Question Description
Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer?.

Solutions for Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CAT. Download more important topics, notes, lectures and mock test series for CAT Exam by signing up for free.

Here you can find the meaning of Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Directions: Read the following passage to answer the question.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. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there's no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure their premium users can access more upgraded features, such as increased storage or customisations, and additional customer service.Companies build relationships with customers, eventually offering them advanced services, add-ons, enhanced storage or usage limits, or an ad-free user experience for an extra cost. The freemium model tends to work well for internet-based businesses with small customer acquisition costs, but high lifetime value. It is a popular tactic for companies just starting out as they try to lure users to their software or service. Freemium has been common practice with many computer software companies. It is a popular model for gaming companies as well. Freemium games and services can catch users off guard, as they may not be aware of how much they (or their kids) are spending on the game since payments are made in small increments.Most people are willing to take a new app or service for a spin, giving the company an easy way to acquire potential users and study their usage behavior. In many cases, companies still benefit from their free users: though these users may not be explicitly purchasing upgrades or items, the company can collect their user information and data, show them ads to make revenue, and boost their own business numbers to continue to enhance the application. Especially for startups or companies that are trying to build a following for their product, the freemium model brings a large amount of brand awareness while not having to provide a lot of customer support.On the flipside, some of the disadvantages of the freemium model are that free users never convert to paid users. Ultimately, though some companies are perfectly happy with their free users and have accounted for these free users to make up a majority of their forecasted earnings through their ad consumption or time spent on the app, they may offer too many features on the free version that prevents users from ever upgrading into the premium version. In addition, users may eventually get tired of a free version as it doesn't offer additional bells and whistles.Ultimately, for the freemium model to work and move people along to more expensive plans, companies must do a variety of steps which include limiting the features offered to free users, so that they will be enticed to upgrade, as free users increasingly use the product or service, offer increased storage, more flexibility or time allowed on the app, and customisations, offer additional personalised or customer service associated with an account.Q. Which of the following is not a disadvantage of the freemium model as mentioned in the passage?a)If a business provides too many free services, paid users would stop paying any charge due to non-differentiation.b)Inability of a business to offer new services even in free version may make users leave such business.c)Since free users are already able to enjoy most services, they may not upgrade to get new features.d)The paid offers may not be enticing enough to motivate people to buy expensive plans.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CAT tests.