Gratis
Encyclopedia
Gratis is the process of providing goods or services without compensation. It is often referred to in English as "free of charge" (FOC) or "complimentary". Companies, producers, and service providers often provide certain things free of charge as part of a larger business model
or pricing strategy
.
of the goods is a fundamental element
of the marketing
process. While it would defeat the business model if companies provide all of their goods and services free of charge, it is common for them to provide limited amount of free goods in their promotional mix
. Many companies often provide free samples to the press in order to generate media coverage for their products. Depending on the product, companies may provide free samples to prospective buyers.
In addition, many companies would often provide complementary goods and services free of charge. For example, coffeehouse
s often provide Internet access free of charge to attract more customers. Hotels often provide free shuttle services. Restaurants often provide valet parking
service free of charge.
Companies may also distribute branded stationery
, refrigerator magnet
, or similar items free to promote their brand instead of any specific line of products.
where major part of the revenue comes from advertisers, it is often in the company's interest to reach as many people as possible. In this model, companies would often distribute most of their products and services free of charge, so it can reach the largest possible audience. The companies would then attempt to recoup all costs from advertising.
is relatively small, it is common for developers to publish software under free of charge licenses.
One of the early and basic forms of this model is called freeware
. Under a freeware license, software is licensed free of charge for regular use and the developer does not gain any monetary compensation.
With the development of the software industry, other license schemes arose similar to limited free products in standard marketing. These licenses offer users limited use, while attempting to recuperate development cost through the full product. Two common examples are shareware
and trialware.
With the advent of the free software movement
, license schemes were created to give developers more freedom in terms of code sharing. A distinction has to be drawn between "freedom" and "free of charge", where the latter sometimes also can be referred to as "free as in beer". This distinction is often called Gratis versus Libre
.
Business model
A business model describes the rationale of how an organization creates, delivers, and captures value...
or pricing strategy
Pricing strategies
Pricing strategies for products or services include the following:-Competition-based pricing:Setting the price based upon prices of the similar competitor products.Competitive pricing is based on three types of competitive product:...
.
Etymology
The English term gratis has its origins in late Middle English; from Latin. A contraction of gratiis, meaning 'as a kindness', which in turn stems from the root gratia meaning 'grace' or 'kindness'. It is widely used in the Afrikaans, Czech, Polish, French, Dutch, Spanish, Italian, Portuguese, Romanian, Bahasa Indonesia, Scandinavian and German languages, with the same meaning.Marketing
In a standard business model where goods and services are exchanged for a monetary compensation, pricingPricing
Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a...
of the goods is a fundamental element
Marketing mix
The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients",...
of the marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
process. While it would defeat the business model if companies provide all of their goods and services free of charge, it is common for them to provide limited amount of free goods in their promotional mix
Promotional mix
There are seven main aspects of a promotional mix. These are:* Advertising - Presentation and promotion of ideas, goods, or services by an identified sponsor...
. Many companies often provide free samples to the press in order to generate media coverage for their products. Depending on the product, companies may provide free samples to prospective buyers.
In addition, many companies would often provide complementary goods and services free of charge. For example, coffeehouse
Coffeehouse
A coffeehouse or coffee shop is an establishment which primarily serves prepared coffee or other hot beverages. It shares some of the characteristics of a bar, and some of the characteristics of a restaurant, but it is different from a cafeteria. As the name suggests, coffeehouses focus on...
s often provide Internet access free of charge to attract more customers. Hotels often provide free shuttle services. Restaurants often provide valet parking
Valet parking
Valet parking is a parking service offered by some restaurants, stores, and other businesses, particularly in North America. In contrast to "self-parking", where customers find a parking space on their own, customers' vehicles are parked for them by a person called a valet...
service free of charge.
Companies may also distribute branded stationery
Stationery
Stationery has historically meant a wide gamut of materials: paper and office supplies, writing implements, greeting cards, glue, pencil case etc.-History of stationery:...
, refrigerator magnet
Refrigerator magnet
A refrigerator magnet is an ornament, often whimsical, attached to a small magnet which is used to post items such as shopping lists or report cards on a refrigerator door, or which simply serves as decoration. Refrigerator magnets come in a wide variety of shapes and sizes, including but not...
, or similar items free to promote their brand instead of any specific line of products.
Mass media
In certain industries, such as the mass mediaMass media
Mass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
where major part of the revenue comes from advertisers, it is often in the company's interest to reach as many people as possible. In this model, companies would often distribute most of their products and services free of charge, so it can reach the largest possible audience. The companies would then attempt to recoup all costs from advertising.
Software
In software development, where the cost of mass productionMass production
Mass production is the production of large amounts of standardized products, including and especially on assembly lines...
is relatively small, it is common for developers to publish software under free of charge licenses.
One of the early and basic forms of this model is called freeware
Freeware
Freeware is computer software that is available for use at no cost or for an optional fee, but usually with one or more restricted usage rights. Freeware is in contrast to commercial software, which is typically sold for profit, but might be distributed for a business or commercial purpose in the...
. Under a freeware license, software is licensed free of charge for regular use and the developer does not gain any monetary compensation.
With the development of the software industry, other license schemes arose similar to limited free products in standard marketing. These licenses offer users limited use, while attempting to recuperate development cost through the full product. Two common examples are shareware
Shareware
The term shareware is a proprietary software that is provided to users without payment on a trial basis and is often limited by any combination of functionality, availability, or convenience. Shareware is often offered as a download from an Internet website or as a compact disc included with a...
and trialware.
With the advent of the free software movement
Free software movement
The free software movement is a social and political movement with the goal of ensuring software users' four basic freedoms: the freedom to run their software, to study and change their software, and to redistribute copies with or without changes. The alternative terms "software libre", "open...
, license schemes were created to give developers more freedom in terms of code sharing. A distinction has to be drawn between "freedom" and "free of charge", where the latter sometimes also can be referred to as "free as in beer". This distinction is often called Gratis versus Libre
Gratis versus Libre
Gratis versus libre is the distinction between two meanings of the English adjective "free"; namely, "for zero price" and "with little or no restriction"...
.