Marketing Management Final Exam Study Guide

Advertising Agencies

Independent organizations that specialize in the creation, planning, and handling of advertising campaigns for clients.

Advertising Allowances

Discounts or financial incentives given to retailers or wholesalers to encourage them to carry a product or promote it in a specific way.

Cooperative Advertising

A partnership where the manufacturer and the retailer share the costs of advertising the product.

Product Advertising

Advertising aimed at promoting a specific product or brand, focusing on the product's features, benefits, and uses.

Institutional Advertising

Advertising aimed at building the company's image and reputation rather than promoting a specific product.

Pioneering Advertising

A type of advertising used in the introduction stage of a product to inform and educate consumers about a new product or category.

Competitive Advertising

Advertising that aims to persuade consumers to choose a particular brand over competitors. It emphasizes the brand's strengths and advantages.

Direct Competitive Advertising

Advertising that directly compares a product to a competitor's product, often highlighting specific features, pricing, or performance.

Indirect Competitive Advertising

Advertising that emphasizes a product's benefits without directly comparing it to a competitor's product.

Comparative Advertising

A type of direct competitive advertising where a brand compares itself to a competitor, showcasing its superiority on key features or attributes.

Reminder Advertising

Advertising aimed at reinforcing a brand's message, reminding consumers of its existence or benefits, typically used in the maturity stage of the product life cycle.

Advertising Media

The various channels or platforms used to deliver advertising messages, such as TV, radio, online ads, social media, print, and outdoor.

Pay-Per-Click (PPC)

A type of online advertising where advertisers pay a fee each time their ad is clicked. Commonly used in search engine advertising.

Retargeting

A form of online advertising where ads are shown to users who have previously visited a website or interacted with the brand, encouraging them to return and complete a purchase.

Click-Through Rate (CTR)

A metric used in online advertising that measures how often people click on an ad relative to how often the ad is shown (impressions).

Influencers

Individuals with a significant following on social media or other platforms, whose endorsement or promotion of a product can influence consumer behavior.

Copy Thrust

The main idea or key message presented in the copy (written content) of an advertisement, often focusing on benefits, features, or a call to action.

Corrective Advertising

Advertising intended to correct misleading or false information previously conveyed through advertising, often required by regulatory agencies like the FTC.

Trade Promotion

Promotional activities aimed at intermediaries (wholesalers, retailers) to encourage them to sell a product, such as discounts, incentives, or special deals.

Paid Media

Advertising that involves paying for media space or time to place promotional content, such as paid search ads, display ads, and sponsored posts.

Owned Media

Media assets that a company owns and controls, such as its website, social media profiles, and email lists.

Earned Media

Publicity gained through word-of-mouth, PR, social sharing, and organic search results, where a company earns attention without paying for it.

User-Generated Content

Content created and shared by users, such as reviews, posts, videos, or images, often used by brands for marketing purposes.

Search Engine Optimization (SEO)

The process of optimizing website content and structure to rank higher in search engine results, increasing organic traffic.

Pass-Along

When a person shares or forwards marketing content, such as an email or article, with others, potentially broadening its reach.

Branded Services

Services provided by a company that are directly tied to its brand, helping to enhance customer engagement and loyalty (e.g., branded customer support or educational programs).

White Paper

A detailed, authoritative report or guide that addresses specific issues, often used to educate and inform potential customers or stakeholders.

Case Studies

In-depth analyses of a company's products or services in action, highlighting customer success stories and demonstrating value.

Webinar

A seminar or presentation conducted over the internet, often used for education, training, or product demonstrations.

Landing Page

A web page specifically designed to encourage visitors to take a specific action, such as filling out a form, subscribing to a service, or making a purchase.

Blog

An online journal or informational website that posts regular content, often used for marketing, thought leadership, and audience engagement.

Branded Apps

Mobile applications developed by companies to enhance the customer experience, often providing added value, loyalty features, or direct access to products and services.

Brand Community

A group of customers, fans, or enthusiasts who connect and interact with each other and a brand, often sharing a sense of loyalty and affinity toward the brand.

Referral Program

A marketing strategy that incentivizes existing customers to refer new customers, typically through rewards or discounts.

Social Media

Online platforms where users create, share, and engage with content, including platforms like Facebook, Instagram, Twitter, LinkedIn, and TikTok.

YouTube

A video-sharing platform where users can upload, view, and interact with videos, often used for brand marketing, tutorials, and influencer collaborations.

Facebook

A social media platform where users can create profiles, share content, and connect with friends, family, and businesses.

Instagram

A photo and video-sharing social media platform, popular for visual content, influencer marketing, and brand storytelling.

Pinterest

A visual discovery and bookmarking platform where users can save and share images and ideas related to interests like fashion, food, and home décor.

LinkedIn

A social network primarily for professionals, used for career networking, industry insights, and B2B marketing.

Snapchat

A multimedia messaging app known for its disappearing content, filters, and stories, popular with younger audiences for sharing quick, casual updates.

Twitter

A social media platform focused on short, real-time messages known as tweets, often used for quick updates, discussions, and brand engagement.

TikTok

A video-sharing platform known for short-form, viral videos, heavily focused on creative and entertaining content, often used by brands to engage younger audiences.

Bounce Rate

The percentage of visitors who leave a website after viewing only one page, often used as a metric for website engagement and performance.

Marketing Automation Software

Tools and platforms that automate repetitive marketing tasks, such as email campaigns, social media posting, and lead nurturing, to improve efficiency and effectiveness.

Price

The amount of money required to purchase a product or service, typically determined by market demand, costs, and competition.

Target Return Objective

A pricing objective where the company sets a price to achieve a specific return on investment or return on sales.

Profit Maximization Objective

A pricing strategy aimed at setting a price that maximizes profit, typically by charging as high a price as the market will bear.

Benefit Corporation

A type of corporation that has a legal obligation to consider social and environmental factors in addition to financial performance.

B Corporation (B Corp) Certification

A certification granted to companies that meet high standards of social and environmental performance, accountability, and transparency.

Sales-Oriented Objective

A pricing objective that focuses on increasing sales volume or market share, sometimes at the expense of short-term profits.

Status Quo Objective

A pricing objective where a company aims to maintain its current market position or avoid price competition, typically by matching competitors' prices.

Nonprice Competition

Competing with other businesses through factors other than price, such as product quality, brand reputation, customer service, or unique features.

Administered Prices

Prices set by companies rather than being determined by market forces, often through price-fixing or agreements between sellers.

One-Price Policy

A pricing strategy where the company charges all customers the same price for a product, regardless of negotiation.

Flexible-Price Policy

A pricing strategy where a company allows for different prices based on the buyer, time, or market conditions.

Dynamic Pricing

A pricing strategy where prices are adjusted in real-time based on demand, competition, or other factors, often seen in industries like travel or e-commerce.

Skimming Price Policy

A pricing strategy where a company initially sets a high price for a new product to maximize profits from early adopters before lowering the price over time.

Penetration Pricing Policy

A pricing strategy where a company sets a low initial price to gain market share quickly and attract customers, with the intention of raising prices later.

Introductory Price Dealing

A temporary low price offered at the beginning of a product's life cycle to encourage trial or generate interest.

Basic List Prices

The standard price of a product before any discounts or special offers are applied.

Discounts

Reductions in price offered to customers, typically to incentivize purchases or reward customer loyalty.

Quantity Discounts

Price reductions offered for buying in large quantities, either on a per-unit basis or as a total discount.

Cumulative Quantity Discounts

Discounts based on the total quantity purchased over a period of time, encouraging repeat business.

Noncumulative Quantity Discounts

Discounts offered based on a single purchase, rather than cumulative purchases over time.

Seasonal Discounts

Price reductions offered for purchasing products or services during off-peak seasons or times.

Net

The amount due after all deductions, such as discounts or allowances, have been applied to the original price.

Cash Discounts

Discounts offered to customers for paying their invoices early, encouraging prompt payment.

2/10, Net 30

A payment term offering a 2% discount if the invoice is paid within 10 days, with the full amount due in 30 days.

Trade (Functional) Discount

A discount given to intermediaries (wholesalers or retailers) for performing certain functions, such as selling or storing products.

Allowances

Price reductions granted for specific actions

Advertising Allowances

Discounts or financial incentives given to retailers for advertising a manufacturer's product.

Stocking Allowances

Financial incentives offered to retailers to encourage them to stock and display a product.

Push Money (or Prize Money) Allowances

Financial rewards offered to salespeople to push a particular product or brand to customers.

Trade-In Allowance

A price reduction offered when customers exchange an old product for a new one, typically used for cars or electronics.

Sale Price

A temporary reduction in price, often used to promote specific products during sales events.

Everyday Low Pricing

A pricing strategy where a retailer offers consistently low prices rather than relying on frequent sales or discounts.

Rebates

A partial refund provided to customers after they have purchased a product, typically after submitting proof of purchase.

Mobile Payments

Payments made using a mobile device, such as smartphones, via apps or contactless systems.

Lease

A contractual arrangement where a customer rents a product for a specified period, typically with the option to purchase at the end.

Value Pricing

A pricing strategy that sets a price based on the perceived value of the product to the customer rather than its cost of production.

Unfair Trade Practice Acts

Laws that prohibit businesses from engaging in unethical pricing strategies, such as predatory pricing or price fixing.

Dumping

The practice of selling a product in a foreign market at a price lower than its cost or lower than the price charged in the domestic market, often considered unfair competition.

Wheeler Lea Amendment

An amendment to the Federal Trade Commission Act that prohibits unfair or deceptive practices in advertising, including deceptive pricing.

Price Fixing

An illegal practice where competing firms agree to set prices at a certain level, rather than letting market forces determine them.

Robinson-Patman Act

A U.S. law that prohibits price discrimination that harms competition, specifically preventing sellers from offering different prices to different buyers without justification.

Price Discrimination

Charging different prices to different customers for the same product or service, which may be illegal if it reduces competition.

Markup

The amount added to the cost of a product to determine its selling price.

Markup (Percent)

The percentage of the cost that is added to the price of a product as markup.

Markup Chain

The series of markups taken by different businesses in the distribution chain, from the manufacturer to the final consumer.

Average-Cost Pricing

A pricing strategy where the price is set based on the average cost of production, including both fixed and variable costs.

Total Fixed Cost

The total cost that does not change with the level of production or sales, such as rent or salaries.

Total Variable Cost

The cost that changes with the level of production, such as raw materials or labor.

Total Cost

The sum of total fixed costs and total variable costs.

Average Cost (Per Unit)

The total cost divided by the number of units produced, often used to determine the cost of producing each unit.

Average Fixed Cost (Per Unit)

The total fixed cost divided by the number of units produced

Average Variable Cost (Per Unit)

The total variable cost divided by the number of units produced

Break-Even Analysis

A calculation used to determine the number of units a business needs to sell at a given price to cover its costs, where total revenue equals total costs.

Break-Even Point (BEP)

The point at which total revenue equals total costs, resulting in neither profit nor loss.

Fixed-Cost (FC) Contribution Per Unit

The portion of the price per unit that contributes to covering fixed costs after variable costs are accounted for.