L12 Pricing 2

L12 Pricing 2 - 6/5/11 Market Pricing Elastic demand occurs...

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Unformatted text preview: 6/5/11 Market Pricing Elastic demand occurs when consumers buy more or less of a product when the price changes Ticket Price Ticket Demand Sales Original price $10 3000 $30,000 Raise to $12 (+20%) 2000 (-33%) $24,000 Lower to $8 (-20%) 4000 (+33%) $32,000 External Factors - Consumer Demand 6/5/11 Market Pricing Inelastic demand means that an increase or decrease in price will not significantly affect demand for the product. Ticket Price Ticket Demand Sales Original price $10 3000 $30,000 Raise to $12 (+20%) 2800 (-0.6%) $33,600 Lower to $8 (-20%) 3200 (+0.6%) $25,600 External Factors - Consumer Demand 6/5/11 Other External Factors Economy Recessions, inflationary periods, unemployment Competition One of the most critical factors Legal Issues Laws that regulate pricing Technology 6/5/11 Ticket Price Determination in Professional Sports According to Rische & Mondello (2004), across major leagues, teams with higher ticket prices: Play in a new facility Play in a large city Have higher attendance and demand Have higher team payrolls Have a city population with higher income Experience recent success Wins on the field Click to edit Master subtitle style 6/5/11 Pricing Strategies 6/5/11 Pricing Strategies Differential Pricing Strategies New Sports Product Pricing Strategies Cost-Based Pricing Strategies Psychological Pricing Strategies Price Adjustments and Discounts 6/5/11 What products do we have to price?...
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L12 Pricing 2 - 6/5/11 Market Pricing Elastic demand occurs...

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