POST GRADUATE PROGRAMME IN MANAGEMENT

Sports Marketing & Management

The Springfield Nor'easters Case Analysis

Group No. – 11
Group Members:

Adya Prabha (2015IPM006)

Advitya (2015IPM005)
Mayuresh Chapate (2018PGP103)
Princy Parul (2018PGP278)
Sambit Halder (2018PGP321)
Sanchit Ameria (2015IPM094)
Shashwata Pal (2018PGP346)
1. What do you consider to be the key finding of the research survey? What did Buckingham
learn about a prospective customer profile, pricing and a single ticket vs season ticket pricing?

The most significant findings from the survey were as follows:

❏ Of the people who will attend a game, 21% (the highest percentage) are willing to attend
one game, and 11% (the next highest percentage) would consider a 5-game package.
❏ When it comes to paying for one game, 31% are willing to pay $10, 27% are willing to
pay $12, and 22% are willing to pay $14. This is important because the highest 3 percentage
of respondents is willing to pay $10 or more, which means that the Nor’easters could
comfortably charge more for one game.
❏ Those who would purchase a 5-game ticket package are willing to pay between $10 and
$12.
❏ 48% are willing to pay 10% more for grandstand seats over bleacher seats.
❏ Finally, the majority of respondents (66%) have children living with them.

2. What considerations should Nor’easter take into account in establishing a pricing policy?

Following considerations must be taken into account before establishing any pricing policy:

a) Target Audience- Die Hard Sports Fans of the Springfield Community and Families, Little
Leaguers, College Students and casual fans of the Hometown.
b) Other Potential Competitions- Pricing of seats must be at par with other entertainment
based entities like movies, Bowling and other sporting events. Pricing must be set in such
a way that it isn’t greater than Major League teams and also not lower than college level
leagues
c) Special Promotions- Promotional offers such as summer camps, Little League teams,
family days out and many such offers are to be associated with Group Ticket sales. Efforts
to secure the Corporate Sponsorships and sell Stadium banner Ads can reasonably keep the
ticket prices low.
d) Concession Sales- Featuring attractive offers for Snacks, Drinks, Baseball Caps,
Bobblehead Figures, Souvenirs,Team Yearbooks and arcade games.
e) Ticket Policy- People’s ability to pay ticket revenue must be appropriately calculated.
Product mix for tickets must be then provided according to either Season Tickets, Package
of 38 games, Package of 20 games, Package of 5 games, Group Tickets or Individual Ticket
sales.
3. Design a ticket pricing policy for Nor’easters?

DATA :

Nor’easters Home Games= 38 Games ; Springfield Population= 55338

Stadium Capacity= 3600 Seats ( 2000 Bleachers + 1600 Grandstand Seats)

Profit Margin from Concessions >39% ; Survey Response= 625 Respondents

Expected Full Season game Attendance= 90% per game

Stadium Rent= 100% Parking Revenue to Springfield college

According to the data received from Question 7 of Exhibit 5, the maximized expected coming
customers are 11,621 for single ticket, 6,087 for 5-game package, 2,767 for 20-game tickets and
1,107 for 38-game tickets. Since the local colleges charged between $5 and $6 per adult and $3
per child for general admission tickets, the ticket price should be charged higher than them but
lower than the price of major league games. It was decided to set the price at $10 for single ticket,
$8 for 5-game package, $6 for 20-game package and $4 for 38-game package. Even though we
found that we would have the maximize profit when we sell the individual tickets at $8, it was
decided to set it at $10. The reason is if we set both single tickets and 5-game package at the same
price, we will lose customers who are willing to pay $8 per ticket to attend 5 games and that will
directly affect our concession revenue.

In addition, according to the question 8 in the survey results (Exhibit 5 in case), only 13% people
are willing to pay $8 for a single ticket. However, 31% (the highest percentage) people are willing
to pay $10. Hence people actually value a single ticket more than $8 dollars.

Finally, we got our total cost at $1,005,879 ( Total Fixed Expenses $1,961,379 - [ Players Salaries
$ 887,000 + Bats and Balls $ 22,500 + Revenues From nearby colleges $ 21,000 + Sponsorship $
25,000] )
4. Do you think Nor’easters would break even in-near future (say one year), if not. What are
the options that they have?

In order to break even in the first year, we would recommend Nor’easters to set the price at $10
for single ticket, $8 for 5-game package, $6 for 20-game package, and $4 for 38-game package
now. Few years later, when this baseball team becomes more and more popular and the customer
base becomes stable, Nor’easters can further consider the different pricing between the bleachers
and grandstand seats.

A) Price Fixing and expected Revenue from Single Game Buyers:

80% are willing to spend between $10 - $14. Therefore Bleacher seats are charged
$10 while Grandstand seats are charged $12.

Revenue from tickets: For Bleacher seats(31%) i.e 3605 equals to $36050 and for
Grandstand Seats(49%) i.e. 5699 equals to $ 68388. Hence Total amounts to $
104,438.

Revenue from concession: 81% of 9304 buy concession at a margin of $2.34 per
person. Thus 7536* $ 2,34 = $ 17,634

B) Price Fixing and expected Revenue from 5 Game Buyers:

94% are willing to spend between $8 - $14. Therefore Bleacher seats are charged
$8 while Grandstand seats are charged $10.

Revenue from tickets: For Bleacher seats(19%) i.e 1157 equals to $ 9256 and for
Grandstand Seats(75%) i.e. 4570 equals to $ 45700. The Sum of these amounts to
$ 54,956*5 = $ 274780

Revenue from concession: 81% of 5910 buy concession at a margin of $2.34 per
person. Thus 4787* $ 2.34 * 5 = $ 56,008

C) Price Fixing and expected Revenue from 20 Game Buyers:

92% are willing to spend at least $6. Therefore Bleacher seats and Grandstand seats
both are charged $6.

Revenue from tickets: 0.92 * 2769* $6 = $ 305640

Revenue from concession: 81% of 2630 buy concession at a margin of $2.34 per
person. Thus 2130 * $ 2.34 * 20 = $ 99,684
D) Price Fixing and expected Revenue from 38 Game Buyers:

82% are willing to spend at least $4. Therefore Bleacher seats and Grandstand seats
both are charged $4.

Revenue from tickets: 0.82 * 1107 * $4 = $ 137940

Revenue from concession: 81% of 996 buy concession at a margin of $2.34 per
person. Thus 806 * $ 2.34 * 38 = $ 71,669

Total Expected Ticket Revenue Comes out to be $ 822798 while Total Expected
Concession Revenue is $ 244995. Hence Total Expected Revenue is $ 1,067,793

Total Cost Expense is $1,005,879. Hence Breakeven can be achieved

Nor’easters can further improve their Revenues by focusing on building a Loyal fan base. This
can be done by organising marketing events and implementing social media strategies to interact
with fans more actively. They can create their own team song to associate with audiences of
springfields