The Springfield nor’easters: Maximizing Revenues in the Minor Leagues

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The Springfield Nor’easters: Maximizing Revenues in the Minor Leagues

The Springfield Nor’easters

Executive Summary

Springfield, Massachusetts is the new location for the Nor’easters Class A minor league baseball team. The Nor’easters baseball team chose Springfield because of the advantage of having the distance from any major league game venue. The owner of the team, Jimmy Mercante, needs the Nor’easters to bring in enough revenue to be able to run itself, other than some fixed expenses that are paid by their affiliate major league team. This team is looked at for being a development ground for youth players. To make a decision on pricing, a survey was completed, but achieved a relatively low response rate. Although an optimal pricing plan can be arrived at from survey responses, the problem is due to the very low responses rates, the survey results carry little statistical credibility. Therefore, what appears to be a marginal break-even for the first season of play could easily turn into a sizable loss. If it turns out that the percentage of people not participating in the survey actually are not interested in a minor league game, for whatever reasons. Larry Buckingham, Nor’easters Marketing Director, can take further steps in increasing the awareness of the new team by running a campaign to accomplish publicity among local residents, highlighting the fun facts and family. Buckingham should run a shorter survey allowing it to be easier for people to respond and take time to collect the responses. Once the credible responses are recorded, Buckingham can then move forward in validating the price point measurements upon being done with the analysis in the first data survey. If the results show net profit after fixed and variable costs, it could hold a huge launch in selling season tickets for next fall. Bob Cortez, President and General Manager, is right when it came to Buckingham needing to work with the artist to finish the logo design, otherwise no publicity campaign could start. It’s important to create and start some kind of brand awareness for the Nor’easters among the locals to even have the chance in selling tickets.

Problem Statement

The Nor’easters are a new small town Class A minor league baseball team. The owner, Jimmy Mercante, would like for the team to bring in enough revenue from ticket and concession sales to cover the operating expenses for the first year and break-even. However, the city of Springfield is experiencing a trend of manufacturing job losses, and consequently a drop in the average income of its residents. It is then the Marketing Director, Larry Buckingham for the Nor’easters, who has to carefully design a price plan that would entice the residents to follow and enjoy minor league games over college games. The problem is setting up a price point for individual games and season ticket prices that are not to expensive to attract price conscious Springfield residents. If the prices are too high residents will either not go to games or they will not spend the extra money on food and merchandise and as a result would be not bringing in the needed revenue for the team.

Situational Analysis

To better understand the problem, it is necessary to take a better look at the market situation that might affect a minor league team in a small town like Springfield.

SWOT Analysis

The SWOT analysis is used to identify the internal strengths and weaknesses of being a Class A minor league team and external opportunities and threats for operating in a remote location in a low income area. The initial level looks at empirical data available from league sports association surveys, stories by sports reporters in local newspapers, and informal suggestions provided by managers of similar teams in other cities.

Nor’easters pricing SWOT:[pic]

Strengths

It is evident from news reports and existing research surveys that even though Springfield is a new team, in general it...
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