Customer Segmentation Techniques Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Customer Segmentation Techniques flashcards as text
Which segmentation approach divides customers based on their actual purchasing behavior, usage rates, and brand loyalty?
Answer: Behavioral segmentation
Behavioral segmentation groups customers by observable actions such as purchase frequency, usage rate, loyalty status, and benefits sought.
A company identifies a group of customers who are highly price-sensitive and switch brands based on promotions. This best represents which segment type?
Answer: Value seekers
Value seekers are price-sensitive customers who actively comparison shop and respond strongly to discounts and promotions.
In RFM analysis used for customer segmentation, what does the 'F' stand for?
Answer: Frequency
In RFM analysis, F stands for Frequency—how often a customer makes a purchase within a defined period.
Which segmentation method would best help a B2B pricing manager identify which industries derive the most value from their product?
Answer: Firmographic segmentation
Firmographic segmentation classifies B2B customers by industry, company size, revenue, and other organizational characteristics to identify value drivers.
A pricing analyst wants to set different prices for customers based on their maximum willingness to pay. Which segmentation basis is most directly relevant?
Answer: Economic value to customer (EVC)
Economic Value to Customer (EVC) measures the monetary benefit a customer receives from a product, directly informing willingness-to-pay-based segmentation.
What is a primary risk of over-segmenting a market for pricing purposes?
Answer: Operational complexity that outweighs revenue gains
Excessive segmentation increases administrative costs and operational complexity, which can erode the profitability gains that segmentation is intended to create.
When using needs-based segmentation, what is the primary variable used to group customers?
Answer: The specific problem or benefit the customer seeks to address
Needs-based segmentation groups customers by the specific jobs-to-be-done, pain points, or benefits they seek, enabling more targeted value propositions.