Question

When eBay was growing, they offered a listing service free for five months, and that helped build a larger base of users. This is an example of _______.

A) Market segmentation
B) Freemium pricing model
C) Viral marketing
D) Subscription-based model

Answer 1

The strategy used by eBay where they offered a free listing service for five months to build a user base is an example of the Freemium pricing model. This model provides basic services for free, attracting users who might later pay for advanced features.

Step-by-step explanation:

When eBay was growing and they offered a listing service free for five months, which helped build a larger base of users, this is an example of Freemium pricing model. A Freemium pricing model is a business strategy where basic services are provided free of charge, while more advanced features must be paid for. This approach allows users to try the service without cost and potentially leads to them becoming paying customers if they find value in the additional features. This strategy was effective for eBay as it allowed a large number of users to experience their service, leading many to continue using the platform and some to upgrade to premium services.