CH 10: Revenue models

exam 2

Advertising revenue model

generating revenue by selling advertising from products and services

brokers

the people who organize transactions between buyers and sellers

ex: Ebay

Bundel pricing

a pricing strategy whereby companies package a set of goods or services together and then sell the for a lower price than is they were to be sold separately

competition-led pricing

a pricing strategy that matches prices to other businesses selling the same or very similar products and services

COGS

the direct cost of producing a product

cost-led pricing

a pricing strategy that involves calculating all the cost of manufacturing or delivering the product or service, plus all other expenses, and adding an expected profit or margin by predicting you sales volume to get the approximate price

customer-led pricing

a pricing strategy that ask customer how much theyre willing to pay and then offers the product at that price

data revenue model

generating revenue by selling high quality, exclusive, valuable information to other parties

direct cost-subsidies

pricing a product or service above its market value to pay for the loss giving away a product or service for free or below its market value

fair pricing

the degree to which both businesses and customer believed that the pricing is reasonable

franchising revenue model

earning revenue by selling franchises of an existing business to allow another party to trade under the name of that business

freemium revenue model

mixing free (mainly web-based) basic services with premium or upgraded services

income statement (or profit and loss statement) `

a financial report that shows revenue, expenses,and profit for a period

intermediation revenue model

methods by which third parties such as brokers (or intermediaries) can generate money

introductory offer

a pricing strategy to encourage people to try a new product by offering it for free or at a heavily discounted price

licensing revenue model

earning revenue by giving permission to other parties to use protected intellectual property (patents, copyright, trademarks) in exchange for fees

loss leader

a pricing strategy whereby a business offers a product or service at a lower price in an attempt to attract more customers

operating expenses

the costs of running your business, including rent, utilities, administration, marketing, employee salaries, and so on

professional revenue model

earning revenue by providing professional services on a time and materials contract

psychological pricing

a pricing strategy intended to encourage customers to by on the basis of their belief that the product or service is cheaper than it really is

revenue

the income gained from sales of goods or services

revenue model

a key component of the business model that identifies how the company will earn income and make profits

skimming

a high pricing strategy, generally used for new products or services that face very little or even no competition

subscription revenue model

charging customers to gain continuous access to a product or service

target-return pricing

a pricing method whereby the price is based on the amount of investment you have put into your business

unit sales revenue model

generating revenue by the number of items (units) sold by a company

utility and usage revenue model

a pay as you go model that charges customers fees on the basis of how often goods or services are used

value-based pricing

a pricing method that involves pricing a product based on how it benefits the customers