Presentation on theme: "Developing a foundational knowledge of PRICING to understand its role in marketing Unit 4 Objective 4.07."— Presentation transcript:
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-FocusedCompetitor-FocusedCustomer-Focused Pricing products to ENHANCE THEIR IMAGE COVERING COSTS CREATING PROFITS OFFER LOWEST PRICES Offering the MOST DISCOUNTS Offer FAIR PRICE IN CONSUMERS 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.