Transcript LOCATION, LOCATION, LOCATION

VBS: Lesson 2
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.
Definitions
• PRICE
• REVENUE
• DEMAND
• YIELD MANAGEMENT PRICING
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.
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.
Why is pricing so
tricky?
• # of seats are fixed
Example:
Stadium: capacity = 50,000
Tickets for sale must = 50,000
• there is no marginal cost to selling additional
seats
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”.
REVENUE
- the funds (money) you collect for things you sell.
Unit Sales (x) Price of each Unit = Revenue
Example:
500 Box Seats (x) $2.50 price per Box Seats = $1,250 is the Revenue
VBS sources (streams) of Revenue:
• Ticket Sales
• Concessions
• Licensing
• Sponsorships
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 seats
• 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:
• Sporting events
• Plays
• Concerts
• Hotels
• Airlines
VBS – Lesson 2
Assignment
Ticket Pricing