D373 Marketing in the Digital Era - Set 1 - Part 3

Correct Answer: The added value a brand name confers on a product

Brand equity is the commercial value derived from consumer perception of the brand name, enabling premium pricing, loyalty, and easier acceptance of new products.

Correct Answer: Price skimming

Price skimming introduces a product at a high price to capture value from early adopters willing to pay more, then lowers price over time to reach broader segments.

Correct Answer: Rapid market share gain through a low introductory price

Penetration pricing sets a low initial price to attract customers quickly and build market share, relying on volume and later price increases or economies of scale for profitability.

Correct Answer: The path a product takes from producer to end consumer

A distribution channel is the set of intermediaries and pathways through which a product moves from producer to final consumer, affecting availability, cost, and control.

Correct Answer: Selling directly to end customers without intermediaries

Direct-to-consumer distribution bypasses retailers and wholesalers, letting the producer control the customer relationship, pricing, and data, though it requires fulfillment capability.

Correct Answer: Coordinating all promotional messages for consistency across channels

IMC coordinates advertising, public relations, digital, sales promotion, and personal selling so the brand delivers a consistent, mutually reinforcing message across every touchpoint.

Correct Answer: Building and protecting the organization's reputation with stakeholders

Public relations manages communication and relationships with publics such as media, communities, and customers to build a favorable reputation and manage issues or crises.

Correct Answer: Customer acquisition cost (CAC)

Customer acquisition cost divides total sales and marketing spend by the number of new customers acquired, indicating the efficiency of acquisition efforts.

Correct Answer: The total profit expected from a customer over the whole relationship

Customer lifetime value estimates the total profit a customer generates across the entire relationship, guiding how much can profitably be spent to acquire and retain them.

Correct Answer: It shows whether acquiring customers is profitable over the long run

If customer lifetime value does not comfortably exceed acquisition cost, growth destroys value. The ratio is a core test of a sustainable marketing and business model.