Question

ulie Porucznik is the Chief Marketing Officer for a Major League Baseball team. The team has finished in the lower half of its division for the past five seasons. Attendance has been on the decline during this time, with an average attendance of 63% during the past season. There is an internal debate regarding ticket pricing. One group advocates keeping the prices at their current level, arguing that once the team starts discounting it is difficult to increase prices. Another group wants to offer deep discounts and even to give away many of the extra tickets to ensure a full stadium.

1. What should Julie do?

2. If the team starts discounting and giving away tickets, should the marketing department be worried that their current fans, who buy tickets at full price, will stop buying tickets at full price and wait to see if discounted tickets are available?

3. Is it worth discounting the tickets and the inherent risks that go along with that to create an exciting, sold-out atmosphere at the stadium?

Answer 1

(1): In this case Julie should consider offering deep discounts and give many of the extra tickets to ensure a full stadium. This is because the other alternative of keeping the prices at their current level does not have economic and financial rational given the current context. Because of the team’s poor run in the recent games attendance has been low and constantly on the decline and keeping the prices fixed at the current levels will not help to shore up the financials of the team in any manner.

(2): Yes, if the team starts discounting and giving away tickets the marketing department should certainly be worried that their current fans, who buy tickets at full price, will stop buying tickets at full price and wait to see if discounted tickets are available. However this should not be too much of a point of concern or a cause of bother given the current scenario. The focus should be on increasing the sales volume of the ticket even if the value is reduced for a short while. Once the team’s performance starts improving the marketing team will be able to attract more and more people who will be willing to pay full price for the tickets.

(3): Yes, it is worth discounting the tickets and the inherent risks that go along with that to create an exciting, sold-out atmosphere at the stadium. This is because people come for a live game just for the excitement and the live energy that is so tangible during a live game in a stadium. The risk is there but it is a calculated risk and certainly will stand the team in good stead in future once its performance witnesses an upswing.