The Springfield Nor’easters: Maximizing Revenues in the Minor Leagues
Date Submitted: November 4th, 2010
Date Due: November 4th, 2010
(5 points) What are the decision problems and research problems for the survey conducted (Exhibit 5)?
How should we price and package different types of tickets to properly maximize received revenues from different types of consumers? *
How price sensitive are our target consumers? Who are our target consumers?
How does the demographic of the Boston area affect attendance for sporting events? *
Do people have any interest in watching minor-league baseball, and if so, is this factor affected by other aspects such as demography (i.e. age, income, etc.)? *
What are the consumption patterns of consumers in terms of trade offs between pricing of tickets, structuring of multiple-ticket packages, revenue yield from concessions?
(10 points) Evaluate the survey in Exhibit 5: Was the questionnaire designed properly? Discuss information collected, design of individual questions, and survey structure.
The information collected from this survey was able to directly address several questions from that apply to the research problems (see Figure A). From this we can derive that overall, in Springfield (assuming that the sample is representative of the population), 38% of residents do have some interest in baseball, but only 28% of the residents have ever attended a professional baseball game. Out of this only 17% of the population have attended at least one minor-league game in the last 2-3 years, however 39% of the residents would be willing to attend at least one game if a minor league baseball team ever came to Springfield. Insight about grand stand tickets was also collected, indicating that 72% of the population is not willing to pay more than a 10% premium over regular bleacher seats for a grand stand seat, hinting that there may be no opportunity to explore in terms of multi-priced seating. Another insight that can be drawn from the survey is that 81% of those who attend a game would be willing to pay $6 or more on various concessions per person. 56% of those surveyed were female and 66% of those surveyed lived with at least one child between the ages of 5-16, which may indicate that child-ticket pricing may be exploited. In addition, the sequence of questions did follow the typical “qualifying questions, warm-ups, transitions, difficult and complicated questions, and finally, classification & demographics questions” order.
However when it came to the willingness-to-pay for the different types of tickets themselves, there are some problems that Buckingham did not foresee when distributing this survey. One of the major problems was with how the pricing question was presented. First, the question itself was worded in a way that made little intuitive sense: asking the customer what they would be willing to pay per game, instead of asking their maximum willingness-to-pay (e.g. someone who is willing to pay $10 for a game would be willing to pay $4 as well.) Next, the categories of people indicating their willingness-to-pay are also not very clear. There is no way to distinguish who is willing to pay a certain price for a certain type of ticket. For instance, if someone had indicated they were willing to pay $10 for a single game ticket, but earlier stated they would to subscribe to a 38-game full season, the answer they...
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