Sports Marketing
Pricing Strategies
What are the basics of pricing?
•In sports, there is a vast range of products that require pricing
•These elements are priced according to range of variables: location, images, and
time
•Price is critical in the Marketing mix:
Price is the most readily changes
Effective tool (when demand is elastic)
Highly visible
Core pricing issues (cost, value and objectives): Satisfaction =benefit – cost
Cost (of total attendance) versus price (ticket)
Value and price
-Consumers perceive a higher price to indicate higher quality
-Consumer perceptions link price and value (product values include: convenience,
aesthetics, risk, availability, durability)
Push and pull of pricing objectives
-Efficient use of resources, fairness, participation opportunities, positive user attitudes,
profits
Standard approaches to pricing
•Production Costs
•Market Conditions-supple and demand
•Competitors prices- those competing for the same dollar
•Organizational objectives, including profit and distribution agents
•Product or event frequency
Standard pricing approaches
Break-even analysis
-FC (fixed costs) + VC (variable costs)= TC (total costs
Cost-Plus pricing
-Cost + desired profit= Price
Market approach
-What the market will bear
Caption Pricing
-Offering a price “per head”
Special Factors:
Market Demand: sensitivity of market to price change
-Elasticity of demand -= %change in quantity demanded/ %change in price
-Inelastic demand – a % change in price results in a smaller % change in quantity
-Elastic demand- a % change in price results in a larger % change in quantity
-Penetration pricing- pricing in the lower range of expected prices (elastic markets)
-Skim pricing- pricing high in expected range of pricing (inelastic markets)
Lead time
-Require for a purchase
