Developing a foundational knowledge
of PRICING to understand its role in
FACTORS AFFECTING PRICING
and PRICING ISSUESOF SEM
FACTORS AFFECTING PRICING
OF SEM PRODUCTS
• LEAD TIME
• MARKET DEMAND
– How much of a product customers will buy at a certain price
• MARKET SEGMENTATION (TARGET MARKET)
– Dividing product into different segments:
• Time: Pay more money for “Prime time”
• Place: Pay more money for Court-side seats and less for nosebleed
• RESPONDING TO COMPETITORS
– Non-price: Charge higher prices than competitors for unique
– Price: Encourage sales with lower prices than competitors
– Measure of how sensitive customers are to changes in
• Gauges relationship between market demand and price
– INELASTIC DEMAND
• Price changes have little to no impact sales
– ELASTIC DEMAND
• Small price changes have big impact on sales
RESPONDING TO COMPETITORS
• 3 Types of Pricing Strategies:
– PENETRATION PRICING
• Setting prices lower than the competition
– Used to introduce a new product or to encourage maximum
• Setting prices higher than the competition
– Used to keep new competitors out of market or promote “high-class”
image of product
• Grouping products or services together at a discounted rate
– Would be cheaper bought together than individually
– Cost of production for good/service
• If cost more to produce an event then revenue from ticket sells prices =
have no business
– What are the PERCIEVED BENEFITS to consumers?
• Unique perception of each person
• PERCEIVED BENEFITS:
– TANGIBLE: Physical benefits (i.e.: Buying a surfboard with an ankle-band)
– INTANGIBLE (i.e.: Buying a surfboard to spend time with friends at the beach)
– What are the goals of the good/service?
• Do you want it to seem “high class” or affordable?
• What type of attendees do you want?
DIFFERENT PRICING OBJECTIVES
Company-Focused Competitor-Focused Customer-Focused
•Pricing products to •OFFER LOWEST •Offering the MOST
ENHANCE THEIR PRICES DISCOUNTS
•Offer “FAIR” PRICE
•COVERING COSTS IN CONSUMER’S
•CREATING PROFITS MIND
TICKET PRICING STRATEGIES
• SCALING THE HOUSE
– Pricing tickets differently based on
• Location of seat
• Time of purchase
– YIELD-MANAGEMENT PRICING
• Maximize revenue with venues with limited capacity
– Venues with limited seating price tickets differently to have
greater revenue potential
• #21 The Greensboro Grasshoppers are selling “Family 3 Packs” on Tuesday Nights. The 3 items they purchase
at the concession stand would be cheaper than purchasing them individually. What pricing strategy is being
• #22 In sports and entertainment marketing, the concept of price includes not only the cost of a ticket to an
event but also the
• value of the overall experience.
• quality of the media advertising.
• elements of the marketing plan.
• location of the facility.
• #23 Which of the following pricing strategies would group sport/event products into a different segment for
• #24 Which of the following is a tangible benefit of purchasing a surfboard:
• It is the most popular brand on the market.
• It gives you the opportunity to join a surfing club.
• It allows you to spend time with your friends at the beach.
• It has a wrist strap to keep it connected to you in the water.
• #26 Which of the following is a company-focused pricing objective for sport/event products:
• Offering the most discounts to customers
• Offering the lowest prices
• Enhancing image
• Achieving a price customers feel is "fair"
Unit 4 Project Part 6
• As the Marketing Coordinator of a NC Venue, it is your responsibility to
establish ticket pricing strategies for your upcoming event.
• You are to set ticket prices and create a ticket pricing strategy:
– Slide 7: Ticket Pricing Strategy
• Pricing Objective – Is it Company Focused, Competitor Focused, or
• Are you using Penetration, Skimming, Bundling, or a combination as a
• Ticket Pricing Strategy:
– Is it based on location of the seat?
– Is it based on how early it was purchased?
– Is it based on limited seats available?
– Is it a combination of the above three?
– Discuss why you chose that strategy.
• State the price of your ticket/tickets and explain why you chose the
price you did for the ticket/tickets.
• Create a VISUAL of a sample TICKET
• Continue along with Unit 4 Project Part 5. Complete and submit to Edmodo by
the end of class.