12-13 Flashcards
Q: What are internal and external reference prices?
A: Internal = what a consumer thinks they should pay. External = what others are paying for the product.
Q: How do substitutes affect pricing?
A: More substitutes mean consumers are more price-sensitive.
Q: How do marketing efforts impact perceived value?
A: Marketing can enhance perceived benefits, increasing willingness to pay.
Q: How do you calculate unit contribution and total contribution?
A: Unit Contribution = Unit Price - Unit VC. Total Contribution = Unit Contribution × Units Sold.
Q: What is the formula for Break-Even Volume (BEV)?
A: BEV = Fixed Cost / (Price - Unit VC).
Q: What are the four pricing approaches?
A: Cost-plus, Competitive, Value-based, Golden Goose.
Q: What are risks of lowering or raising prices?
A: Lowering too much can hurt brand value; raising may reduce volume or require shrinking product size.
Q: What are the 3 advertising objectives?
A: Cognitive (awareness), Affective (interest), Behavioral (action).
Q: What is a creative brief?
A: A document outlining brand legacy, target, benefit, tone, and strategy for an ad campaign.
Q: What is CPM?
A: Cost per thousand impressions. Measures ad cost per 1,000 people reached.
Q: What is GRP?
A: Gross Rating Point = Reach × Frequency.
Q: What is content marketing?
A: Marketing via owned/earned media that attracts rather than interrupts.
Q: What are two types of sales promotions?
A: Value-added (build loyalty) and price promotions (temporary boosts in sales).
Q: What is direct marketing?
A: Direct interaction with consumers to trigger a response (e.g., mail, telemarketing).
Q: What is Integrated Marketing Communication (IMC)?
A: Coordinating all promotional tools for a unified message across channels.
Q: What are the 4 Cs of IMC (vs. 4 Ps)?
A: Cost, Convenience, Communication, Consumer.
