In Springfield Nor’easters case study, Larry Buckingham is the marketing director for the Nor'easters, a class A minor league baseball team in Springfield, MA. As any other profit-seeking business the objective of this sports club is to sustain a viable business by making profit, at least brake-even in the opening season. The two major sources of revenue for Nor’easters are ticket and concession sales. Larry conducts market research to gain knowledge about potential customers and their willingness to attend Nor’easters games on different ticket price levels. The results of the survey and other information collected by various sources help Larry to develop a pricing strategy for the Nor’easters’ ticket and concession sales. This paper evaluates the data yielded from the market research, presents two alternative pricing strategies and states the strengths and weaknesses for each. Finally, this paper concludes with a set of recommendations from the alternatives discussed. According to the evaluation of survey data, the information provided in the case and assumptions made, at least 50% of the Springfield population need to attend at least one game throughout the season for Nor’easters to break even. However, although not fully reflective of the whole population due to limited sample size, the survey data states that only 39% of Springfield residents are willing to attend games. Nor’easters will have to escalate this to above 50% level by conducting marketing and communications actions or consider establishing itself in some other city. I. Background
Larry Buckingham is the marketing director for the Nor’easters, a new Class A minor league baseball team in Springfield, Massachusetts. Since they just opened their offices, the team will not play a game until their first season starting in June 2009, 18 months from now. Larry is responsible of establishing the correct pricing strategy prior to season start to maximize revenue and at least break-even in the team’s first season. Although ticket sales will generate the largest portion of the revenue, attendance is also relevant in generating revenue from concession sales such as snacks, souvenirs, arcade games etc. Springfield, having lost its higher income residents during the last 50 years, is a city of limited financial means. Although the economy is recently reviving by the entry of service industry, 25% of families still live below poverty line. Residents of Springfield are rarely exposed to sports events due to lack of professional clubs and the frugal nature of its citizens. The ones, who are willing to pay and watch a game, drive somewhere else in MA. Buckingham wants to conduct a market research study which would help him develop a pricing strategy for the Nor’easters’ ticket and concession sales. He starts his research by analysing the existing data from a national research conducted in 2005 by the League Sports Association and confirms that families with school age children are more likely to attend sporting events. The research also showed that only 8% of those surveyed attended a professional baseball game that year. Buckingham is informed by a local sport reporter that high entertainment value provided to customers, who consist of sports fans, college students and families with school age children, is the key for high attendance. He also knows that college students rarely show up at sports events due to high ticket prices and lack of transportation. Buckingham decides to conduct his own market research to collect primary data specific to this market apart from the secondary data he collected from LSA’s out-dated comprising major league data which is of no use for him. The primary data source Buckingham chooses to use is conducting a survey. His research objective is to predict how many people would come to see the Nor'easters and how much to charge them. In order to prepare the survey questions and gain some insights he speaks with 6...
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