Identify and describe two pricing models pertinent to the social media age.
What will be an ideal response?
ANSWER: The textbook discusses five revenue models relevant to the social media age: freemium, affiliate, subscription, virtual goods, and advertising.
• Freemium Model: Offers a basic service for free, while charging for a premium service with advanced features to paying members. Examples of companies that have used this method include Flickr and LinkedIn.
• Affiliate Model: The business makes money by driving traffic, leads, or sales to another, affiliated company's website.
• Subscription Model: This requires users to pay a fee (generally monthly or yearly) to access a product or service.
• Virtual Goods Model: Users pay for virtual goods, such as upgrades, points, or gifts, on a website or in a game. Virtual goods come in all shapes and sizes. The attraction of virtual goods is that margins are high because goods essentially only cost as much as the bandwidth required to serve them, which is generally almost zero.
• Advertising Model: Advertisements are sold against the traffic of the site. Simply put, the more traffic you have on your site, the more you can charge for ads (additional demographics about your site's visitors, such as age, gender, location, or interests, also affects the amount you can charge advertisers to place ads on your site).
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CFI is an incremental fit index
Indicate whether the statement is true or false
If variable costs cannot be reduced, how much reduction in fixed costs will be needed to achieve the profit target?
Electron Manufacturing is a price-taker. Electron produces large spools of electrical wire in a highly competitive market; thus, the company uses target pricing. The current market price of the electric wire is $780 per unit. The company has $3,200,000 in average assets, and the desired profit is a return of 4% on assets. Assume all products produced are sold. The company provides the following information:
A) $7,128,000
B) $13,000,000
C) $7,000,000
D) $13,128,000
_______ describes the cognitive, affective, and behavioral stages that a customer goes through during the purchasing process
a. Integrated marketing communications (IMC) b. Response hierarchy models c. Market database d. Prospecting plan
Which one of the following statements about empowered organizations and their relationship to political game playing is emphasized in your textbook?
a. Empowered organizations provide new means of control and foster more subversive forms of political game playing b. Empowered organizations make the everyday use of negotiations and games of power more difficult c. Empowered organizations are a myth, and the management/subordinate distinction is as pervasive and strong as ever d. None of the above