Business Services Marketing 4 — Questions and Answers
Question 1: In digital advertising, what does CPC stand for?
- Cost per conversion
- Cost per click (Correct answer)
- Customer purchase cycle
- Content production cost
Correct answer: Cost per click
CPC (cost per click) is a paid advertising model where advertisers pay each time a user clicks on their ad.
Question 2: Which marketing funnel stage focuses on making potential customers aware that a brand or product exists?
- Consideration
- Conversion
- Loyalty
- Awareness (Correct answer)
Correct answer: Awareness
The awareness stage is the top of the funnel where marketers introduce the brand to prospects who may not know it exists.
Question 3: A business finds that 20% of its customers generate 80% of its revenue. This reflects which principle?
- The law of diminishing returns
- The Pareto Principle (Correct answer)
- The diffusion of innovation curve
- Porter's Five Forces
Correct answer: The Pareto Principle
The Pareto Principle (80/20 rule) states that roughly 80% of effects come from 20% of causes.
Question 4: What is the main goal of a loyalty program in a marketing strategy?
- Attracting brand-new customers through discounts
- Increasing repeat purchases and reducing customer churn (Correct answer)
- Generating earned media coverage
- Improving product development feedback loops
Correct answer: Increasing repeat purchases and reducing customer churn
Loyalty programs incentivize existing customers to keep buying by rewarding repeat purchases, reducing the likelihood they switch to competitors.
Question 5: A marketing team tests two versions of an email subject line by sending each to half the subscriber list. This is called:
- Multivariate testing
- Cohort analysis
- A/B testing (Correct answer)
- Regression testing
Correct answer: A/B testing
A/B testing compares two variants of a single variable to determine which performs better among a split audience.
Question 6: Which of the following best describes 'brand equity'?
- The total advertising budget allocated to a brand
- The book value of a company's trademark on its balance sheet
- The added value a recognized brand name gives to a product beyond its functional benefits (Correct answer)
- The number of SKUs a brand carries in retail stores
Correct answer: The added value a recognized brand name gives to a product beyond its functional benefits
Brand equity is the premium value a well-known brand adds to a product compared to a generic equivalent.
Question 7: A company notices its product sales spike every November and December. This demand pattern is called:
- Trend variation
- Cyclical variation
- Irregular variation
- Seasonal variation (Correct answer)
Correct answer: Seasonal variation
Seasonal variation refers to predictable fluctuations in demand tied to specific times of year, such as holidays.
Business Services Marketing 4
In digital advertising, what does CPC stand for?