1. Pricing in Sport Marketing
Chapter 8

2. OBJECTIVES
To understand the importance of price and identify price-setting strategies
Understand the importance of value in setting a price
Identify the steps in setting the price for a product
Recognize key issues that can affect pricing in sports

3. PRICE Price: What is it? Price in Marketing:
It’s the amount of money or goods for which a thing is bought or sold.
Price in Marketing:
Consider the costs of manufacturing, customer’s reaction, perceived value and discounts and allowances

4. PRICE IN MARKETING Pricing Strategies: Cost oriented price setting
Experience curve price setting
Target return price setting
Leader and bait price setting
Psychological price setting
Odd-even price setting

5. PRICE IN MARKETING Pricing Strategies: Price lining
Demand-backward price setting
Prestige price setting
Full-line price setting
Complementary product price setting
Product bundling price setting

6. PRICING IN SPORT MARKETING
Price and Value:
Value is described in two equations:
Value = benefits/price OR
Value = quality received/expectations

7. ETHICS AND PRICING
Price Fixing
Price Discrimination
Predatory Pricing

8. SETTING PRICE Estimating Demand Identifying Restrictions
Estimating Cost, Volume and Profit

9. SETTING PRICE Demand: Elasticity: Cost:
The need for a given product in a specific market.
Elasticity:
The change in demand for a product following a change in price.
Cost:
Expenditures to produce a product or service and take it to market.

10. CATEGORIES OF COST
Variable Cost
Fixed Cost

11. BREAK EVEN ANALYSIS Determine the contribution margin
Contribution margin = selling price-variable costs
Reach break-even point
Number of unites to break-even = fixed costs/ contribution margin.

12. KEY PRICING ISSUES
Discounts
Allowances

13. PRICE VERSUS COST Price Cost
Face value of product (e.g. hockey ticket).
Cost
All costs incurred by a consumer to get to the product or service (e.g. parking, gas, food).

14. Questions?