Transcript 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
• REVENUE
• DEMAND
• YIELD MANAGEMENT PRICING
• Dynamic Pricing
• Marginal Cost
• Ticket Brokers
• Ticket Agencies
What is the main “product” of a
sports franchise?
The seats or tickets they
offer for purchase.
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.
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
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.
Pricing is 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.
FYI – VBS there are no marginal costs.
Where are “seats” fixed?
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”.
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.
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
YMP is 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)
Other examples where YMP is used:
Plays
Concerts
Hotels
Airlines
How do we purchase our tickets?
FACT!
½ of all event tickets are never sold, while
10% are sold for twice their face value.
What’s the cause of this ticketing disparity?
BROKERS and the INTERNET
How do fans purchase their tickets:
Ticket Brokers – individuals or companies who
purchase tickets in bulk and then sell them for a profit.
* Causes artificial demand which drives the price up.
Team Box Office – safest most affordable means of
buying a tickets.
Ticket Agencies – Companies stadium owners use to
manage their ticket sales.
Downside
Pay over face value with ticket brokers / ticket agencies.
Upside
Dynamic Pricing – prices that aren’t fixed but change based on
the ebbs (increase) and flow (decrease) of Supply and Demand.
Example:
Airline Tickets via www.Priceline.com
Consumer makes an offer, and seller can either accept the offer
or make counteroffer.
Starting to see this occur with sporting events as it helps reduce
the financial risk from unsold tickets.
www.ticketmaster.com
www.Stubhub.com
www.vividseats.com
VBS - Lesson 1: Ticket Pricing
Reading Quiz
Math Quiz
SIM Exercise
Due: Tuesday, Nov. 11th - End of Day