Due to illness, I had to cancel class tomorrow, so I thought I would use my blog for a virtual classroom.  Although intended for my class, anyone reading this is more than welcome to participate and add to the discussion. I’m looking forward to reading all of the replies to this post.

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The New York Times

The BUSI-252-01 Sport Marketing class is learning about sales and pricing in the sport industry. Last Friday, we talked about the different aspects of sales… how to be a good salesperson, different pricing strategies, and the actual cost a consumer pays to attend a sport event or participate in a sport activity.  I didn’t get to finish this discussion on Friday, so I thought I would complete that lecture here.

So… we talked about just how much a consumer actually pays to attend a game, play golf at the local course, go bowling and other sport-oriented activities. The class was broken up into groups with each group reviewing an assigned sport organization.  Their goal was to identify the different “packages” available by the organization as well as all other costs incurred by the consumer so they could experience the activity.  The organizations included in the project were as follows:

The students did a great job at identifying just how much it would cost an individual to travel from Buckhannon, West Virginia to their specified destination and spend the weekend to participate and experience the sport activity.  Some of their estimates ran into the $1,000’s.

Unfortunately, we ran out of time, and I didn’t really get to explain why it is so important to identify the actual cost a consumer pays to do these sport activities. As mentioned multiple times in class, sport is a highly emotional product… it’s probably safe to say it is the most emotionally involved product there is.  Which is why sport organizations need to concentrate on building value in the eyes of the consumer.

According to the Business Dictionary, value, in the marketing context, can be defined as “the extent to which a good or service is perceived by its customer to meet his or her needs or wants, measured by customer’s willingness to pay for it. It commonly depends more on the customer’s perception of the worth of the product than on its intrinsic value.”

The first caveat to this is in regards to the cost… it’s not just the cost of the ticket, green fees or gym membership that the sport marketer has to consider.  It’s all those other costs that the consumer incurs in order to watch the game, play a few rounds of golf or workout at the gym.  The ticket to the football game may cost $25, but then you have to include the cost of gas, parking, snacks during the game, dinner after the game and any other incidentals.  That $25 ticket can easily turn into $150 to $200 or even more.

I know what you’re thinking…. “So what? We just charge $25 for the ticket. We can’t control all the other expenses. What does that have to do with my sport marketing strategies?”

Here’s caveat #2… the consumer’s perception of the worth of the product will influence his willingness to pay for the product.  More easily put… the customer expects more out of the product than they pay for. In the customer’s mind, he didn’t pay $25 for a football ticket, he spent $200.  A golf package at Pebble Beach might be $2,500, but the customer spent $5,000 to spend the weekend golfing with his buddies, so he expects an experience worth $5,000.

This is why understanding the pricing concept is so important in the sport industry… for sport marketers as well as sport managers. This is also what makes your job so hard. Somehow, you have to give that football fan an experience that is worth $200.  If you give him a $25 dollar experience, he will have low customer-perceived value.  Do you know what that means?  He’s not coming back for another game. You have let him down, he’s disappointing and disgruntled.  You didn’t meet his expectations, even though he paid the full ticket price.

Just how big of deal is this? Consider one single game… the Super Bowl.  During last month’s big game, it was estimated that US consumers spent over $14 billion dollars on Super Bowl related expenses.  The total cost for fans to experience the Super Bowl is extremely high, and their expectations are even higher.  As a result, you get the fabulous halftime show and all the extras during the game.  Even fans watching the game on TV have high expectations of a true sport experience creating extra work for the networks as well as advertisers creating those highly expensive Super Bowl commercials.

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So here’s my challenge to my BUSI-252-01 Sport Marketing students… return to one of the sport organizations that we looked at on Friday (listed above). Reply to my post below with the following….

  1. Provide a couple of pricing packages available.
  2. Discuss how these successful sport organizations exceed the customer’s expectations in order to build value in the eyes of the consumer. It may be in the venue, fan engagement events, the actual (core) product, augmented products, customer service, or even something to do with the facility such as lighting, music, colors, etc.
  3. Be sure to link to the website where you found your information.

To any non-student visitors, I hope you gain some knowledge from this post, and I encourage you to join in on the discussion.  To my students… extra credit opportunity… don’t pass it up. 🙂

Class dismissed,  pc