BUSINESS

MODELS
TABLE OF CONTENTS

E-commerce Freemium

Bricks and Clicks Nickel and Dime

Subscription
 What is a Business Model?

A business model is essentially the blueprint or framework that

outlines how a company creates, delivers, and captures value. It
encompasses the strategies and processes a business uses to
generate revenue and sustain itself over time.
E-COMMERCE
The e-commerce model encompasses the buying
and selling of goods or services over the internet. Its
nature is characterized by digital transactions
conducted electronically, typically through online
platforms such as websites or mobile apps.
 DEFINITION
E-commerce, short for electronic commerce, refers to
commercial transactions conducted electronically over the
internet. It involves the exchange of goods, services, or
information between buyers and sellers, facilitated through
online platforms. E-commerce eliminates geographical barriers,
enabling businesses to reach a global audience and operate
24/7.
 NATURE
DIGITAL TRANSACTION
E-commerce transactions are conducted digitally, without the need for physical presence
or paper-based documentation. Customers browse products, place orders, and make
payments online.

GLOBAL REACH

E-commerce transactions are conducted digitally, without the need for physical presence
or paper-based documentation. Customers browse products, place orders, and make
payments online.
 NATURE
CONVENIENCE
E-commerce offers convenience for both businesses and customers. Businesses can
operate with lower overhead costs compared to brick-and-mortar stores, while customers
enjoy the convenience of shopping anytime, anywhere, from any device.

PERSONALIZATION

E-commerce platforms leverage data analytics to personalize the shopping experience for
customers. This includes targeted product recommendations, personalized offers, and
tailored marketing messages based on individual preferences and behavior.
 NATURE
INTEGRATION
E-commerce integrates various aspects of business operations, including marketing, sales,
inventory management, payment processing, and customer service, into a cohesive online
ecosystem.
 TYPES
Business-to-Consumer (B2C)
In B2C e-commerce, businesses sell products or services directly to individual consumers.
This is the most common form of e-commerce and includes online retailers, such as
Amazon, Walmart, and various specialty shops.

Business-to-Business (B2B)
B2B e-commerce involves transactions between businesses, where one business sells
products or services to another for use in their operations or resale. Examples include
manufacturers selling to wholesalers or businesses purchasing software or supplies from
vendors.
 TYPES
Consumer-to-Consumer (C2C)
C2C e-commerce enables individuals to buy and sell products or services directly to other
consumers. Online auction sites like eBay and classified ad platforms such as Craigslist are
examples of C2C e-commerce platforms.

Consumer-to-Business (C2B)
C2B e-commerce occurs when individuals offer products or services to businesses. This can
include freelance work, influencer marketing, or individuals licensing their creative content
to companies.
 TYPES
Business-to-Government (B2G)
B2G e-commerce involves businesses selling products or services to government agencies
or organizations. This could include government procurement processes for goods or
services needed for public projects or services.

Government-to-Business (G2B)
G2B e-commerce refers to government agencies or organizations selling products or
services to businesses. For example, government agencies might sell surplus equipment or
offer licenses and permits online.
 TYPES
Mobile Commerce (M-commerce)

M-commerce involves conducting e-commerce transactions using mobile devices such as

smartphones or tablets. This can include mobile shopping apps, mobile banking, mobile
payments, and location-based services.

Social Commerce
Social commerce integrates social media platforms with e-commerce, allowing users to
discover, share, and purchase products directly within their social network. Examples
include Instagram Shops, Facebook Marketplace, and Pinterest Buyable Pins.
 EXAMPLES
Business-to-Consumer (B2C)
Lazada Philippines
Lazada is one of the largest online marketplaces in the Philippines, offering a wide range of products
such as electronics, fashion, home appliances, and more directly to individual consumers. Customers
can shop on the Lazada website or mobile app and have items delivered to their doorstep.

Business-to-Business (B2B)

Alibaba
Alibaba is a leading e-commerce platform that connects businesses worldwide, allowing
manufacturers, wholesalers, and suppliers to sell products in bulk to other businesses. Alibaba's
platform facilitates B2B transactions across various industries, including manufacturing,
wholesale trade, and supply chain management.
 EXAMPLES
Consumer-to-Consumer (C2C)

Carousell Philippines
Carousell is a popular online marketplace and classifieds platform in the Philippines, where
individuals can buy and sell secondhand goods directly to other consumers. Users can list items for
sale, negotiate prices, and arrange meetups or deliveries for transactions.

Consumer-to-Business (C2B)

Freelancer.com
Freelancer.com is a freelancing platform where individuals in the Philippines can offer their skills
and services to businesses worldwide. Freelancers create profiles, bid on projects posted by
businesses, and collaborate on various projects, including web development, graphic design,
writing, and more.
 EXAMPLES
Business-to-Government (B2G)
Philippine Government Electronic Procurement System (PhilGEPS)
PhilGEPS is an online portal operated by the Philippine government for government procurement
processes. Businesses in the Philippines can register on PhilGEPS to participate in government
bidding opportunities, supply goods, and services to government agencies.

Government-to-Business (G2B)
Bureau of Internal Revenue (BIR) e-Filing System
The BIR e-Filing System allows businesses in the Philippines to file their taxes online. Through the
system, businesses can submit tax returns, pay taxes, and access tax-related information,
streamlining tax compliance processes and reducing paperwork.
 EXAMPLES
Mobile Commerce (M-commerce)
GCASH
GCash is a mobile wallet and payment app widely used in the Philippines. Customers can use the
GCash app to pay bills, transfer money, buy load, shop online, and even invest in financial
products directly from their smartphones, offering convenience and accessibility.

Social Commerce

Facebook Marketplace
Facebook Marketplace is a feature within the Facebook app that allows individuals and
businesses in the Philippines to buy and sell products locally. Users can browse listings, message
sellers, and arrange transactions within their local communities, leveraging social media for e-
commerce transactions.
 BENEFITS
Global Reach

E-commerce allows businesses to reach customers beyond their local geographic area,
enabling access to a global market. This expanded reach can lead to increased sales
opportunities and revenue growth.

Lower overheads

Compared to traditional brick-and-mortar stores, e-commerce businesses often have lower

overhead costs. They typically don't require physical storefronts, which means savings on rent,
utilities, and other expenses associated with maintaining a physical presence.
 BENEFITS
24/7 Availability

E-commerce stores can operate around the clock, providing customers with the convenience
of shopping whenever they want. This flexibility can lead to higher sales volumes as businesses
are not constrained by traditional opening hours.

Cost Effective Marketing

Digital marketing techniques such as social media advertising, search engine optimization (SEO),
and email marketing can be highly targeted and cost-effective compared to traditional
advertising methods. E-commerce businesses can leverage these tools to reach their target
audience and drive traffic to their website.
 BENEFITS
24/7 Availability

E-commerce stores can operate around the clock, providing customers with the convenience
of shopping whenever they want. This flexibility can lead to higher sales volumes as businesses
are not constrained by traditional opening hours.

Increased Customer Insight

E-commerce platforms provide valuable data and analytics tools that allow businesses to track
customer behavior, preferences, and buying patterns. This information can be used to personalize
marketing efforts, improve product offerings, and enhance the overall customer experience.
 BENEFITS
Scalability
E-commerce businesses can easily scale their operations to accommodate growth without the
need for significant infrastructure investments. Whether it's increasing product offerings,
expanding into new markets, or handling higher order volumes, e-commerce platforms are
designed to be flexible and scalable.

Convenience to Customers

E-commerce offers unparalleled convenience for customers, allowing them to browse and
purchase products from the comfort of their own homes or on the go via mobile devices.
Additionally, features such as saved payment information and personalized recommendations
enhance the shopping experience.
 BENEFITS
Reduced Time to Market

E-commerce enables businesses to bring new products to market more quickly compared to
traditional retail channels. This agility allows businesses to respond rapidly to changing
consumer trends and competitive pressures.
Bricks & Clicks
The bricks-and-clicks model allows businesses to
adapt to changing consumer preferences and
behaviors by offering a hybrid shopping experience
that combines the best of both physical and online
retail environments.
 DEFINITION
"Bricks and clicks" is a business model that combines traditional
physical ("bricks") stores with online ("clicks") operations.

This strategy allows businesses to reach customers through

multiple channels, providing them with both the convenience of
online shopping and the personal experience of in-person
shopping.
 COMPONENTS
Physical Stores (Bricks)
These are traditional stores where customers can visit, browse products, and make
purchases in person. They offer a tangible shopping experience, allowing customers to see,
touch, and try products before buying.

Online Stores (Clicks)

These are online presences, typically in the form of an e-commerce website or platform.
This allows customers to shop remotely, browse products, place orders, and arrange for
delivery or pickup
 NATURE
HYBRID APPROACH
This hybrid approach acknowledges the evolving consumer landscape, where customers
increasingly expect flexibility and convenience in their shopping experiences.

CUSTOMER-CENTRIC

By offering both offline and online channels, businesses cater to diverse customer
preferences.
 NATURE
CHANNEL INTEGRATION
This integration enables features like click-and-collect (buying online and picking up in-
store), omnichannel marketing (consistent messaging across channels), and unified
customer data (tracking purchases and interactions across platforms).

DATA-DRIVEN INSIGHTS

By analyzing customer behavior, preferences, and purchase patterns across channels,

companies can tailor their offerings, marketing strategies, and operations to better meet
customer needs.
 BENEFITS
Increased Reach and Accessibility
Bricks and clicks allow businesses to reach a wider audience by catering to customers who
prefer both online and offline shopping.

Flexibility for Customers

They can choose between shopping in physical stores for a hands-on experience or
browsing and purchasing online from anywhere at any time, offering convenience that fits
their lifestyle.
 BENEFITS
Optimized Inventory Management
Bricks-and-clicks businesses can optimize inventory management by leveraging data
analytics to track product demand and preferences across channels. This enables
businesses to maintain optimal stock levels, reduce excess inventory, and offer a wider
range of products to customers.

Competitive Advantage

By offering a hybrid shopping experience that combines the convenience of online

shopping with the personal touch of physical stores, businesses can differentiate
themselves from competitors and attract and retain customers.
EXAMPLES
Nickel and Dime

Nickel and Dime business model is about driving the

cost of a product down to its lowest point while still
making a profit.
 NATURE
How does it work?

Companies divide their products or services, they charge a lower

price for each item. The customers also benefit from the lower
prices, only buying goods or services they need instead of all of
them.
 NATURE
Small Amounts
The nature of "nickel and dime" revolves around small
denominations of currency, specifically the nickel (5 cents) and
dime (10 cents) coins in the United States. These coins represent low
monetary values, and the phrase is often used to describe
transactions or expenses involving relatively small sums of money.

Incremental Costs

The term can also describe a method of charging small fees or

costs that, individually, may seem inconsequential but can add up
over time.
 NATURE
Perceived Lack of Value

The nature of "nickel and dime" can carry a negative connotation,

implying that someone is being charged for items or services that
they consider trivial or of little value.

Perceivedto
Attention Lack
Detail
of Value
The phrase can also imply attention to detail or meticulousness in
financial matters.
 EXAMPLES
1. Airlines
A budget airline that charges the lowest possible price for the flight tickets and charges fee
over additional services like printed boarding pass fees, carry-on/ check-in luggage, Wi-Fi,
beverage, meal/snack, phone booking fees, etc.
Example: Cebu Pacific, AirAsia

2. Telecommunication Company
Offer competitive pricing on basic services while monetizing additional features or usage
beyond the basic package. This allows telecom companies to attract customers with
seemingly affordable plans, while generating additional revenue from add-ons, data
overages, international calls, and various fees.
Example: PLDT, Globe
 EXAMPLES
1. Banks
Increase revenue through various fees and charges. While they may offer basic
services like checking or savings accounts with minimal fees, they introduce charges
for services such as overdrafts, ATM usage, wire transfers, and account maintenance.
This approach allows banks to attract customers with seemingly low-cost or free
basic services while monetizing specific transactions or additional features.
Example: BPI, Metro Bank
 FREEMIUM
Freemium is a business model in which companies
offer users the most basic version of a product for
free, while encouraging them to upgrade to a paid
premium version that comes with additional,
advanced features.
 DEFINITION
A combination of the words "free" and "premium," freemium is a
type of business model that offers basic features of a product or
service to users at no cost and charges a premium for
supplemental or advanced features.

A company using a freemium model provides basic services on

a complimentary basis, often in a "free trial" or limited version for
the user, while also offering more advanced services or
additional features at a premium.
 NATURE
How does it work?

The freemium model tends to work well for internet-based

businesses with small customer acquisition costs, but high lifetime
value. It allows users to utilize basic features of a software, game, or
service for free, then charges for "upgrades" to the basic package. It
is a popular tactic for companies just starting out as they try to lure
users to their software or service.
 FREEMIUM
NATURE FREE TRIAL

A free trial, on the other

A freemium approach
hand, gives users the full
offers a stripped down product experience, but it
product with a limited only lets them use the
number of features. product for a limited
amount of time
 EXAMPLES
ZOOM
the meetings on the free plan only work up to 40
minutes. To unlock longer meetings and meetings
that can host more participants users need to sign
up for paid plans, which start at nearly 8,200 a year.

DROPBOX
Dropbox, the pioneering cloud storage provider,
rose to prominence on its freemium pricing model.
The company offers new users 2 gigabytes of free
storage when they sign up, and, once they reach
their limit, it’s easier to pay for more space than to
switch platforms.
 EXAMPLES
CANVA

To unlock additional features like advanced design

tools, premium templates and access to a vast
stock image library users are asked to fork over 299
a month for a Pro plan and can take a discount
when getting a annual plan for
2,490(207.50/month)
 PROS
Companies can easily acquire
potential users and collect their
user information and data
They can make revenue on ads
and boost their own business
numbers to enhance the
application
For startups, it provides a large
amount of brand awareness
without requiring a lot of
customer support.
CONS
Free users never convert to paid
users
Too many features on the free
version may prevent users from
upgrading to a premium version
Users may get tired of a free
version that doesn't offer
additional bells and whistles
How to Convert a Free User to a Paid User?
?
Limit the features offered to free users, so that they will be
enticed to upgrade for a better experience.

As free users increasingly use the product or service, offer

increased storage, more flexibility or time allowed on the app,
and customizations.

Offer additional personalized or customer service associated

with an account.
SUBSCRIPTION
A subscription business model is a recurring revenue
model in which customers pay a weekly, monthly, or
yearly fee in exchange for your products or services.
Customers can renew their subscription after a
certain period of time.
 NATURE
How does it work?

Customers are charged on a recurring basis for a product or service. They choose how long
and how often they want to receive each offer, and most subscriptions provide the option to
renew or cancel at any time.
 NATURE
Predictable Revenue Stream
Once you've been operating long enough to collect data, the number of customers you gain
and lose in a given time frame will be more predictable, making it easier to judge what your
income will look like from one month to the next.

Recurring revenue

Built on establishing long-term relationships with customers who will pay regularly for
access to the product or service
 NATURE
Reduced Acquisition Costs
The cultivation of customer relationships reduces the need for costly customer acquisition
efforts.

Opportunities for upselling/cross-selling

It's much more practical, to offer a wider range of options for subscription-based services.
Because they can move between plans readily, customers are more likely to try out a higher
tier.
 EXAMPLES
1. Streaming Services
Grants you access to things like movies, television, and music, for a monthly price. The benefit of
this model is that consumers can access all of the entertainment content they need whenever and
wherever they want.
Example: Netflix, Spotify

2. Software as a Service
Customers are charged an annual or monthly fee in exchange for access to the latest edition of
the software with real-time updates, bug fixes and customer support.
Example: Google Workspace, Adobe
 EXAMPLES
3. Content Subscriptions
Once the customer pays, he or she has full access to all previously uploaded books, courses, articles,
statistics and games and is sent notifications of new content as it is made. Content subscription
business models typically offer a limited version for free, such as sample chapters of books, a limited
number of free articles or the abstract (but not full text) of academic papers.
Example: E-books, sheet music, courses, games

4. “Perks” Subscription
Some businesses make money from subscriptions that give members exclusive access to insider
discounts and faster service. The kinds of benefits to which members are given access might
include: Free shipping, member-only discounts, and priority service.
Example: Amazon Prime
THANK
YOU!