1. Mrs. Massimo Sports Marketing
Unit 5: SPORT PRICING
Mrs. Massimo
Sports Marketing

2. DO NOW: Intro To Pricing
What do you think are some of the things that marketers have to take into consideration when setting prices on their products?
Why do you think this is a crucial process?
Provide Examples
How do you think prices for merchandise and services are set?

4. WHAT EXACTLY ARE WE PRICING?
In the sport industry, many products need to be priced.
Examples would be:
Hard or Soft Goods
Equipment/Apparel
Tickets
Memberships
Concessions

5. WHAT EXACTLY ARE WE PRICING?
Information
Newspapers/Magazines, Cable & Satellite Service
Signage
Billboards, other types of sponsorship
Advertising
Broadcast Rights

6. WHY IS PRICING CRITICAL FOR SPORT ORGANIZATIONS?
Constantly Changing:
Prices are readily modified for competitiveness.
Strong Marketing Tool for Attendance
Price and attendance have a direct relationship.
Highly visible in the media and to the public.

7. Satisfaction=Benefit-Cost
BASIC PRICING FORMULA
The central equation for sport pricing in all situations is:
Satisfaction=Benefit-Cost
Example:
How much are you willing to pay for the ultimate experience?

8. EXAMINING COST VERSUS PRICE
Consumer Cost
The consumer’s total dollar value for the entire entertainment package.
Includes travel, concessions, tickets, parking, etc.
Producer Cost
The amount of money it takes to create the product.
Price
The dollar amount the producer charges the consumer.
Profit= (Price - Producer Cost)

9. It is important for a producer to keep in mind all the consumer costs involved in appreciating their sport product.
How much does it actually cost to go to an NFL game?

10. VALUE VERSUS PRICE
A product will only be successful when the consumer believes the value to be greater than the price.
Example: College Tuition
The following elements may affect a Product’s Value:
Convenience
Aesthetics
Cleanliness, comfort, security
Availability
Durability

11. CLEANLINESS, COMFORT, SAFETY
CONVENIENCE
COSTCO
$12.99 for the 30-pack which is about 43 cents per 16.9 oz bottle
How much do you pay at 7-11?
AESTHETICS According to Consumersearch, "A study published in the
British Journal of Sports Medicine in October 2007 found
that low- and medium-costrunning shoes offered the same cushioning
and support as more expensive running shoes."
This.
CLEANLINESS, COMFORT, SAFETY

12. COMPONENTS OF PRICING
When setting a price, a marketer must take the following components into consideration:
Production Costs
Market Conditions
Supply/Demand, State of Economy
Competitors’ Prices and Products
Organizational Objectives
Profit goals
Product or Event Frequency
Football Game vs. Baseball Game

13. PRICE DETERMINATION -Who determines the price of a sport product?
The Consumer
The Competitor
The Company
The Climate

14. PRICE DETERMINATION -Who determines the price of a sport product?

15. TYPES OF PRICING METHODS
COST-PLUS PRICING
GOING-RATE PRICING
DEMAND-ORIENTED PRICING
PEAK-LOAD PRICING
PENETRATION PRICING

16. TYPES OF PRICING METHODS
COST-PLUS PRICING
Base your prices on your own costs, then determine the profit you desire.
Most commonly combined with one of the other methods.
GOING-RATE PRICING
Charge what your competitors are charging.
DEMAND-ORIENTED PRICING
Survey consumers to see what they are willing to pay.
Spalding NEVERFLAT Official Game Basketball (29.5")
Costs $10-12 to produce
Retail Average Price $38.32
Modells $39.99
Sports Authority $34.99
Dick’s $39.99

17. TYPES OF PRICING METHODS
PEAK-LOAD PRICING
Change prices according to seasonal demands.
EX. Tailgating and camping supplies rise during Football season.
PENETRATION PRICING
Begin by offering low prices to establish a fan base, then slowly increase your prices.