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VBS: Lesson 2 TICKET PRICING

VBS: Lesson 2 TICKET PRICING. Sports Marketing Learning Target(s). I will be able to determine and set the price level for my VBS tickets. I will be able to analyze demand to help set accurate/profitable ticket, vending and merchandising prices for my VBS franchise. Definitions. PRICE

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VBS: Lesson 2 TICKET PRICING

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  1. VBS: Lesson 2TICKET PRICING

  2. Sports MarketingLearning Target(s) • I will be able to determine and set the price level for my VBS tickets. • I will be able to analyze demand to help set accurate/profitable ticket, vending and merchandising prices for my VBS franchise.

  3. Definitions PRICE REVENUE DEMAND YIELD MANAGEMENT PRICING

  4. What is the main “product” of a sports franchise? The seats or tickets they offer for purchase.

  5. PRICE - the amount of money you charge customers for one unit (product) of what you are offering. VBS – your price for your tickets should reflect what your fans are willing and able to pay. If the

  6. DEMAND - the amount of goods/services that customers want and are able to buy. VBS – your ticket prices should be determined by the demand of the event and your potential customers (fan base) income levels.

  7. Why is pricing so tricky? # of seats are fixed Example: Stadium: capacity = 50,000 Tickets for sale must = 50,000 there is no marginal cost to selling additional seats

  8. Where are “seats” fixed?

  9. What happens if pricing is set too HIGH? Don’t sell as much Limits your target market Limits your other revenue streams Stadium Parking Stadium Vendors Stadium Merchandise Simply said, “You Lose Money”.

  10. REVENUE - the funds (money) you collect for things you sell. Unit Sales (x) Price of each Unit = Revenue Example: 500 Box Seats (x) $2.50 price per Box Seats = $1,250 is the Revenue VBS sources (streams) of Revenue: • Ticket Sales • Concessions • Licensing • Sponsorships

  11. What happens if pricing is set too LOW? You will lose money – why? Supply and Demand is not balanced. Seats should be priced based on “VALUE”. Value = what fans think its worth and what they feel they benefit from it.

  12. Yield Management Pricing (YMP): Concept of setting different prices for seats of different value Example - higher price for seats with better views lower price for top six seats YMPis used whenever quantity of a product is fixed. Example - Stadiums (PBS – 65,535) & (Hines Field – 64,450) Arenas (Rupp Arena – 23,000) & (MSG – 19,500

  13. Other examples where YMP is used: Sporting events Plays Concerts Hotels Airlines

  14. VBS – Lesson 2Assignment Ticket Pricing

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