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

Developing a foundational knowledge of PRICING to understand its role in marketing. Unit 4 Objective 4.07. IDENTIFY FACTORS AFFECTING PRICING and PRICING ISSUES OF SEM PRODUCTS. FACTORS AFFECTING PRICING OF SEM PRODUCTS. LEAD TIME MARKET DEMAND

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

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  1. Developing a foundational knowledge of PRICING to understand its role in marketing Unit 4 Objective 4.07

  2. IDENTIFY FACTORS AFFECTING PRICING and PRICING ISSUESOF SEM PRODUCTS

  3. 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

  4. 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

  5. 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

  6. 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?

  7. DIFFERENT PRICING OBJECTIVES

  8. 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

  9. 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"

  10. 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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