AMA PCM Marketing Management flashcards
AMA PCM Marketing Management · Build recall with a focused review session.
31 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Customer lifetime value
- The discounted net profit expected from a customer over the whole relationship, calculated from purchase value, frequency, retention duration, and margin, minus acquisition cost.
- Unit contribution margin
- Unit price minus unit variable cost. It is the amount each sale contributes to covering fixed costs and then generating profit.
- Break-even volume
- Fixed costs divided by unit contribution margin. It is the sales quantity at which total revenue equals total cost and profit is zero.
- Price elasticity of demand
- Percent change in quantity demanded divided by percent change in price. Absolute values above one indicate elastic demand, where price cuts raise revenue.
- Relative market share
- A firm's market share divided by the largest competitor's share. Values above one indicate market leadership and are used in BCG portfolio analysis.
- BCG cash cow
- A business unit with high market share in a low-growth market. It generates cash exceeding its investment needs and funds stars and question marks.
- Product life cycle
- The sequence of introduction, growth, maturity, and decline stages a product category passes through, each with distinct pricing, promotion, and competitive conditions.
- Share of wallet
- The proportion of a customer's total category spending captured by one firm. It measures relationship depth and reveals cross-selling opportunity.
- Sampling error
- The discrepancy between a sample statistic and the true population value arising from random sampling. It shrinks as sample size increases, typically with the square root of n.
- Confidence interval
- A range around a sample estimate expected to contain the true population value at a stated confidence level, computed as estimate plus or minus the margin of error.
- Type I error
- Rejecting a null hypothesis that is actually true, a false positive. Its probability equals the chosen significance level alpha, commonly 0.05.
- Type II error
- Failing to reject a null hypothesis that is actually false, a false negative. Its probability is beta, and statistical power equals one minus beta.
- Statistical power
- The probability of correctly detecting a true effect, equal to one minus beta. Conventionally 0.80 or higher and increased by larger samples or larger effects.
- p-value
- The probability of obtaining a result at least as extreme as the observed data, assuming the null hypothesis is true. It is not the probability the null is true.
- Conjoint analysis
- A research technique where respondents choose among product profiles with varied attribute levels, revealing part-worth utilities and the relative importance of each attribute.
- Likert scale
- An ordinal rating scale, typically five or seven points, measuring agreement with a statement. Interval treatment requires justification, especially with small samples.
- Brand equity
- The differential value a brand name adds to a product beyond its functional attributes, reflected in willingness to pay, preference, and resilience to competitive pressure.
- Brand awareness
- The strength of a brand's presence in consumer memory, split into recognition when prompted and recall without prompting. Top-of-mind recall is the strongest unaided level.
- Points of parity
- Associations shared with competitors that represent category table stakes. Meeting them is necessary to be considered a legitimate option by buyers.
- Points of difference
- Associations unique to a brand that are valued by customers and difficult for competitors to copy. They create preference and support premium pricing.
- Brand architecture
- The structure organizing a firm's brands and sub-brands, ranging from a branded house to a house of brands, endorsed brands, and hybrid arrangements.
- Brand extension
- Launching a new product under an existing brand name. Success depends on category similarity and congruence with parent-brand associations to avoid dilution.
- Brand dilution
- Weakening of core brand associations caused by inconsistent messaging or poorly fitting extensions. Line extensions generally carry lower dilution risk than category extensions.
- Royalty relief method
- A brand valuation approach estimating the royalty a firm would pay to license the brand, applied to projected revenue and discounted to present value.
- Click-through rate
- Clicks divided by impressions for a digital ad or link. It measures creative and targeting relevance and feeds into cost-per-click calculations.
- Cost per acquisition
- Total campaign spend divided by the number of conversions attributed to it. It is compared against customer lifetime value to judge campaign profitability.
- Return on ad spend
- Revenue attributed to advertising divided by the ad spend. It is a gross revenue ratio and differs from ROI, which nets all costs.
- Cost per mille
- The cost of one thousand ad impressions, calculated as spend divided by impressions times one thousand. It is the standard display and video buying metric.
- Last-click attribution
- A model crediting the final touchpoint before conversion with full value. It overweights lower-funnel channels such as branded search and underweights upper-funnel awareness media.
- Click-to-open rate
- Unique clicks divided by unique opens in an email campaign. It isolates content relevance from subject-line performance.
- Quality score
- A search advertising metric combining expected click-through rate, ad relevance, and landing page experience. Higher scores can lower cost per click and improve ad rank.