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 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

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.