Pricing Strategies of Professional Sports Teams Table of Contents Pricing Strategy 3 Discussion 4 Findings 4 5 Data Analysis 6 Recommendations 7 References 8 Appendix 9 Pricing Strategy Understanding the price what buyers wants to pay for a product or service is very important. It requires the knowledge regarding perceived and actual value for owning a product or service (The Marketing association of Australia and New Zealand, n.d. ). Price is used as a strategic tool that is used by the organizations to position their products or services in the market place (Atkinson, Kaplan, Matsumura, Young & Kumar, 2009, p. 291).
Therefore pricing strategy plays an indispensable role in the acceptance of a product in the market. Pricing can be stated as the way of influencing the customer to acknowledge the price. Pricing plays an indispensable role towards the attainment of customers. Pricing can demonstrate two meanings either social status or value for money. Furthermore with a sound pricing strategy it is possible to tap new customers. Organizations or other groups use various methods to price their product. Depending upon the life cycle of product and target customers pricing is carried out.
A pricing strategy for a product usually changes with the life cycle of the product (Armstrong & Kotler, 2005, p. 330). This happens mainly because of the entry of competitors. To cite an instance a company launches a unique product and prices it high but once similar products enter the market with relatively low price, the company lefts with no choice but to reduce the price. Likewise in every industry whether garments, construction, IT or even sports industry. The next half of the report will discuss about the pricing strategy that can be adopted by US sports teams.
The report will cover the topics such as ticket prices, marketing cost, apparel selling, salary of players, and concessions among others. Discussion In order to set price for a products or service companies can employ various methods. Some of the evident methods by which pricing is carried out are cost plus pricing method, market penetration, market skimming, optional pricing, average price product mix, captive pricing, discount [pricing, product bundle pricing, discriminatory pricing, promotional pricing, and psychological pricing method (Sutherland & Canwell, 2008, p. 298).
However, depending on the intentions and objectives of the company a particular form is applied. The primary research has revealed a number of relevant information regarding the process of pricing. Similarly the US sports teams also have to consider a number of facts for the purpose of pricing their merchandise as well as tickets. Now in order to run a club successfully a club has to pay huge salaries to their players. However the maximum amounts comes from the official sponsors of the club.
Yet there are situations when the clubs need to use own funds for the purpose of retaining a player or for some other needs. Therefore revenue directly earned by the club is of utmost importance and accordingly the pricing strategy adopted by the company. Findings This section is about the findings of primary data. In this context 20 samples had been chosen for the purpose of carrying out a short questionnaire survey in order to get insights about the pricing strategies of professional clubs and the factors considered by an individual before visiting the ground.
The questionnaires are attached in the appendix of the report. The results are highlighted below with graphs. . Peak season Basis of Ticket price Merchandise as Promotional tool What drives to the ground Impact of Ticket Prices Data Analysis Therefore according to responses most of the club officials considers both the beginning as well as end half as the peak, therefore prices must be kept high in these periods.
Most of the officials highlighted that they price the tickets according to the seat availed by the consumers. However few of them also stated that they price according to the time of purchase i. e. as the match nears the ticket prices keeps increasing.
According to maximum officials merchandises are the most important factor for a clubs branding and visibility. The consumers highlighted all the factors such as players, game and clubs drives them to the field. On asking the consumers about the impact of ticket prices, most of them highlighted ticket prices are important factors on their decision. Recommendations Ticket price is the only place from where clubs can actually earn high revenues. Therefore this area must be utilized properly. Therefore clubs must try to gain as much as possible from the selling of tickets.
Moreover it is the only form of direct income for a club apart from selling of merchandise. Hence the pricing of tickets needs to be done on the basis of 2 forms. Both market penetration as well as market skimming price needs to be practiced. The clubs can follow the simple strategy i. e. they can employ skimming strategy during the beginning of the seasons. In this period consumers also portrays high interest and pays accordingly. While during the mid half of season the number of turnouts slightly decreases, therefore in order to ensure optimum results, clubs should lower their ticket prices following penetration strategy.
Again during the last half of the season the interest among the consumers grew, so the clubs can again use skimming strategy to price the tickets. Furthermore the prices of the tickets must vary according to the place inside the stadium. Selling of merchandise is also a form of direct income for the clubs. In this context clubs needs to price the products intelligently.
It should keep in mind that fans exist from all the segments of the market. There can be fans from average income group as well as there can be fans from higher income groups. Hence the clubs must manufacture 2-3 variants for each product and price it according to the quality of the variants. This also plays an important role in the marketing of the company. The jersey of the club is the most visible product; hence it can be priced a bit low for ensuring high sales.
This will hugely aid in the process of enhancing the visibility of the club. References Armstrong, G., & Kotler, P. (2005). Marketing: An Introduction (7th ed. ). New Delhi: Pearson Education India. Atkinson, A. A., Kaplan, R. S., Matsumura, E. M., Young, S. M., & Kumar, G. A. (2009). Management Accounting (5th ed. ). New Delhi: Pearson Education India. Sutherland, J., & Canwell, D. (2008). Essential Business Studies A Level: AS Student Book AQA. Buckinghamshire: Folens Limited. The Marketing association of Australia and New Zealand. (No Date). Introduction to Pricing Strategies.
Retrieved from http: //www. marketing. org. au/Introduction_to_Pricing_Strategies. aspx. Appendix Questionnaire (For club Officials) 1. Which phase in the league is considered peak in terms of the number of turnouts? a. beginning b. mid half c. end half d. both a & c 2. On what basis you price your tickets? a. seat availed b. time of purchase c. remains flat through the season 3. Do you think merchandises acts as a promotional tool? a. Yes b. No C. To some extent (For Supporters) 1. What drives you to the ground? a. passion for the game b. players c. Love for the club d. All 2. Do you consider ticket prices before visiting the ground? a.
Yes b. No c. Sometimes