Applied Marketing Management Midterm 2

Traditional media

Established, offline mass media channels; one-way communication; difficult to target

Digital media

Online, internet-based channels including social media, SEO, display ads, email marketing, and websites; two-way communication

Alternative media

Non-traditional, unconventional channels such as experiential marketing, product placement, and ambient advertising

Paid media

Media where you pay for placement (e.g., ads)

Owned media

Channels your brand controls (e.g., website, social accounts)

Earned media

Exposure you didn't pay for and don't control (e.g., press coverage, word of mouth)

Reach

Total unique individuals exposed to a campaign over a specified period; measures breadth of audience penetration

Impressions

Total number of times a campaign ad is displayed, regardless of whether it is clicked or interacted with

Frequency

Average number of times individuals within the target audience are exposed to a campaign; formula

Click-Through Rate (CTR)

Percentage of users who click on a campaign message relative to total impressions; formula

Conversion Rate

Percentage of users who take a desired action after interacting with the campaign; formula

CPM (Cost Per Mille)

Cost to deliver 1,000 impressions; used to compare cost-efficiency across media channels; formula

Cost per Acquisition (CPA)

Average cost to acquire a new customer through a campaign; formula

Customer Acquisition Cost (CAC)

Total marketing and sales spend required to acquire one new customer across all efforts; formula

Return on Investment (ROI)

Profit generated per dollar spent, expressed as a percentage; formula

Follower Count

Total followers on a given platform; a baseline measure of audience size

Audience Growth Rate

Percentage increase in followers over time; indicates brand momentum and expanding reach

Engagement Rate

Interactions (likes, comments, shares) divided by audience; measures content resonance

Amplification Rate

Shares divided by followers; measures how actively users spread content

Audience Demographics

Age, gender, location, and interests of followers; used to verify target audience alignment

Social Sentiment

Ratio of positive, neutral, and negative brand mentions; captures consumer perception

Content Quality

Assessment of aesthetics, creativity, and relevance to the target audience

Content Consistency

Regularity and reliability of the influencer's posting schedule

Content Authenticity

How genuine the content feels, including transparency around sponsored posts

CSAT Score

Average satisfaction rating from post-purchase surveys; measures short-term satisfaction

Net Promoter Score (NPS)

Percentage of Promoters minus percentage of Detractors; indicates likelihood to recommend and long-term loyalty

Social Share of Voice (SOV)

Brand mentions divided by total category mentions; measures brand visibility relative to competitors

Brand Partnerships (metric)

Track record of brand collaborations; signals credibility and strategic fit

Sustainability firm strategy steps

(1) Screen sustainability issues, (2) Find solutions and innovate, (3) Segment the market, (4) Position

Life Cycle Assessment (LCA)

Method for analyzing environmental impacts of a product across its entire life, from raw material extraction through disposal

Stages of the product lifecycle (cradle to grave)

Biomass production (forestry/farming) → Manufacturing/processing → Retail and use → End of life → Re-use, recycling, or energy recovery

Carbon footprint

Total greenhouse gas emissions emitted directly or indirectly by an individual, organization, event, or product throughout its lifecycle

Ecological footprint

Comprehensive measure of humanity's demand on Earth's ecosystems; quantifies land and water area required to support a population's consumption patterns

What are the six dimensions of the complete package for sustainable products?

Sourcing, Ingredients, Production & Transportation, Packaging, Disposal, Social Value

Complete package — Sourcing

How and where raw materials are extracted; must be environmentally responsible (e.g., regenerative agriculture) and socially responsible (e.g., fair labor). Examples

Complete package — Ingredients

The physical materials the product is made of; must be non-toxic and low-impact. Examples

Complete package — Production & Transportation

Resources used in manufacturing and shipping; minimize water, energy, waste, and emissions. Examples

Complete package — Packaging

Materials used to contain and ship products; reusable or package-free is ideal. Examples

Complete package — Disposal

End-of-life design; products should be repairable, upgradeable, or recyclable. Examples

Complete package — Social Value

Broader benefit the company creates for society beyond the core product. Examples

Halo effect (sustainability)

When a company excels on one sustainability dimension, consumers assume it performs well on all dimensions — can lead to greenwashing accusations when gaps are discovered

What are the four types of sustainability innovations (by knowledge and application)?

New knowledge + existing application = development/application of alternative technologies; New knowledge + new application = co-evolution of new systems; Existing knowledge + existing application = incremental improvements; Existing knowledge + new application = creation of novel product and service niches

Sustainability innovation — Incremental improvement

Small improvements to reduce resource consumption, waste, or environmental impact using existing knowledge in existing applications

Sustainability innovation — Alternative technology development

Using new knowledge to improve existing applications or solve existing sustainability challenges

Sustainability innovation — Novel product/service niches

Applying existing knowledge to new applications; creating new market categories around sustainability

Sustainability innovation — Co-evolution of new systems

Applying new knowledge to entirely new applications; fundamentally new systems emerge

What are the three strategies for circularity?

Retain Product Ownership (RPO), Product Life Extension (PLE), and Design for Recycling (DFR); choice depends on how easy it is to get the product back and how easy it is to recover value from it

Retain Product Ownership (RPO)

Producer rents or leases rather than sells; retains responsibility for the product at end of use. Examples

Product Life Extension (PLE)

Designing products to last longer; enables markets for refurbished or used products. Examples

Design for Recycling (DFR)

Redesigning products and manufacturing processes to maximize recoverability of materials. Examples

Circularity Matrix — Easy to access, easy to process

Products with existing recycling infrastructure; strategy is incremental DFR. Example

Circularity Matrix — Easy to access, hard to process

Products easy to collect but complex to recycle; strategy is DFR with partnerships. Examples

Circularity Matrix — Hard to access, easy to process

Products difficult to retrieve due to use context; strategy is DFR with infrastructure/partnerships. Example

Circularity Matrix — Hard to access, hard to process

Products difficult to retrieve and complex to process; strategy is PLE + RPO. Examples

What are the four green marketing strategies?

Lean Green, Defensive Green, Shaded Green, Extreme Green; determined by two dimensions

Ginsberg & Bloom — Substantiality

How substantial (large and responsive) is the green consumer segment for this company? Would the business gain or lose significantly based on perceived greenness?

Ginsberg & Bloom — Differentiability

Can the company credibly differentiate itself from competitors on the green dimension, given its resources, capabilities, and competitive context?

Lean Green

Low substantiality of green segments + low differentiability; greenness mostly in product development and manufacturing for cost efficiency; do not publicize. Example

Defensive Green

High substantiality of green segments + low differentiability; mostly quiet PR promotions and temporary initiatives in response to pressure or crisis. Example

Shaded Green

High differentiability + lower emphasis on green marketing; lead with direct consumer benefits, secondary promotion of environmental attributes. Examples

Extreme Green

High substantiality + high differentiability; all aspects of the business are green; often niche markets and specialty channels. Examples

What are the five LOHAS consumer segments?

LOHAS, Naturalites, Drifters, Conventionals, Unconcerneds

LOHAS segment

Active stewards; lifestyle oriented; focused on personal and planetary health; heaviest purchasers of green products; early adopters

Naturalites segment

Motivated primarily by personal health; purchase healthy products that are often secondarily green; income-restricted; secondary target for green CPG brands

Drifters segment

Green followers; new to green; want to be seen as doing their part

Conventionals segment

Practical and rational; motivated by cost savings; eco-benefits are secondary

Unconcerneds segment

Less concerned about environmental issues; deal with day-to-day life; show some eco-behaviors but not motivated by sustainability

What are the four types of sustainability positioning?

Type I (socio-ecological value primary), Type II (equal emphasis on performance, price, and sustainability), Type III (sustainability integral to performance/quality), Type IV (refrain from communicating sustainability benefits)

Sustainability Positioning I

Socio-ecological value is primary; price and performance are secondary. Example

Sustainability Positioning II

Equal emphasis on performance, price, and socio-ecological aspects; challenge is convincing customers the brand delivers on all. Examples

Sustainability Positioning III

Sustainable value is integral to performance and quality; targets LOHAS customers willing to pay premium for quality that includes environmental/social benefits. Examples

Sustainability Positioning IV

Refrain from communicating environmental and social benefits if target market is put off by such claims. Examples

Direct to consumer (DTC) brands

Brands that sell products directly to end consumers without third-party retailers, wholesalers, or other intermediaries; often use social media. Examples

Why did DTC brands become so popular?

Rise of social media (nearly 74% of shoppers find purchase inspiration from social outlets); lower barriers to digital advertising; millennial shift away from traditional media; scalable fulfillment infrastructure (Shopify, Flexe, Stripe)

Struggles of DTC brands

Overcrowding and rising costs on social media; customer acquisition and retention challenges; rapid growth forces move to physical retail; logistics complexity; copycats; narrow niches limit scale

Iron law of distribution

Consumers must be able to learn about, see, buy, and service a product somewhere along the distribution chain; DTC brands initially bypassed this but faced market limitations as they scaled

New digital buyer's journey

Non-linear journey with pre- and post-purchase loops; customers move back and forth between awareness, consideration, purchase, and loyalty stages

Attractive endorser

Persuades through identification — receiver wants to be like the source and adopts similar beliefs; image-driven; persuasion is fragile and depends on continued source support

Credible endorser

Persuades through internalization — receiver adopts the opinion because they believe the information is accurate; evidence/expertise-driven; persuasion is more durable

Four building blocks of a successful DTC celebrity brand

(1) Deeply engaged social media following, (2) genuine fit between celebrity and product, (3) superior product, (4) strong two-way engagement with fans and followers

Onsite Behavioral Analytics (DTC KPI)

Data on how users interact with the website — pages viewed, time spent, navigation paths; reveals engagement and friction points

Onsite Search (DTC KPI)

What customers search for on the website; indicates intent, unmet demand, and product discovery gaps

Automated pricing

Uses algorithms and AI to set, adjust, and optimize prices without manual human intervention, responding to real-time data on demand, competition, inventory, and customer behavior

Automated pricing continuum

Rule-based → Optimization algorithms → Reinforcement learning; increasing levels of AI autonomy and complexity

Rule-based pricing

If/then pre-set pricing rules. Example

Optimization algorithm pricing

Mathematical models that find profit-maximizing prices from historical data. Example

Reinforcement learning pricing

AI that learns from outcomes and continuously updates pricing. Example

Dynamic pricing

Adjusting prices in real time based on supply and demand. Examples

Personalized pricing

Charging different customers different prices based on individual characteristics. Examples

Price experimentation

Running continuous experiments to find the profit-maximizing price; "earn while you learn"; especially useful for new products with no historical data. Example

What are the four strategic risks of AI pricing?

(1) Customer backlash, (2) Training customers to hunt for deals, (3) Algorithmic bias, (4) Algorithmic collusion

Drip pricing

Additional charges revealed to consumers after they have committed to purchase or shown intent; true total price is disclosed gradually. Examples

Tiered pricing

Strategy where a product or service is offered at multiple price points, each bundling different features, allowing customers to self-select the value level that suits them. Example

Agentic commerce

AI agents make purchasing decisions and execute transactions on behalf of consumers; includes autonomous replenishment, price-optimizing purchasing, and negotiating agents

Strategic implications of agentic commerce

Brand loyalty weakens as agents optimize for price/specs; pre-purchase discovery loop is bypassed; firms must tailor content for agent-readable data and structure pricing for machine-to-machine negotiation