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THE SUCCESS OF FREMIUM BUSINESS MODEL: MULTIPLE CASE STUDIES OF INDUSTRY LEADERS

Year 2022, Volume: 23 Issue: 3, 635 - 642, 24.07.2022

E. Başak Tavman

https://doi.org/10.37880/cumuiibf.1063898

Abstract

The freemium business model has been widely used in online markets recently. However, there is a limited perspective on the success of the freemium business model. The purpose of this article is to highlight the key points of being successful in the digital world with the freemium business model. In the study, the main strategies that enable an online organisation to run a successful freemium business model are explained with the canvas business model and the 4V business model framework. In this regard, multiple case studies were conducted on online digital organisations and applications that managed to develop a sustainable freemium model. The study aims to expand the current understanding of the freemium business model, help online companies evaluate whether the freemium business model is suitable for them, and develop strategies to develop and maintain a successful freemium business model. Research findings reveal that differentiated product offerings and growth strategy are the corner stones of the freemium business model. Retaining the current customers and constantly adding new users are important for the sustainability of the freemium business model. Therefore, value propositions must be perceived well by the customer in order to increase customer loyalty.

Keywords

Freemium Freemiumbusiness model Business model canvas

References

  • Amit, R., & Zott, C. (2001). Value creation in e‐business. Strategic Management Journal, 22(6‐7), 493-520.doi: 10.1002/smj.187
  • Anderson, C. (2009), Free: The Future of a Radical Price, Hyperion, New York, NY
  • Andries, P., & Debackere, K. (2007). Adaptation and performance in new businesses: Understanding the moderating effects of independence and industry. Small Business Economics, 29(1–2), 81–99.doi: 10.1007/s11187-005-5640-2
  • Baden-Fuller, C. & Haefliger, S. (2013), “Business models and technological innovation”, Long Range Planning, Vol. 46 No. 6, pp. 419-426. doi: 10.1016/j.lrp.2013.08.023
  • Baxter, P., & Jack, S. (2008). Qualitative Case Study Methodology: Study Design and Implementation for Novice Researchers. The Qualitative Report, 13(4), 544-556.doi: 10.46743/2160-3715/2008.1573
  • BBC. (2014). Uber and Spotify launch car music playlist partnership. Erişim Adresi: https://www.bbc.com/news/technology-30080974 Chesbrough, H. (2010), “Business model innovation: opportunities and barriers”, Long Range Planning, Vol. 43 Nos 2-3, pp. 354-363.doi:10.1016/j.lrp.2009.07.010
  • Dyer Jr, W. G., & Wilkins, A. L. (1991). Better stories, not beter constructs, to generate beter theory: A rejoinder to Eisenhardt. Academy of Management Review, 16(3), 613-619.doi: 10.5465/amr.1991.4279492
  • Eisenhardt, K., M. (1989). Building Theories from Case Study Research. The Academy of Management Review, 14(4), 532-550.doi: 10.2307/258557
  • Gassmann, O., Frankenberger, K. & Csik, M. (2015), The Business Model Navigator: 55 Models that Will RevolutioniseYour Business, Pearson Education, Harlow, UK.
  • Holm, A. B., Günzel, F., & Ulhøi, J. P. (2013). Openness in innovation and business models: Lessons from the newspaper industry. International Journal of Technology Management, 61(3/4), 324-348.doi: 10.1504/IJTM.2013.052674
  • Lee, C., Kumar, V., & Gupta, S. (2015). Designing freemium: Balancing growth and monetization strategies. SSRN, 2767135.doi: 10.2139/ssrn.2767135
  • Niculescu, M. F. & Wu, D. J. (2014), “Economics of free under perpetual licensing: Implications for the software industry”, Information SystemsResearch, Vol. 25 No.1, pp. 173-199.doi: 10.1287/isre.2013.0508
  • O'Malley, S. (2015), “Free as a business”, SAGE Business Researcher. doi: 10.1177/2374556815621290
  • Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, New Jersey: John Wiley & Sons
  • Patton, M. Q. (2002). Qualitative research and evaluation methods (3rd ed.). Thousand Oaks, CA: Sage.
  • Picquendaele, L. D. C. D. (2016). Analysis of an innovative business model: the freemium and its applications.(Doktora tezi). ProQuest Dissertations and Theses veri tabanından erişildi.
  • Seufert, E. B. (2014). Freemium economics: Leveraging analytics and user segmentation to drive revenue. Boston, MA: Morgan Kaufmann.
  • Statisca (2020). Research and development costs of Spotify worldwide from 2013 to 2020. Erişim Adresi: https://www.statista.com/statistics/813751/spotify-research-development-costs/
  • Teece, D. J. (2010), “Business models, business strategy and innovation”, Long Range Planning, Vol. 43 No. 2-3, pp. 172-194.doi: 10.1016/j.lrp.2009.07.003
  • Timmers, P. (1998). Business models for electronic markets. Electronic markets, 8(2), 3-8.doi: 10.1080/10196789800000016
  • Vannoni, M. (2014;2015). What are case studies good for? Nesting comparative case study research in to the lakatosian research program. Cross Cultural Research, 49(4), 331-357.doi: 10.1177/1069397114555844
  • Wagner, T. M., Benlian, A., & Hess, T. (2014). Converting freemium customers from free to premium—the role of the perceived premium fit in the case of music as a service. Electronic Markets, 24(4), 259-268.doi: 10.1007/s12525-014-0168-4
  • Yin, R. K. (2009). Case study research: Design and methods. Thousand Oaks, CA: Sage.

Freemium İş Modelinin Başarısı: Endüstri Liderlerinin Çoklu Vaka Çalışması

Year 2022, Volume: 23 Issue: 3, 635 - 642, 24.07.2022

E. Başak Tavman

https://doi.org/10.37880/cumuiibf.1063898

Abstract

Freemium iş modeli, son zamanlarda çevrimiçi pazarlarda yaygın olarak kullanılmaktadır. Ancak freemium iş modelinin başarısı hakkında kısıtlı bir bakış açısı bulunmaktadır. Bu makalenin amacı, dijital dünyada freemium iş modeli ile başarılı olmanın kilit noktalarını vurgulamaktır. Çalışmada, dijital bir işletmenin başarılı bir freemium iş modeli uygulamasını sağlayan temel stratejileri kanvas iş modeli ve 4V iş modeli çerçevesi ile açıklanmaktadır. Bu doğrultuda, sürdürülebilir bir freemium modeli geliştirmeyi başaran çevrimiçi dijital işletmeler ve uygulamalar üzerinden çoklu vaka çalışmaları gerçekleştirilmiştir. Çalışma, freemium iş modelinin mevcut anlayışını genişletmeyi, çevrimiçi şirketlerin freemium iş modelinin kendileri için uygun olup olmadığını değerlendirmelerine ve başarılı bir freemium iş modeli geliştirmek ve sürdürmek için stratejiler geliştirmelerine yardımcı olmayı hedeflemektedir. Araştırma bulguları, farklılaştırılmış ürün teklifleri ve büyüme stratejisinin freemium iş modelinin temel taşı olduğunu ortaya koymaktadır. Mevcut kullanıcıyı elde tutmak ve sürekli olarak yeni kullanıcıların eklenmesi freemium iş modelinin sürdürülebilir olması açısından önem taşımaktadır. Bu nedenle, müşteri sadakatinin artırılması için değer tekliflerinin müşteri tarafından iyi algılanması gerekmektedir.

Keywords

Freemium Freemium iş modeli Kanvas iş modeli

References

  • Amit, R., & Zott, C. (2001). Value creation in e‐business. Strategic Management Journal, 22(6‐7), 493-520.doi: 10.1002/smj.187
  • Anderson, C. (2009), Free: The Future of a Radical Price, Hyperion, New York, NY
  • Andries, P., & Debackere, K. (2007). Adaptation and performance in new businesses: Understanding the moderating effects of independence and industry. Small Business Economics, 29(1–2), 81–99.doi: 10.1007/s11187-005-5640-2
  • Baden-Fuller, C. & Haefliger, S. (2013), “Business models and technological innovation”, Long Range Planning, Vol. 46 No. 6, pp. 419-426. doi: 10.1016/j.lrp.2013.08.023
  • Baxter, P., & Jack, S. (2008). Qualitative Case Study Methodology: Study Design and Implementation for Novice Researchers. The Qualitative Report, 13(4), 544-556.doi: 10.46743/2160-3715/2008.1573
  • BBC. (2014). Uber and Spotify launch car music playlist partnership. Erişim Adresi: https://www.bbc.com/news/technology-30080974 Chesbrough, H. (2010), “Business model innovation: opportunities and barriers”, Long Range Planning, Vol. 43 Nos 2-3, pp. 354-363.doi:10.1016/j.lrp.2009.07.010
  • Dyer Jr, W. G., & Wilkins, A. L. (1991). Better stories, not beter constructs, to generate beter theory: A rejoinder to Eisenhardt. Academy of Management Review, 16(3), 613-619.doi: 10.5465/amr.1991.4279492
  • Eisenhardt, K., M. (1989). Building Theories from Case Study Research. The Academy of Management Review, 14(4), 532-550.doi: 10.2307/258557
  • Gassmann, O., Frankenberger, K. & Csik, M. (2015), The Business Model Navigator: 55 Models that Will RevolutioniseYour Business, Pearson Education, Harlow, UK.
  • Holm, A. B., Günzel, F., & Ulhøi, J. P. (2013). Openness in innovation and business models: Lessons from the newspaper industry. International Journal of Technology Management, 61(3/4), 324-348.doi: 10.1504/IJTM.2013.052674
  • Lee, C., Kumar, V., & Gupta, S. (2015). Designing freemium: Balancing growth and monetization strategies. SSRN, 2767135.doi: 10.2139/ssrn.2767135
  • Niculescu, M. F. & Wu, D. J. (2014), “Economics of free under perpetual licensing: Implications for the software industry”, Information SystemsResearch, Vol. 25 No.1, pp. 173-199.doi: 10.1287/isre.2013.0508
  • O'Malley, S. (2015), “Free as a business”, SAGE Business Researcher. doi: 10.1177/2374556815621290
  • Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, New Jersey: John Wiley & Sons
  • Patton, M. Q. (2002). Qualitative research and evaluation methods (3rd ed.). Thousand Oaks, CA: Sage.
  • Picquendaele, L. D. C. D. (2016). Analysis of an innovative business model: the freemium and its applications.(Doktora tezi). ProQuest Dissertations and Theses veri tabanından erişildi.
  • Seufert, E. B. (2014). Freemium economics: Leveraging analytics and user segmentation to drive revenue. Boston, MA: Morgan Kaufmann.
  • Statisca (2020). Research and development costs of Spotify worldwide from 2013 to 2020. Erişim Adresi: https://www.statista.com/statistics/813751/spotify-research-development-costs/
  • Teece, D. J. (2010), “Business models, business strategy and innovation”, Long Range Planning, Vol. 43 No. 2-3, pp. 172-194.doi: 10.1016/j.lrp.2009.07.003
  • Timmers, P. (1998). Business models for electronic markets. Electronic markets, 8(2), 3-8.doi: 10.1080/10196789800000016
  • Vannoni, M. (2014;2015). What are case studies good for? Nesting comparative case study research in to the lakatosian research program. Cross Cultural Research, 49(4), 331-357.doi: 10.1177/1069397114555844
  • Wagner, T. M., Benlian, A., & Hess, T. (2014). Converting freemium customers from free to premium—the role of the perceived premium fit in the case of music as a service. Electronic Markets, 24(4), 259-268.doi: 10.1007/s12525-014-0168-4
  • Yin, R. K. (2009). Case study research: Design and methods. Thousand Oaks, CA: Sage.
There are 23 citations in total.

Details

Primary Language Turkish
Subjects Business Administration
Journal Section Makaleler
Authors

E. Başak Tavman 0000-0002-2544-9467

Early Pub Date July 19, 2022
Publication Date July 24, 2022
Submission Date January 27, 2022
Published in Issue Year 2022Volume: 23 Issue: 3

Cite

APA Tavman, E. B. (2022). Freemium İş Modelinin Başarısı: Endüstri Liderlerinin Çoklu Vaka Çalışması. Cumhuriyet Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 23(3), 635-642. https://doi.org/10.37880/cumuiibf.1063898
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