Marketing and Advertising: Key Concepts for Students

Advertising and public relations is emphasized to build awareness in which stage?

Early

During maturity, awareness levels are ____, but competition is ____.

High, More Intense

In the late introduction, growth, and early maturity stages, marketers shift their focus to ____ the customers.

Persuading

In which stage is advertising likely to start building preference for the brand?

Growth

Which promotional mix element allows more control, but also has lower credibility?

Advertising

Which of the following is not a step in developing an advertisement?

Set the advertising budget

When Microsoft creates an advertisement that promotes Microsoft as a whole, it is using ___ advertising.

Institutional

Intel wants to become associated with the up-and-coming world of eSports. Intel can form this bond most effectively through ____.

Sponsorship

How can a company increase product sale in the short run?

Sales promotions

George is a computer salesperson for Best Buy. Samsung gives George a bonus for every Samsung laptop he sells. In this case, Samsung is rewarding George with ____.

Push money

Which type of market structure has few sellers who provide undifferentiated products?

Oligopoly

Which two types of pricing are typically used when introducing new products?

Price skimming and penetration pricing

Which pricing objective sets prices according to customers' expectations of a fair deal?

Value-based pricing

Which pricing objective is aimed at generating the largest ratio of total revenue to total cost?

Profit ratio pricing

Which of the following statements about price skimming is most likely to be NOT true?

Price skimming is good for repeat purchases

Which of the following is not a proper market structure?

Impure monopoly

Which of the following is not a factor in determining elasticity of demand?

Use of prestige pricing

Personal selling is best used when what type of products are sold?

Complex, high-value, or customized products

Why is personal selling considered expensive?

It involves paid, face-to-face interaction and high labor costs

Personal selling is most effective at what stage of the buying process?

Later stages when customers need reassurance

What is the main goal of relationship selling?

Building long-term customer relationships

How does modern selling differ from old-school selling?

It focuses on customer needs rather than scripted pitches

Old-school selling relied primarily on what?

Canned or scripted sales pitches

Relationship selling treats salespeople as what?

Consultants or advisors

Why is customer retention emphasized in CRM?

Acquiring new customers is more expensive than retaining existing ones

CRM stands for what?

Customer Relationship Management

What is the first step in the CRM process?

Identifying customer relationships

What are customer touch points?

Any interaction between a customer and a company

Examples of CRM touch points include what?

Website visits, emails, social media, and purchases

What is clickstream data?

Data tracking what users click on a website

Why do companies use CRM systems?

To centralize customer data across departments

Data mining in CRM is used to do what?

Identify patterns and trends in customer behavior

Cross-selling refers to what?

Selling related products to existing customers

Upselling refers to what?

Encouraging customers to buy premium versions

What is the first step of the personal selling process?

Generating leads

What is prospecting?

Identifying potential customers

Qualifying leads helps salespeople do what?

Focus on customers with need, budget, and willingness

Which step involves asking open-ended questions?

Approaching and probing customer needs

Handling objections is an opportunity to do what?

Clarify and reinforce value

What is the purpose of closing the sale?

Finalize the transaction

Why is follow-up important in selling?

To ensure satisfaction and encourage repeat business

Sales quotas are used to do what?

Measure salesperson performance

Sales force structure can be organized by what?

Geography, product, or customer type

Why is sales training important?

To improve skills, product knowledge, and performance

Sales compensation typically includes what?

Salary, commission, and bonuses

Evaluating salespeople helps managers do what?

Identify strengths and coaching needs

What is the defining feature of social media?

User-generated content

Social media transformed marketing by enabling what?

Two-way communication

What does "marketers no longer control the message" mean?

Consumers shape brand conversations

What is the privacy paradox?

Users worry about privacy but do little to protect it

Paid media refers to what?

Media exposure a company pays for

Owned media refers to what?

Media content controlled by the brand

Earned media refers to what?

Free publicity from user engagement

Influencer marketing is effective because it is perceived as what?

Authentic

A disadvantage of influencer marketing is what?

Loss of message control

Content marketing focuses on doing what?

Providing value beyond selling

Social listening helps marketers do what?

Monitor brand sentiment and feedback

Sentiment analysis measures what?

Positive vs. negative tone

Share of voice measures what?

Brand mentions relative to competitors

Which metric tracks likes, comments, and shares?

Engagement

Which metric tracks visibility of content?

Reach

Which metric tracks actions taken after interaction?

Conversion

CTR stands for what?

Click-through rate

Retention metrics measure what?

Customer loyalty and advocacy

SEO aims to do what?

Improve organic search rankings

SEM involves what?

Paying for search engine placement

Good social media activity improves SEO by doing what?

Increasing traffic and backlinks

Microtargeting refers to what?

Ads aimed at narrow audience segments

Undisclosed influencer advertising is problematic because it is what?

Deceptive

Algorithmic manipulation refers to what?

Platforms using algorithms to maximize engagement

The "infinite feed" is designed to do what?

Keep users scrolling

Excessive social media use is linked to what mental health issues?

Anxiety, FOMO, and social comparison

What does RFM stand for?

Recency, Frequency, Monetary value

What does Recency measure in the RFM model?

How recently a customer made a purchase

Why are customers with high recency more valuable?

They are more likely to purchase again soon

What does Frequency measure in the RFM model?

How often a customer makes purchases

What does Monetary value measure in RFM?

How much money a customer spends over time

What core assumption makes the RFM model effective?

Past behavior predicts future behavior

Why is RFM considered easy to implement?

It relies on existing transaction data and is simple to interpret

Which RFM profile describes a "top customer"?

High recency, high frequency, high monetary value

How should firms typically treat customers with high R, F, and M?

Offer loyalty rewards, early access, or premium perks

What does low recency but high frequency and monetary value indicate?

An at-risk but important customer

What is the recommended action for at-risk high-value customers?

Win-back campaigns or targeted re-engagement offers

Which customers receive the least marketing investment under RFM?

Low recency, low frequency, low monetary customers

What is Customer Lifetime Value (CLV)?

The total value a firm expects to earn from a customer over their entire relationship

Is CLV backward-looking or forward-looking?

Forward-looking

How does CLV differ from RFM?

RFM analyzes past behavior, CLV predicts future value

Why is CLV important for customer acquisition decisions?

It helps determine how much a firm should spend to acquire a customer

Why might a firm invest heavily in retaining a high-CLV customer?

Because the long-term returns justify the retention cost

Why are low-CLV customers usually not targeted with expensive retention strategies?

They do not generate enough future value to justify the cost

How does CLV influence pricing and product decisions?

It helps guide loyalty programs, subscription tiers, and add-on services

What type of CLV does a long-term subscriber usually have?

High CLV

Why is a customer who cancels quickly considered low CLV?

They generate little long-term revenue

How do RFM and CLV complement each other?

RFM identifies valuable past behavior, CLV estimates future value

What does high recency and frequency often imply about CLV?

It usually predicts a high CLV

How do firms use RFM in retail settings?

To segment shoppers and target promotions

How do streaming services use CLV?

To predict subscriber retention and lifetime revenue

How do nonprofits apply RFM concepts?

To segment donors by donation timing, frequency, and size

What is the main strategic benefit of using RFM and CLV together?

Better allocation of marketing resources and higher profitability