Final Exam Preparation Exercises

1. An online bookstore specializes in selling rare and out-of-print books to a niche audience
of avid readers and collectors. The table below shows the average annual order value and
number of orders per year of the bookstore's customers. Calculate the customer lifetime
value (CLV) for the online bookstore assuming an average customer lifespan of 2 years.
Customer Average Annual Number of Orders
Order Value per Year
Bookworm Bibliophiles $500 2
Literary Legends $250 4
Page Turners $100 10
Bookworms Anonymous $300 5
Ink Stained Scholars $200 3
Literary Giants $750 2
Wordsmiths Guild $150 6
Pen & Paper Society $250 4
Bibliophiles Unite $400 3
Bookworms' Haven $500 2
Literary Oasis $100 2
Page Masters $500 1

2. A clothing retailer recently conducted a comprehensive survey to better understand and

segment its diverse customer base. The survey focused on key factors such as the
frequency of customer visits (Visits Per Year), the average amount of money a customer
spends during a single visit (Money Spent Per Visit), number of years as a customer, and
customer satisfaction with the overall shopping experience on a scale of 1 to 5
(Satisfaction). After analyzing the data, three distinct customer segments were identified.
Years as Visit Per year Money Spent Satisfaction
a customer per visit
Cluster 1 2.5 1 400 1.5
Cluster 2 5.5 5 4500 4.5
Cluster 3 7.5 3 1200 4.8
A. How would you characterize each customer segment based on the identified
characteristics, and what unique attributes define each segment?
B. In which segment would you categorize a customer who visits the store three times a
year, spends 950 per visit, has a satisfaction rating of 4?
3. A local artisan bakery caters to a discerning clientele who appreciate high-quality,
handcrafted bread. The table below shows the average annual spending and number of
visits per year of the bakery's customers. Calculate the customer lifetime value (CLV) for
the local artisan bakery assuming an average customer lifespan of 3 years.
Customer Average Annual Number of
Spending Visits per Year
Bread Connoisseurs $3000 24
Dough Divas $2000 12
Yeast Enthusiasts $1000 52
Sourdough Savants $4000 18
Gluten-Free Gurus $2500 15
Artisan Admirers $5000 12
Baker's Buddies $3500 20
Pastry Perfectionists $2500 10
Bread Basket Believers $1500 8
Loaves and Love $4000 16
Crust Crusaders $1000 6
Muffin Maniacs $2000 12

4. A leading electric vehicle (EV) manufacturer is launching a new line of EVs and seeks to
understand the preferences of its potential customers. They conducted a conjoint analysis
to assess the importance of various attributes. The attributes and their respective levels are
as follows:
• Self-driving capability: (1) No (2) Yes;
• Price: (1) $60,000 (2) $50,000 (3) $40,000
• Range: (1) 250 miles (2) 300 miles (3) 400 miles
• Charging time: (1) 4 hours (2) 2 hours (3) 45 minutes
•
Based on the results of the conjoint analysis and the part-worths (utilities) derived from the
conjoint analysis, answer the following questions:
A. Which attribute holds the highest importance among customers when making an EV
purchase decision?
B. Which attribute holds the least importance among customers?
C. How much more are customers willing to pay for an EV with self-driving capability
compared to an EV without self-driving capability?
D. How much more are customers willing to pay for an EV with a 400-mile range compared
to an EV with a 250-mile range?
E. How can this conjoint analysis help the EV company in making an informed decision
related to new product development?