Maximizing Revenues in the Minor Leagues

Q1. Review the case details Exhibit 5 “Survey Questionnaire and Response Distributions” and Exhibit 6 “Buckingham’s pricing matrix worksheet.” Complete filling in the pricing matrix worksheet for Exhibit 6 as taking the role of Larry Buckingham.

The Table 1 illustrates Larry Buckingham’s price matrix.

Table 1: Larry Buckingham’s price matrix

Ticket Type

$ Per Ticket

2

4

6

8

10

12

14

Single Ticket

0%

2%

5%

13%

31%

27%

22%

5-game Ticket

1%

2%

3%

19%

36%

34%

5%

20-game Ticket

1%

7%

23%

28%

25%

15%

1%

38-game Ticket

18%

26%

20%

14%

11%

10%

1%

Q2. Given the survey’s results, design a pricing scheme for the Springfield Nor’easters’ first season in order for a financial break-even. Explain how you derived the pricing scheme and list all assumptions made.

According to the survey’s results and data analysis, the pricing scheme we launched was as follows (Table 2): Table 2: Price Scheme

Game to attend

1-Game

5-Game

20-Game

38-Game

Price Per Game for Bleacher Seat

$10.00

$8.00

$6.00

$4.00

Price Per Game for Grandstand Stand

$11.00

$8.80

$6.60

$4.40

The analyzing process was based on some fundamental assumptions:

The attenders do not have specific preference between these 38 games.

The price they pay for admission do not relate to they consumption in premium ticket and concession.

The weighted average of concession represents the actual preference in concession consumption.

In terms of a price range, we select the median to simplify the analysis, for example, we use $13 to represent the price range $11-$15.

1. Price Determination

The first priority principle to determine the specific price is this kind of price is able to drive the maximal revenue to the Nor’easters, and the basic logic to design the prices for different segment is the same, so we just take the