, or 30 days
What is NPV?
Net present value
What is the present value of future cashflows attributed to the customer relationship?
NPV
What is the churn rate given the following information? • An NFL franchise tracks its season ticket renewals • During the 2023 season, the franchise had 20,000 season ticket holders • A season ticket price increase of 22% was initiated for the 2024 season • Of the 2023 season ticket holder 18,000 choose to renew their season tickets
(20,000-18,000)/20,000 = 0.1 otherwise stated 10%
10% churn rate
