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11 Cards in this Set
- Front
- Back
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Pricing impacts demand, but how does it impact consumption?
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1. Consumption increases the likelihood of repeat purchase
2. Consumption leads to other revenue streams -Ex. If you buy tickets to a Red's game, you have to pay for parking, food, etc. |
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Sunk Cost Effect
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Getting the most out of your money
-Ex. Can buy 2 ski trips. Trip A = $100 and less fun. Trip B = $60 and more fun. MOst people will go on Trip A b/c even if they have less money, they have paid more for it and want to get their full money's worth. |
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Idea that when you pay with a debit card, it is not real as opposed to cash.
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Payment Method
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Timing of Payment
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Ex. Buying theather tickets 6 mo's in advance vs. 1 day before. If both people have the flu, the one who bought the ticket 6 mo's ago is less likely to go because of recentness of payment. It is not as important b/c they just did not recently purchase the tickets.
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Price Bundling
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Packaging items at one price.
-Ex. McDonald's extra value meal and Spring Break cruises. |
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Why do we see price bundling?
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It increases demand.
-Sometimes price bundling inhibits consumption b/c don't allocate funds to each item. |
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So what is a sports marketer to do about pricing? (Managerial Implications)
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1. Practice Yield Management- Ex. Overbook seats on airline and eRUPPtion Zone and Red's Games- standing room only
2. Staggering your payments -Ex. At health club 3. Psychologically linking payments to vendors- link cost to each event. -Ex. summer school = approx. $100/class for out of state. 4. Reducing consumption through pricing- using pricing to shift demand. -Ex. happy hour pricing; matinee prices at movies, etc. |
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Practice Yield Management
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Ex. Overbook seats on airline and eRUPPtion Zone and Red's Games- standing room only
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Staggering Your Payments
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Ex. At the health club, a person is more likely to go if they pay monthly vs. someone who pays for a year at a time b/c they see more value for their money if pay monthly and go during that month
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Psychologically Linking Payments to Vendors
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Link cost to each event
Ex. Summer school = approx. $100/class for out of state |
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Reducing Consumption through Pricing
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Using price to shift demand
Ex. Happy Hour Pricing and Matinee prices at movies, etc. |
