Revenue Models and Pricing Strategies

Flashcards covering key concepts from Chapter 10 on revenue models and pricing strategies.

Revenue Model

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

Unit Sale Model

The revenue generated by the number of items sold by a company.

Advertising Revenue Model

The revenue gained through advertising products and services.

Data Revenue Model

The revenue generated by selling high-quality, exclusive information to other parties.

Intermediation Revenue Model

The revenue generated by facilitating exchanges between two parties.

Licensing Revenue Model

The revenue generated by giving permission to use protected intellectual property in exchange for fees.

Franchising Revenue Model

The process whereby an existing business allows another party to trade under its name.

Subscription Revenue Model

The revenue generated by charging customers for continuous access to a product or service.

Professional Revenue Model

The revenue generated by providing professional services on a time and materials contract.

Utility and Usage Revenue Model

The revenue generated by charging customers based on usage of goods or services.

Freemium Revenue Model

The revenue gained by mixing free basic services with premium or upgraded services.

Cost of Goods Sold (COGS)

The value of goods sold when a sale occurs.

Operating Expenses

Administrative, marketing, research, salaries, and other costs incurred during business operations.

Income Statement

A financial report that shows revenue, expenses, and profit for a period of time.

Depreciation

The cost of wear and tear on physical assets.

Amortization

The gradual write-off of the initial cost of an intangible asset.

Competition-led Pricing

A pricing strategy where prices are guided by other businesses selling similar products.

Customer-led Pricing

A pricing strategy determined by directly asking customers about their willingness to pay.

Loss Leader Pricing

Offering a product at below-cost to attract more customers.

Introductory Offer

A pricing method offering a new product for free or at a discounted price to encourage trials.

Skimming Pricing

A high pricing method used for new products with little or no competition.

Psychological Pricing

A pricing method that encourages purchase based on perceived lower prices.

Fair Pricing

Pricing perceived as reasonable by both businesses and customers.

Bundled Pricing

A pricing strategy where multiple goods/services are packaged and sold at a lower rate.

Break-even Point

The level of sales at which total revenues equal total costs.

Target-return Pricing

Setting prices based on desired investment returns.

Enterprise Value

The total value of a company, including equity and debt.

Market Segmentation

The process of dividing a diverse market into smaller segments with shared needs.

Freemium Strategy

Offering free basic services while charging for premium services.

Direct Cross-Subsidies

Using revenue from one product/service to subsidize another.

Multiparty Market

A market that involves multiple types of transactions between different parties.

Key Activities

The most important actions a company must take to operate successfully.

Customer Relationships

The types of relationships a company establishes with its customer segments.

Value Propositions

The collection of products and services that create value for a specific customer segment.

Cost Structure

The types and relative proportions of fixed and variable costs incurred by a company.

Revenue Streams

The various sources from which a business earns money.

Customer Segments

The different groups of people or organizations a business aims to reach and serve.

Channels

The means by which a company delivers value propositions to its customer segments.

Key Partners

The network of suppliers and partners that make the business model work.

Desirability

The degree to which customers want a product or service.

Feasibility

The capability of a business model to be executed successfully.

Viability

The capacity of a business to generate sustainable profits.

Adaptability

The ability of a business to adjust its operations and strategies in response to market changes.

Competitive Advantage

Attributes that allow a company to outperform its competitors.

Market Entry Strategies

Plans for how a company will enter a new market.

Sales Forecasting

Estimating future sales revenue based on historical data and market analysis.

Brand Loyalty

The tendency of consumers to continue buying the same brand over time.

Market Research

The process of gathering, analyzing, and interpreting information about a market.

Product Life Cycle

The stages a product goes through from introduction to decline.

Promotional Pricing

Temporary pricing tactic aimed at increasing awareness and sales.

Value Creation

The process of generating value for customers, enhancing their experience.

Consumer Behavior

The study of individuals' buying habits, preferences, and motivations.

Customer Acquisition Cost

The cost associated with convincing a customer to buy a product or service.

Customer Lifetime Value

The total revenue a business can expect from a single customer account over time.

Margin Analysis

Examining the profitability of specific products or services.

Unit Economics

The direct revenues and costs associated with a particular business model.

Operating Margin

A profitability measure calculated as operating income divided by revenue.

Pricing Tiers

Different levels of pricing for different versions of a product or service.

Online Revenue Models

Specific revenue models that leverage the internet for generating sales.

Value Innovators

Companies that create new value propositions to capture interest in their products.

Digital Transformation

The integration of digital technology into all areas of a business.

E-commerce

Buying and selling of goods and services through the internet.

Customer Experience

The overall perception a customer has of a brand based on their interactions.

Revenue Leakage

The loss of revenue that should have been earned due to inefficiencies or errors.

Competitive Pricing

Setting prices based on competitors' strategies and prices.

User Experience

The overall experience a user has when interacting with a product or service.

Conversion Rate

The percentage of visitors to a website that complete a desired action.

Demand Generation

Marketing efforts aimed at creating demand for a product or service.

Sales Funnel

The buyer's journey from awareness to purchase.

Strategic Partnerships

Collaborations with other businesses to gain mutual benefits.

Value Networks

The series of partnerships and relationships through which resources are exchanged.

Business Risks

Potential challenges or losses that a business might encounter.

Market Dynamics

The forces that impact the supply and demand of products in a market.

Pricing Pressure

Influences that force a business to lower its prices.

Cost Structure Analysis

Examination of a business's expenses to determine profitability.

Pricing Models

Different strategies or methods used to set prices.

Bookkeeping

The recording of financial transactions to maintain accurate financial records.

Financial Forecasting

Predicting future financial results based on historical data.

Business Profitability

The capability of a business to generate profits over time.

Return on Investment (ROI)

A performance metric used to evaluate the efficiency of an investment.

Niche Market

A specific, defined segment of the market that is addressed by a specific kind of product.

Sales Strategy

A plan to sell a product or service which may include various tactics.

Merchandising

The activity of promoting goods for retail sales.

Customer Satisfaction

A measure of how products or services meet or surpass customer expectations.

Feedback Loops

Systems for gathering information about how products are received and used.

A/B Testing

A method of comparing two versions of a webpage or product to determine which performs better.

Social Proof

The influence that the actions of others have on an individual's behavior.

Product Differentiation

The process of distinguishing a product from others in the market.

Performance Metrics

Standardized measures that evaluate the efficiency and success of an activity.

Brand Equity

The value added to a product with a recognizable brand name.

Intellectual Property

Creations of the mind, such as inventions and artistic works, that are legally protected.

Market Viability

The ability of a market to support a product or service based on demand.

Sales Generation

The process of creating sales through various marketing and sales tactics.

Ecosystem Partnerships

Collaborations that focus on creating value across related businesses.

Effective Communication

Way of conveying information that ensures understanding and engagement.

Market Penetration

The strategy of increasing market share for existing products.

Sustainable Profitability

The ability to maintain profits over the long term.

Product Offering

The collection of goods and services a company provides to its customers.

Customer Retention

The ability to keep existing customers engaged and returning for more.

Sales Enablement

Tools, resources, and strategies that help sales teams close more deals.