Marketing Analytics Exam 3 WITH ANSWERS

Marketing Analytics Exam 3 WITH |\ |\ |\ |\ |\




ANSWERS

What companies can you think of that are using
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penetration pricing? - CORRECT ANSWERS ✔✔-Can |\ |\ |\ |\ |\ |\



increase market share rapidly |\ |\ |\




Can overcome barriers to entry such as:
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---Switching costs |\




---Network externalities |\




What techniques are used to assess product designs?
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(test marketing, online attribute testing, conjoint analysis)
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- CORRECT ANSWERS ✔✔- Test marketing
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- Online attribute testing
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- Conjoint analysis
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Test Marketing - CORRECT ANSWERS ✔✔-Assesses
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purchase rate of new product |\ |\ |\ |\




-Provides data on who will buy product |\ |\ |\ |\ |\ |\




-But requires a new product to already be designed
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,Online Attribute Testing - CORRECT ANSWERS ✔✔-
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Assesses differences in response to a set of |\ |\ |\ |\ |\ |\ |\



attributes/features
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-Useful for deciding which attributes/features to focus on
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-But is limited in the ability to compare sets of attributes
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Conjoint Analysis - CORRECT ANSWERS ✔✔Is a statistical
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technique that examines trade-offs consumers make |\ |\ |\ |\ |\ |\



between two or more attributes/features when selecting a
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product/service.
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Uses of conjoint analysis - CORRECT ANSWERS
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✔✔Conjoint Analysis is more appropriate when designing |\ |\ |\ |\ |\ |\ |\



a new product from the ground up.
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Conjoint Analysis is widely used in industry and a large
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number of software packages are available.
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Basically when you want insight on the tradeoffs that
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consumers will make and to figure out which bundle they |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



prefer.


Assumptions of conjoint analysis - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\



✔✔-Products/services represent bundles of attributes |\ |\ |\ |\




-Attributes have two or more levels |\ |\ |\ |\ |\

,-Consumers purchase products/services based on the |\ |\ |\ |\ |\ |\



total value of these attributes and their levels
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List steps in conjoint analysis - CORRECT ANSWERS ✔✔1.
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Prepare for Conjoint: identify evaluation attributes-->
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select levels for each attribute --> form bundles
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(candidate "products") |\




2. Get Preference Data: survey consumers for their
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preferences
3.Code Data: prepare data for analysis by coding it
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4.Calculate Part-Worths: calculate preference for each |\ |\ |\ |\ |\ |\



attribute
5.Apply Results: identify optimal bundles
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What are the advantages of conjoint analysis? - CORRECT
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ANSWERS ✔✔-Versatile |\




-Widely used so very credible|\ |\ |\ |\




-Results are directly applicable |\ |\ |\




-Can reveal hidden consumer preferences for attributes
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and levels that consumers don't realize
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What are the disadvantages of conjoint analysis? -
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CORRECT ANSWERS ✔✔-Often requires preliminary
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market research to set up |\ |\ |\ |\

, -Poorly conducted research can comprise results (i.e. the
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wrong attributes and/or levels)
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-Can be time consuming and expensive to use
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-Non-trivial designs will require specialized software
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Definition of willingness to pay - CORRECT ANSWERS
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✔✔(WTP) is the maximum amount an individual is willing
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to pay for a good or service.
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Consumers differ in willingness to pay |\ |\ |\ |\ |\




-Between products |\




-Over time |\




-Between one another |\ |\




If we set the price higher than a given consumer's
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willingness to pay, they won't purchase. |\ |\ |\ |\ |\




If we set the price lower than a given consumer's
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willingness to pay, the firm is forgoing profits. |\ |\ |\ |\ |\ |\ |\




What are firm's pricing strategies and their capabilities? -
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CORRECT ANSWERS ✔✔The goal is to employ a pricing
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strategy that maximizes profits across all customers,
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even though pricing strategies will never achieve this
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