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Pricing Strategies. Chapter 9. Pricing Strategies. Price = Value High price = high quality Low price = low quality. Elements of Value. Convenience Aesthetics Cleanliness Comfort Safety & security Availability Durability. Value is determined by consumers’ perceptions.
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Pricing Strategies Chapter 9
Pricing Strategies • Price = Value • High price = high quality • Low price = low quality
Elements of Value • Convenience • Aesthetics • Cleanliness • Comfort • Safety & security • Availability • Durability
Value is determined by consumers’ perceptions. • Marketers must price the product according to consumers’ perceptions.
Factors in Pricing • The product elements: • Hard or soft goods (equipment/facilities vs. apparel) • Tickets • Memberships • Information (programs, magazines, internet) • Signage
Price is Most Manipulated Itemin the Marketing Mix • Easily changed • Most visible • Most effective • Most impact on consumers’ perceptions
Pricing Objectives • Efficient use of resources • Fairness to consumers • Maximize participation • Positive consumer attitudes • Maximize product exposure • Generate profit
Approaches to Pricing • Costs of production • Market conditions (supply and demand) • Competitors’ prices • Organizational objectives • Product frequency (MLB vs. NFL)
Four C’s in Pricing (Brenda Pitts) • Consumers • Competitors • Company (costs of production) • Climate (economic conditions)
Factors in Pricing • Market Demand – how sensitive is market to price changes • Elastic - a percentage change in price results in a greater percentage change in quantity sold • Inelastic – a percentage change in price results in a smaller percentage change in quantity sold
Lead time required for purchase • Lower ticket prices (MLB vs. NFL) • Ease of purchase (toll free numbers; internet) • Game day advertising
User segmentation • Corporate suite patrons • Season tickets • Group tickets • Single game tickets Note: Each react differently to price changes
Time and place • Prime time Vs. non-prime time • Courtside vs. balcony seats
Responding to competitors • Raising & lowering prices • Raising and lowering actual or perceived quality