ENTR 421 Review Questions and Correct Answers

Four types of markets Existing, Resegmented Niche, Cost, New revenue model Cash a business generates from each customer segment. value customers are willing to pay. ways they can pay. how does each stream contribute. 1)The type of revenue (such as purchase or rent) 2)The frequency of that revenue (a one-time charge or recurring at certain intervals of time) 3)The price level of that revenue (typically per unit of product or service) relative to competitors 4)The number of distinct streams of revenue (such as different product lines or different services, or services that accompany products, such as paid support services for a computer). Each of these streams of revenue needs to be designed with the three dimensions above; the type of revenue, the frequency of purchase, and the price level relative to competitors. Revenue model examples Microsoft is $400 for licensing Google Apps is free or $50 per user for businesses. Jboss has a $99 annual fee with thousands for technical support Existing Markets customer needs already being served by one or more companies; information may be readily available faster/better = high end Resegmented market Making big changes to products already out there niche = marketing/branding driven cheaper = low end New Markets New areas that are set up to buy or sell goods. cheaper/good enough = creates a new class of product/customer