Marketing and Customer Value Management
This section covers Marketing and Customer Value Management. The exam tests whether you can choose segments, build a value proposition, and manage customer economics rather than list the marketing mix.
Core rules and concepts
- Segmentation must be measurable, substantial, accessible, differentiable and actionable. Targeting compares segment attractiveness with fit to capabilities. Positioning must be distinctive and credible in the customer's mind.
- Customer value is perceived benefit minus perceived cost. Lifetime value (CLV) links retention and margin to acquisition spend. A simple CLV = annual margin × retention rate ÷ (1 + discount rate − retention rate).
- The marketing mix must be internally consistent: product, price, place and promotion reinforce the same position. Brand equity is an asset built by consistent promises and delivery.
Worked example
A subscription service earns $120 annual margin per customer, retains 80%, and uses a 10% discount rate. CLV = 120 × 0.80 ÷ (1.10 − 0.80) = $320. If acquisition cost is $260, net value is $60 per customer; at $340, the campaign destroys value. Reason: high response or low initial price can still be unprofitable if retention is weak. The exam may ask you to compare segments by net CLV, not revenue.
Traps
Treating market share as profit; using average satisfaction to infer segment needs; ignoring acquisition cost or churn in CLV; confusing a feature with a benefit; assuming a discount always grows profit.