Question

E Price  
a) Identify the price point ranges for each product type for business to consumer and for business to business.
Create a table to summarize the products (services) and the price points.
It could be bronze, silver, gold or small, medium, and large etc for different product types coffee, tea, brownies etc or TV's, phones etc. If the service is free to consumers explain why? How does the company make money? What is the price they charge to businesses for the different services? Discuss if some services are provided free to consumers and if the service can be upgraded for a fee that might suggest a Good, Better, Best pricing strategy.

b) Discuss why or why not you feel their strategy is penetration pricing or skimming.  
c) Discuss if they segmented the market by price or some other segmentation approach.
d) What is the annual revenue for Facebook inc?

Answer 1

E Price is the price that can be directly offered to the consumer over the Internet. E Price is generally lower than the listed price comparatively. Price Point really depends on the demand & supply of a product. Thus in B2C, it saves time & money since there are no middlemen whereas a product go through multiple hands in B2B thus the price of such a product would be higher.

The term business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.

• Business-to-consumer refers to the process of businesses selling products and services directly to consumers, with no middleman.
• B2C is typically used to refer to online retailers who sell products and services to consumers through the Internet.
• Online B2C became a threat to traditional retailers, who profited from adding a markup to the price.
• However, companies like Amazon, eBay, and Priceline have thrived, ultimately becoming industry disruptors.

Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to a business that is conducted between companies, rather than between a company and an individual consumer.

• Business-to-business (B2B) is a transaction or business conducted between one business and another, such as a wholesaler and retailer.
• B2B transactions tend to happen in the supply chain, where one company will purchase raw materials from another to be used in the manufacturing process.
• In this case, sometimes a person buys a product from other companies thus it is termed as B2B.

Here I have mentioned the example of an Apple Watch which is an Apple product. The service is free since Apple is a big brand, wants to provide convenience to consumers & as it is costly so apple can easily provide service.

Apple products and services include iPhone, iPad, Mac, iPod, Apple Watch, Apple TV, a portfolio of consumer and professional software applications, iCloud, Apple Music, Apple Pay and a variety of accessory, service and support offerings. Apple generates revenues from product sales, subscription fees associated with iCloud and Apple Music, and extended warranty fees for its products. Apple also generates revenues from the fees charged to content owners and developers for selling their digital content and applications through the iTunes Store, App Store, Mac App Store, iBooks Store, and Apple TV App Store. There are various ways through which the company makes money.

Apple’s focus is shifting. In recent years, iPhone sales have begun to plateau, and now Apple’s services business — which encompasses everything from the App Store to licensing deals — is being positioned as its next big frontier for revenue growth. More than ever, Apple wants to sell people constant, ongoing subscriptions for things they can do on their phones.

Apple’s services business brought in over $10.9 billion during the most recent quarter, setting records in “every geographic segment” in the process, according to Apple CEO Tim Cook. Cook also said that Apple is on track to double its services business from 2016 to 2020. Last quarter saw a 19 percent increase year over year.

Apple provides free services like Maps, Siri and parts of an iCloud & it generally considers it to be in the cost of its devices. Their pricing strategy is good for an Apple Company.

Apple Company follows skimming pricing because it offers its products at high prices to maximize its profits for early adopters of a new product, then gradually lowering the price to attract thriftier consumers. The Apple ecosystem is very huge & it comprises a lot of products like phones & watches, etc. Apple Inc understands the market segmentation thus there are different market segments that operates. The market segmentation of apple includes demographical bases, geographical, behavior and psychographic bases. The demographic market segmentation of apple is successful in that the company develops products based on lifecycle, age, occupation of consumers.

Facebook's annual revenue from 2009 to 2019 (in million U.S. dollars)

	Revenue in million U.S. dollars
2018	55,838
2017	40,653
2016	27,638
2015	17,928