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Develop a foundational knowledge of PRICING to understand its

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					Developing a foundational knowledge
 of PRICING to understand its role in
             marketing

               Unit 4
           Objective 4.07
          IDENTIFY
FACTORS AFFECTING PRICING
 and PRICING ISSUESOF SEM
         PRODUCTS
      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)
• SMOOTHING
  – 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
    product
  – Price: Encourage sales with lower prices than competitors
                MARKET DEMAND
PRICE ELASTICITY:
  – Measure of how sensitive customers are to changes in
    price
     • 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
          participation


  – SKIMMING
     • Setting prices higher than the competition
        – Used to keep new competitors out of market or promote “high-class”
          image of product
  – BUNDLING
     • Grouping products or services together at a discounted rate
        – Would be cheaper bought together than individually
                        PRICING ISSUES
• COST
  – Cost of production for good/service
     • If cost more to produce an event then revenue from ticket sells prices =
       have no business
• VALUE
  – 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)
• OBJECTIVES
  – 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
IMAGE
                                         •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
                                   Quiz Preview
•   #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
    used?
         •    Bundling
         •    Even
         •    Penetration
         •    Skimming
•   #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
    customers?
         •    Smoothing
         •    Stretching
         •    Skimming
         •    Penetration
•   #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
           Consumer Focused?
         • Are you using Penetration, Skimming, Bundling, or a combination as a
           strategy? Why?
         • 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.

				
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posted:9/22/2013
language:English
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