Question

6. Customer lifetime value

a. refers to the projected sum of all transactions over the lifetime of any buyer.

b. is the index increasingly used by innovative firms to more effectively predict annual gross revenues.

c. applies to the intrinsic worth of a product during the ownership period of the original buyer.

d. includes the risk of a single customer defaulting on outstanding credit balances.

e. is the net present value of future cash flows as projected from a customer relationship.

7. According to Gerard Tellis, author of “Beyond the Many Faces of Price,” complementary pricing and price bundling are both pricing strategies to help the firm in

a. managing the product mix.

b. varying prices among market segments.

c. building competitive position.

d. establishing global product-market dominance.

e. all of the above apply.

8. If three-pronged blivets are characterized by inelastic demand, and the producer raises the price,

a. total revenue and demand will increase

b. the relevant range of the demand curve will shift

c. inelasticity of demand will increase

d. total revenue will increase, but demand will decrease

e. total revenue and demand will decrease

9. When using price bundling as a pricing strategy,

a. the seller wants to emphasize the pricing and value of each individual product and service included in the bundle.

b. the seller includes at one low price a group of products or services that are difficult to sell separately.

c. the seller can introduce a new product or service together with a known offer, at one low price.

d. “b” and “c” are correct

e. “a,” “b” and “c” are correct

10. In the Build – Measure – Learn Loop, we

a. expect that all product/service ideas are continuously recycled for consideration.

b. focus on determining and repeatedly validating the target customer's persona.

c. seek to minimize viable product or service alternatives through application of either quantitative or qualitative criteria.

d. recognize outcomes from testing and apply learning to the next iteration of the Loop.

e. develop alternative scenarios for executing a pivot in our product strategy.

Answer 1

Answer 6. Correct option is (e)

Customer lifetime value is the net present value of future cash flows as projected from a customer relationship. Customer lifetime value (CLV), lifetime customer value (LCV), or user lifetime value (LTV) is the dollar value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship.

Answer 7. Correct option is (e)

According to Gerard Tellis, author of “Beyond the Many Faces of Price,” complementary pricing and price bundling are both pricing strategies to help the firm in managing the product mix, varying prices among market segments, building competitive position, establishing global product-market dominance.

Answer 8. Correct option is (d)

If three-pronged blivets are characterized by inelastic demand, and the producer raises the price, total revenue will increase, but demand will decrease. Because if the price for an inelastic good is increased and the demand does not change, the total revenue increases due to the higher price and static quantity demanded. However, price increases typically do lead to a small decrease in quantity demanded.

Answer 9. Correct option is (e)

When using price bundling as a pricing strategy-

a. the seller wants to emphasize the pricing and value of each individual product and service included in the bundle.

b. the seller includes at one low price a group of products or services that are difficult to sell separately.

c. the seller can introduce a new product or service together with a known offer, at one low price.

In a bundle pricing, companies sell a package or set of goods or services for a lower price than they would charge if the customer bought all of them separately. Common examples include option packages on new cars, value meals at restaurants and cable TV channel plans

Answer 10. Correct option is (e)

In the Build – Measure – Learn Loop, we develop alternative scenarios for executing a pivot in our product strategy. Because the Build-Measure-Learn loop pertains to the cyclical process of turning ideas into products, measuring the reactions, response, and behaviors of the customers against the products that have been built, and learning whether to persevere or pivot the idea.