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Pricing Strategies

Pricing Strategies. Chapter 9. Pricing Strategies. Price = Value High price = high quality Low price = low quality. Elements of Value. Convenience Aesthetics Cleanliness Comfort Safety & security Availability Durability. Value is determined by consumers’ perceptions.

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Pricing Strategies

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  1. Pricing Strategies Chapter 9

  2. Pricing Strategies • Price = Value • High price = high quality • Low price = low quality

  3. Elements of Value • Convenience • Aesthetics • Cleanliness • Comfort • Safety & security • Availability • Durability

  4. Value is determined by consumers’ perceptions. • Marketers must price the product according to consumers’ perceptions.

  5. Factors in Pricing • The product elements: • Hard or soft goods (equipment/facilities vs. apparel) • Tickets • Memberships • Information (programs, magazines, internet) • Signage

  6. Price is Most Manipulated Itemin the Marketing Mix • Easily changed • Most visible • Most effective • Most impact on consumers’ perceptions

  7. Pricing Objectives • Efficient use of resources • Fairness to consumers • Maximize participation • Positive consumer attitudes • Maximize product exposure • Generate profit

  8. Approaches to Pricing • Costs of production • Market conditions (supply and demand) • Competitors’ prices • Organizational objectives • Product frequency (MLB vs. NFL)

  9. Four C’s in Pricing (Brenda Pitts) • Consumers • Competitors • Company (costs of production) • Climate (economic conditions)

  10. Factors in Pricing • Market Demand – how sensitive is market to price changes • Elastic - a percentage change in price results in a greater percentage change in quantity sold • Inelastic – a percentage change in price results in a smaller percentage change in quantity sold

  11. Lead time required for purchase • Lower ticket prices (MLB vs. NFL) • Ease of purchase (toll free numbers; internet) • Game day advertising

  12. User segmentation • Corporate suite patrons • Season tickets • Group tickets • Single game tickets Note: Each react differently to price changes

  13. Time and place • Prime time Vs. non-prime time • Courtside vs. balcony seats

  14. Responding to competitors • Raising & lowering prices • Raising and lowering actual or perceived quality

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