MBA Programme

Period P2 Mar-Apr 2021

Last Name Silva Araujo Orsini

First Name Mateus

Student ID 1020949

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MANAGING CUSTOMER VALUE

Exemption Exam
Faculty: Paulo ALBUQUERQUE AND ABHISHEK BORAH

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Comments and Instructions

 Please answer all questions below onto the separated booklet provided.
 Duration of the exam: 3 hours.
 This is a closed book exam.
 Your answers must be in English.
 This exam was designed to discriminate those students with very good
knowledge of marketing from those with merely average knowledge of
marketing. Some questions require you to take a position and defend it. In
general, we are looking for concise, well-structured, conceptually sound answers.
 These questions are difficult on purpose. We want to see the depth of your
knowledge.
 Conciseness matters. Long rants full of vague generalities are signs of not
really understanding the question or being able to provide a good answer.
 The writing does not have to be beautiful but keep it legible as much as
possible.
You are encouraged to use diagrams wherever appropriate.
 The exam will be graded holistically. You cannot be exempted if you
ignore several key concepts, even if your other answers are brilliant.
 Exemptions are granted based on your professional and educational
background and your exam performance. You need to provide a copy of your
CV with your exemption exam. We can often tell who has embellished a CV for
the purpose of the exemption, so be careful.
 No feedback will be provided. Answers to these questions will be
provided directly or indirectly in the Managing Customer Value course.
 Decisions are final.

Good luck!

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QUESTION 1

I. Cars. The main and explicit need of cars is to move consumers from
one place to another. However, implicit it is a signal of status (if you
can afford to buy an expensive car is because you have a good job and
earn money) a signal of self-expression (if you drive sportive car you
are a person that likes more adrenaline and is more “sharp”; If you
drive a conservative car you are more fancy and conservative; If you
drive an Asiatic car you likes security; If you drive an European car
you likes technology) and also fulfill an innate human desire of
autonomy and freedom.

II.
III. Volvo is a Swedish brand that focus on middle-age men that likes
technology and security, not needing to have the fastest cars in the
world but a car that can fulfill both his and his family needs. As cars
are a signal of values, the company focus on ambition, simplicity, and
authenticity. Also, because of its unique origin, it tries to differentiate
itself through the “Swedishness”. This brings authenticity, respect and
pride, differentiating themselves from other Europeans automakers
such as VW and BMW, exploring a niche market. Their main
competitors are in Europe. They can be very sportive (Aston Martin),
very conservative (Mercedes), very fancy and expensive (Jaguar) or
more affordable and less authentic (VW).
IV. Volvo has a market opportunity to be a little bit more sportive without
losing its distinctiveness. If they do that, they can even charge higher
prices (in the perceptual map position itself a little bit more higher

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and to the right, above Jaguar and on the left of Aston Martin). They
will charge a higher premium benefiting from its values position. They
will keep the simplicity value as they will move away from
conservative, they will increase distinctives and leverage authenticity
and they will increase ambition moving to “sportive” categories. They
can also expand the range of the age of their customers without losing
their branding.

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QUESTION 2 – Software platform (SaaS) for marketing and salesforce
automation (B2B) in Brazil. Suppose I am the marketing manager (I answered
the question in first voice)

I. Funnel Divided in 5 steps: Awareness (A), Interest (I), Evaluation (E),

Commitment (C/S) and Sale/Loyalty (S/L)
a. A = As I am selling a high-tech product in B2B model in an
emerging country, my buyers (influencers and decision makers),
are not aware of my product, technology, and benefits for him. I
need to advertise to make my market know about me. More than
that, they need know about the benefits and how to apply my
product. I need to “educate” them. I will use digital tools of SEO, e-
books, whitepapers, social media, and direct email to grab
attention and the max numbers of persons. I will use my internal
marketing team to produce the content (“one time job” and a
junior specialist to optimize SEO with time). I target a number of
100 leads (does not matter for the exercise purpose if is units,
millions, etc. I want to show the percentage drop-offs across the
funnel items and have a reference base for future objectives to
improve the funnel)
b. I = I will use relationship metrics as numbers of open and
visualization of emails, time on the page, response clicks, e-books
downloads and others to “move” some leads (not all will have
interest or will be sufficient aware of the benefits) to this item of
the funnel. I do not want to move people that is not at least initially
aware because I will waste time and effort (cost) of my “farmers”
to initiate a human contact. Farmers are my employees that will
make an initial human approach to understand better my lead
needs and start to give him information about my features, other
clients that is using my service and etc. I want them to receive
concrete information about me now, if possible with numbers (e.g.
my customer X is using my platform and improve his marketing
campaign ROIs in Y% or reduce Z% of costs).Then you will use
tools to make more familiarity to move them to have familiarity
with your product (next phase). 80 leads will be in this phase.
(20% drop off)
c. E = Now is time to make my leads feel a taste of my products. My
farmers will guide only the people that will really benefit from my
service to here. The drop-off will be a little bit higher because of it,
but I do not want to sell a subscription (with the obligation of
make a customer support later) to someone that has a high chance

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 to regret or churn later or to consume my support resources. They
can also damage my brand. I want to maximize the customers with
high lifetime value. I will use tools as webinars, demos, customers
evangelists (testimony of “anchor” customers, especially if is in the
same sector of the lead). Number 48 leads will be in this phase
(32% drop-off)
d. C/S = In this step my “closers” (more experienced salespeople) will
receive from the farmers only the leads that will sure benefit of my
solution AND have money to pay for my product for a long period
of time. My company operates in recurring revenue and I want
predictability. Companies that will sure benefit from my product
but has a high probability to churn in the short-term will stay in
the last phase until we have more probability. Churn for me is
waste of resources (people, time, data, infrastructure). Also, if the
company has a low probability to make the commitment, I am
waste my closer time (and they are very expensive) that could be
dedicated to a more “better” customer. I am willing to extend the
trail period to make a customer comfortable, but at some point my
closer need to “make the job”. In this phase I expect a high drop-
off. Until here my customers did not had “money to lose” and my
farmers cannot send too much “unheated” customers to my
closers. 24 leads (50% drop-off)
e. S/L = This is the last part of funnel. The number of people here
needs to be a little bit bigger than my planned sales target so I can
have a financial cushion and can beatmy goals. If I made the job
right until now, there is a high probability that customers will buy,
because they have money, they know they will benefit from my
product and they are sure I know what I am selling and that I will
help them (reduce of uncertainty). Better than this, they will be
loyal (not churn) and will promote my company (referral to
another leads), increasing my CLV, reducing my CAC (I will need
less advertise because you can have word-of-mouth for “free”) and
improving my brand (through improving of trust). 7 leads (70%
drop-off. Closers conversation rate of 30%. Funnel conversion rate
of 3%). I than create a flywheel that will make my drop-off rates
along the channel to diminishing, improving my target
percentages.
II. Based on my target, I can make a backward analysis. Which part of the
funnel is not giving sufficient leads to achieve the target sales? Where
are leads dropping out more? For example: suppose the numbers are
following the plan until the fourth phase. Why I cannot make people to
move from the first items, more informative, to a real commitment? Is
because I need to put more effort (time and money) on the third

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 phase, so I have more informed customers more inclined to commit?
Or should I hire more expensive and experienced my closer people?
Or even I should apply more training to the hunters, so they do a
better job on the second and third stages?
III. Yes. Even though I am selling to companies, in the end is people
buying from people. Also, I am selling technology and is better to use
them a technology channel (affinity and association). As presented in
the first stage of my funnel, social media is part of my strategy to
create SOV (Share of Voice) and improve brand awareness. But I will
use social media in a targeted way: target the employees of my
prospective clients (both influencers and decision makers) as I do not
want to spend useless resources with people outside my customers.
IV. No. Mass media is not optimized here. As I explained on III, I need a
very specific targeted audience. If I use mass media, I will have in my
first stage people that does have even a chance to buy my product. It
would a completed waste of time and resources.

QUESTION 3

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I.
II. Reasoning
a. In the 2 weeks before I assumed the demand is constant for graph
purposes and as I assumed nothing change in external variables
(e.g., no new blockbusters films being released, no blizzards, no
substitute products around as concerts, no COVID, seasonality, etc)
and internal variables (e.g. no new marketing campaigns, no
broken equipment, etc.). But of course, is not a total straight line.
b. Again, the other variables are constant as the previous 2 weeks.
Because of the promotion I expected to along the week the sales
volume increase. I avoided to define a day as the peak of sales. The
reason is to show, smoothly, that the sales will increase due the
promotion during the week (increase in demand due to lower
prices) and will not sustain thereafter as the tickets has low
variability and low novelty. If was a product first unknown to the
market, maybe, the promotion could increase brand and product
awareness that could sustain a higher demand than before. Or
could be the case the promotion would lead customers to a new
experience, but I assume the company’s capabilities are the same
and then the experience it can offer too. I also assume that the
company does not have a problem of reaching consumers. Thus,
the marketing of the promotion reached enough consumers.
c. I believe there is a relative high probability that just after the
promotions that demand would decrease a little bit from before

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 the week of the promotion. This decrease can be or cannot be
sufficient to neutralize the volume of sales in the week of the
promotion. This would happen for mainly because people will buy
tickets for movies in the next 4 weeks. As movies will not change
during this period, I assumed that most of the persons that want to
see those movies would buy in the promotion. So, for the following
weeks only marginal buyers will buy. Also, there is a chance of a
sold-out, and the company could have very low (even 0) new sales.
d. There is also a chance that even after the following 4 weeks, when
the movies finally change, the sales take a while to come back to
the previous demand. This can happen because consumers, aware
of the last promotion, will be expecting a new promotion of the
next following days. I wanted to reflect it on the chart, but of
course is not a most.
III. I need to analyze the results. As I am expecting a decrease just after, I
need to analyze the final impact of this, principally if this neutralized
the positive results expected during the promotion. If in the end I had
more profit (or at least positive cash flow to fund future marketing
initiatives), I would be inclined to repeat. If not, I would not make any
promotions of this. To be sure I would repeat, I would conduct further
analysis with consumers. I want to analyze if other aspects, principally
the currently movies, were very decisive. Maybe if I have less
attractive movies, I will not have sufficient increase in demand that
will pay for my lose of margin with the promotions. For that, I can
conduct surveys or even a conjoint analysis, evaluating the trade-offs
between price and film attractiveness, for example

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QUESTION 4

I. 3D Printers
a. As Head of Business Development responsible for the Marketing at
a 3D Printer startup in Brazil, I faced a challenge to understand
what my consumers, in the different markets we are selling, prefer
and would want. As the competition was increasing, this was more
crucial.
b. The first step was to segmentate our different customers
categories. I knew that different customers would place different
values to different attributes and features. I segmented between
industries, education (schools and universities) and “geeks” (the
technology enthusiasts that were our evangelists)
c. The second step was to define the attributes and features we
would test for each one. For industries was velocity of the printer,
price, materials accepted (plastic, metal, resins that will vary
regarding the technology employed in the printer) and multicolor.
For education was price, customer support, materials accepted and
multicolor. For geeks was price, new features, velocity, and
technology.
d. The third step was to define the questions to avoid bias and select
the customers on the three customers’ base. We choose the
customers we have more direct access to simplify,
e. Fourth step was to collect the data. We use email plus survey
analytics.
f. Fifth step was to analyze the data. We discovered that industries
would pay a higher price if the printer were faster (because they
need to reduce time of their prototype to develop products faster.
The price will dilute with the sales) and the kind of materials were
almost irrelevant, considering they were cheaper (in this case,
plastics). For education customer support was the most valuable
feature (under stable as they are not technologist and need
continuous help to use. They will probably pay a higher price if
they trust we could deliver support). And “geeks” were the most
difficult customer as they valued low prices and technology (we
probable made wrong questions)
g. Then we took decisions: we raised prices for education to pay for
our better team development. We also started content market to
help in the support and reduces our costs in this department. We
changed our sales approach to industry, valuing more our
technical aspects, quick delivery (3D printers in Brazil can take up
to 6 months to be delivered if demand is high) and our proprietary
technology that would reduce errors that would slow the printing

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 (you need to restart the printer). For geeks we decide to not make
any decision yet to wait and gather more information as we had
the hypothesis that we could be better if we “fire” this customer
segment and focus on the other two as they are very difficult to
deliver and we were a startup with financial constraints.
II. Advantages vs Disadvantages
a. Advantages:
i. With Conjoint Analysis is possible to determine both the
relative importance of each feature/attribute (e.g.
spaciousness, price, number of stops) as well as the
intensity (which levels) of each attribute are most preferred
(e.g. how much is a price of 50 more preferred than a price
of 100).
ii. Define and prioritize product roadmap. When you have a
better grasp of what consumers value most, you can focus
your resources (time, money and effort) to have focus and
deliver what consumers wants faster.
iii. Trade-offs simulations to adjust your pricing structure
regarding your customers willingness to pay for specific
elements. Includes evaluation of price sensitivity.
iv. Create market simulation models utilizing more valuable
date and inputs about consumer behavior and create more
simulations and predictions with help of technology.
v. Market segmentation for better marketing programs,
principally positioning of your product. If you know what
consumers values most, you can position your products
regarding it (or even shut off your product if you do not
have what consumers values)
vi. Understanding better (or predict) which features or
attributes your consumers value most helps R&D team
develop better features faster. Ex: the consumers of a TV
manufacturer value more picture quality than sound quality
while valuing more picture quality than price. Costs aside,
you can focus resources on new tech for picture than sound.
b. Disadvantages:
i. In my experience, the biggest disadvantage is the
complexity. You need a big and refined structure of human
capital if you going to conduct internally. If externally, is
expensive.
ii. Misleading data. You need confinable data to make
impactful decisions as budgeting spending, shut-off lines,
R&D spending etc.

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iii. Human bias. If you use subjective inputs of data (as
questions), people can lie, have paralysis analysis, status
quo bias or other human misbehaviors that can mislead
you.
iv. Difficult to use. Products are more complex than one or two
tradeoffs and there is no procedure for conversion of
perceptions.

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