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VBS: Lesson 1 TICKET PRICING

VBS: Lesson 1 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. KEY TERMS. PRICE

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VBS: Lesson 1 TICKET PRICING

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  1. VBS: Lesson 1TICKET 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. KEY TERMS PRICE REVENUE DEMAND YIELD MANAGEMENT PRICING Dynamic Pricing Marginal Cost Ticket Brokers Ticket Agencies

  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. REVENUE - money collected in sales. Revenue (# of unit sales) x (price of each unit) VBS a number of revenue sources (streams); • Tickets • Concessions • Licensing • Sponsorships Real Life - TV / Radio Broadcast

  7. 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.

  8. Why is pricing so tricky? # of seats are fixed Example: Stadium: capacity = 50,000 Tickets for sale must = 50,000 Marginal Cost – cost of producing one additional good or making one more commodity available. there is no marginal cost to selling additional seats

  9. Where are “seats” fixed?

  10. 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”.

  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” rows 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. How do fans purchase their tickets: Team Box Office – safest most affordable means of buying a tickets. Ticket Brokers – individuals or companies who purchase tickets and then sell them for a profit. Artificial demand which drives the price up. Ticket Agencies – Companies stadium owners use to manage their ticket sales.

  15. VBS – Lesson 2Assignment Ticket Pricing

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