Sources of income and marketing strategies

Classify these businesses according to their main revenue stream (product sales, subscription fee, advertising or brokerage commission): a streaming TV platform, a free online newspaper with ads, an estate agency and a hardware shop.

State the main revenue stream of each business (one-off sale, subscription, rental or licence) and justify it: a gym with a monthly fee, design software paid for with an annual licence, a company that rents vans by the day and a shoe shop.

A music platform has 850 subscribers paying $9,99\ \text{€}$ per month. a) Calculate its monthly revenue. b) If the number of subscribers grows by $10\ \%$ and the price does not change, calculate the new monthly revenue. c) Comment on which lever increases revenue more: gaining more customers or raising the price.

A theatre company relies almost entirely on ticket sales, and a crisis causes attendance to plummet. a) Explain the risk of having a single revenue stream. b) Propose three realistic alternative or complementary revenue streams for this company and evaluate which one you would implement first.

A music festival expects 5 000 attendees with tickets at $40\ \text{€}$, sponsorship worth $80.000\ \text{€}$, an average spend at the bar of $8\ \text{€}$ per person and merchandising sales of $3\ \text{€}$ per person. a) Calculate the weight of each revenue stream over the total. b) Reason what risk depending mostly on tickets involves and propose one measure to diversify.

A recipe app has 100 000 free users and $3\ \%$ premium subscribers who pay $5\ \text{€}$ a month. a) Calculate the monthly revenue from subscriptions. b) Compare two growth levers: raising conversion to $4\ \%$ keeping the price, or raising the price to $6\ \text{€}$ keeping conversion, calculating the revenue in each case. c) Recommend one and justify it.

The marketing mix is summarised by the four Ps: product, price, place and promotion. State which "P" each decision belongs to: choosing the packaging, setting the launch price, selling online only, and purchasing social media adverts.

The figure shows the marketing mix with its components around the business. Identify the missing component, marked with "?", and give an example of a decision for that component for a brand of fresh juices.

Design the complete marketing mix for a backpack brand made from recycled materials aimed at students: define the product (two distinguishing features), the price (with justification), the distribution channel and two promotional actions consistent with the brand.

Identify the pricing strategy each case follows and explain it: a new smartphone that comes out very expensive and gets cheaper over the months; a gym that opens with very low fees to fill up quickly; and a coffee shop that sets prices almost equal to the bar opposite.

A business launches a new soft drink into a market full of similar brands. Explain the difference between a penetration pricing strategy and a price skimming strategy, and reason which one you would choose if the objective is to gain customers quickly.

A new kombucha (fermented tea) brand enters a market where almost nobody knows it and there are few competitors. a) Compare a penetration pricing strategy with a price skimming one for its launch and choose one, justifying it. b) Propose two promotion actions coherent with that choice.

Distinguish between advertising, sales promotion and public relations, and classify these actions: a television advert, a "second unit half price" coupon and sponsoring the neighbourhood football team.

A farmer can sell his oranges directly at the market or to a wholesaler who then distributes them to shops. Explain the difference between a short and a long distribution channel and one advantage of each for the farmer.

A pizzeria sells 500 pizzas a month at $12\ \text{€}$, with a cost of $5\ \text{€}$ per pizza. It is considering an advertising campaign of $800\ \text{€}$ a month which, it estimates, will increase sales by $20\ \%$. a) Calculate the revenue before and after the campaign. b) Calculate the additional margin the extra pizzas provide and reason whether the campaign pays for itself in one month. c) Comment on what longer-term effects could change your conclusion.

A home décor SME has $1.000\ \text{€}$ a month for promotion and is undecided between social media adverts and advertising in a local magazine. Compare both options in terms of audience targeting, results measurement and reach, and recommend how to split the budget.