AMA PCM Marketing Management cheat sheet

Customer lifetime value (CLV) = (average purchase value × purchase frequency × retention years) − acquisition cost; a segment is viable when CLV exceeds fully loaded acquisition cost.

Share of wallet = customer spend with the firm ÷ customer's total category spend; it measures depth of relationship rather than breadth of customer count.

Market share = firm sales ÷ total market sales; relative market share = firm share ÷ largest competitor's share, and values above 1.0 signal market leadership.

The 4Ps (product, price, place, promotion) are controllable; the 5Cs (company, customers, competitors, collaborators, context) are the situational frame used to set them.

Price elasticity of demand = % change in quantity demanded ÷ % change in price; |E| > 1 is elastic, so a price cut raises total revenue.

Break-even volume = fixed costs ÷ (unit price − unit variable cost); the denominator is the unit contribution margin.

Market penetration = category buyers who bought the brand ÷ total category buyers; it rises through trial, repeat, and frequency, not just awareness.

The product life cycle stages are introduction, growth, maturity, and decline; profit typically peaks in late growth or early maturity while price competition intensifies.

In the BCG matrix, stars and question marks are high-growth; cash cows fund the portfolio, and dogs are candidates for harvest or divestiture.

Sampling error = z × √(p(1−p)/n); at 95% confidence z ≈ 1.96, so a 50/50 split with n=1,000 yields a margin of error near ±3.1%.

A confidence interval is estimate ± (critical value × standard error); wider intervals result from smaller samples or higher confidence levels.

Type I error is rejecting a true null hypothesis (false positive, equal to alpha); Type II error is failing to reject a false null (false negative, equal to beta).

Statistical power = 1 − beta; power of 0.80 is the conventional minimum, and power rises with larger samples and larger true effects.

Correlation coefficient r ranges from −1 to +1 and measures linear association only; it does not establish causation.

A p-value is the probability of observing data at least as extreme as the sample given the null is true; it is not the probability the null is true.

In conjoint analysis, part-worth utilities are derived from respondent trade-offs across attribute levels; relative attribute importance = attribute's utility range ÷ sum of all ranges.

Likert data are ordinal; treating them as interval is common but requires justification, and medians or nonparametric tests are safer for small samples.

A pretest-posttest design with a control group controls for history and maturation; a single-group pre/post design does not.

Brand equity is the differential value a brand name adds to a product; Keller's model builds it through salience, performance/imagery, judgments/feelings, and resonance.

Brand awareness splits into recognition (aided) and recall (unaided); top-of-mind recall is the first brand named in an unaided category probe.

Perceived quality is a customer judgment that drives willingness to pay and often supports premium pricing independent of objective specifications.

Brand architecture options are house-of-brands, branded house, endorsed brands, and hybrid; each trades brand stretch against focus and dilution risk.

Brand extension fit is judged on category similarity and attribute congruence; poor fit risks diluting parent-brand associations.

Points of parity are category table stakes needed to be considered; points of difference are associations that create preference and are hard to copy.

Brand equity can be valued financially by the price premium method, royalty relief (royalty rate × revenue), or the cost-to-recreate approach.

Brand dilution occurs when extensions or inconsistent messaging weaken core associations; line extensions carry lower dilution risk than category extensions.

Click-through rate (CTR) = clicks ÷ impressions; conversion rate = conversions ÷ clicks; cost per acquisition (CPA) = spend ÷ conversions.

Return on ad spend (ROAS) = revenue ÷ ad spend; it is a gross ratio, distinct from ROI = (revenue − cost) ÷ cost, which nets all costs.

Customer acquisition cost (CAC) = total sales and marketing spend ÷ new customers acquired; a healthy ratio compares CAC to CLV, not to revenue.

Cost per mille (CPM) = (spend ÷ impressions) × 1,000; cost per click (CPC) = spend ÷ clicks, and CPC = CPM ÷ (CTR × 1,000).

Email metrics: open rate = opens ÷ delivered; click-to-open rate = clicks ÷ opens; bounce rate = undeliverable ÷ sent.

Attribution models include last-click, first-click, linear, time-decay, and position-based; last-click overweights lower-funnel search and underweights upper-funnel display.

Search engine results page position and quality score (expected CTR, ad relevance, landing page experience) jointly determine paid search ad rank and cost.

A/B test significance depends on baseline conversion rate, minimum detectable effect, and sample size; peeking at results inflates false-positive rates.

Organic reach on social platforms is limited by engagement-based ranking, so owned, earned, and paid media should be budgeted as a combined mix.