Morehead State University
Dynamic Pricing: Is It a Smart Way to Generate Income for Small Market Collegiate Athletics?
Institution
Morehead State University
Faculty Advisor/ Mentor
Steven Chen; Kenneth Henderson
Abstract
Many sport marketers predict that future sport organizations will pervasively utilize dynamic pricing strategy, a method involving price changes based on different demands and occasions, to generate extra ticket revenues soon. This study examined whether dynamic pricing strategy can be well accepted and implemented at regional, small market collegiate athletic programs. Twenty college/university athletic directors and marketing managers of the (FCS) Football Championship Subdivision responded to a phone interview by expressing their perceptions toward the use of dynamic pricing. All respondents’ institutions were located in the Ohio Valley region and Mid-west. The interview questions addressed two key aspects: (1) the overall impression about the benefits and shortcomings of dynamic pricing, and (2) the willingness and support toward implementing the strategy. The qualitative information was gathered from late July to early October, 2012. In general, the results showed that the majority of respondents preferred the idea of adopting mini-series packages and different season ticket tiers over the use of dynamic pricing. Respondents expressed that changing the ticket prices frequently was cumbersome. They also did not perceive this strategy would bring excessive financial benefits. Although the marketing literature optimistically projects the popularity of dynamic pricing, respondents of this study sample seemed to reject this notion. In order to make the generalization concerning the applicability of dynamic pricing to all non-major conference athletic programs, future studies should be conducted by including a greater sample population and different geographic regions.
Dynamic Pricing: Is It a Smart Way to Generate Income for Small Market Collegiate Athletics?
Many sport marketers predict that future sport organizations will pervasively utilize dynamic pricing strategy, a method involving price changes based on different demands and occasions, to generate extra ticket revenues soon. This study examined whether dynamic pricing strategy can be well accepted and implemented at regional, small market collegiate athletic programs. Twenty college/university athletic directors and marketing managers of the (FCS) Football Championship Subdivision responded to a phone interview by expressing their perceptions toward the use of dynamic pricing. All respondents’ institutions were located in the Ohio Valley region and Mid-west. The interview questions addressed two key aspects: (1) the overall impression about the benefits and shortcomings of dynamic pricing, and (2) the willingness and support toward implementing the strategy. The qualitative information was gathered from late July to early October, 2012. In general, the results showed that the majority of respondents preferred the idea of adopting mini-series packages and different season ticket tiers over the use of dynamic pricing. Respondents expressed that changing the ticket prices frequently was cumbersome. They also did not perceive this strategy would bring excessive financial benefits. Although the marketing literature optimistically projects the popularity of dynamic pricing, respondents of this study sample seemed to reject this notion. In order to make the generalization concerning the applicability of dynamic pricing to all non-major conference athletic programs, future studies should be conducted by including a greater sample population and different geographic regions.