PRICING

ESSENTIAL QUESTION

How could emotions play a role in how much someone will pay to attend the concert on campus?

OVERVIEW

Although ticket pricing may seem different than setting the price of a new car, it’s actually very similar. Many of the same pricing strategies are used. Supply and demand also play a very important role when it comes to tangible items, such as a new car and intangible items, such as VIP tickets to the newest, up-and-coming music artist. Pricing usually happens behind the scenes and may seem insignificant. However, this could not be further from the truth. In fact, some marketing professionals consider pricing to be the most important aspect of the marketing mix. This is because the price you place on your product is the value of what you think it is worth. There is a fine line when it comes to pricing. If your product is priced too high, you could potentially lose consumers and your profits will decrease. However, if your product is priced too low, you may sell more products, but you could be missing out on potential profit and selling yourself short.

There are a number of pricing strategies, each of which can be successful depending on the situation. Before creating a pricing strategy, it is imperative to consider factors that affect the decision-making process.

Consumers - Know your market. Researching the spending habits of your target market can be extremely beneficial. For example, college students (ages 18 -21) are notorious for spending more money on food and entertainment than any other expense.

Competitors – Know your competitors. Do they offer the same or similar product at a lower price? Price matching with competitors is a common practice in order to maintain consumer loyalty. Not only should you research your target market, you should also research your competitors.

Economy – Know your product’s worth. Understanding the concept of supply and demand will go a long way when it comes to pricing strategies. Demand is essentially how much your product is desired by consumers. Supply is simply how much product can be provided to consumers. For example, a limited number of VIP tickets that are desired by a large number of consumers will sell at a higher price than a large number of general admission tickets.

These factors are constantly changing and it is important to reevaluate your pricing strategies on a regular basis in order to maximize profits.

OBJECTIVES

Upon completion of this lesson, students will develop the skills through which they may:

Understand how pricing strategies are used by various industries, including the entertainment industries to increase their sales.
Identify factors that affect event pricing.
Determine an acceptable ticket price through the application of pricing strategies for the event.

Click HERE to see the full lesson plan with activities.

STANDARDS

COMMON CORE STATE STANDARDS

Literacy Standards for Grades 6-12: History/Social Studies, Science and Technical Subjects

College and Career Readiness Reading Anchor Standards for Grades 6-12

Reading 1: Read closely to determine what the text says explicitly and to make logical inference from it; cite specific textual evidence when writing or speaking to support conclusions drawn from the text.

Reading 4: Interpret words and phrases as they are used in a text, including determining technical, connotative, and figurative meanings, and analyze how specific word choices shape meaning or tone.

Reading 7: Integrate and evaluate content presented in diverse media and formats, including visually and quantitatively, as well as in words.

Reading 10: Read and comprehend complex literary and informational texts independently and proficiently.

Literacy Standards for Grades 6-12: History/Social Studies, Science and Technical Subjects

College and Career Readiness Writing Anchor Standards for Grades 6-12

Writing 1: Write arguments to support claims in an analysis of substantive topics or texts using valid reasoning and relevant and sufficient evidence.

Writing 4: Produce clear and coherent writing in which the development, organization, and style are appropriate to task, purpose, and audience.

Writing 6: Use technology, including the Internet, to produce and publish writing and to interact and collaborate with others.

Writing 7: Conduct short as well as more sustained research projects based on focused questions, demonstrating understanding of the subject under investigation.

Writing 8: Gather relevant information from multiple print and digital sources, asses the credibility and accuracy of each source, and integrate the information while avoiding plagiarism.

Writing 10: Write routinely over extended time frames (time for research, reflection, and revision) and shorter time frames (a single sitting or a day or two) for a range of tasks, purposes, and audiences.

Literacy Standards for Grades 6-12: History/Social Studies, Science and Technical Subjects

College and Career Readiness Anchor Standards for Speaking and Listening for Grades 6-12

Literacy 1: Prepare for and participate effectively in a range of conversations and collaborations with diverse partners, building on others' ideas and expressing their own clearly and persuasively.

Literacy 2: Integrate and evaluate information presented in diverse media and formats, including visually, quantitatively, and orally.

Literacy 4: Present information, findings, and supporting evidence such that listeners can follow the line of reasoning and the organization, development, and style are appropriate to task, purpose, and audience.

Literacy 5: Make strategic use of digital media and visual displays of data to express information and enhance understanding of presentations.

Literacy 6: Adapt speech to a variety of contexts and communicative tasks, demonstrating command of formal English when indicated or appropriate.

Literacy Standards for Grades 6-12: History/Social Studies, Science and Technical Subjects

College and Career Readiness Anchor Standards for Language for Grades 6-12

Language 1: Demonstrate command of the conventions of standard English grammar and usage when writing or speaking.

Language 4: Determine or clarify the meaning of unknown and multiple-meaning words and phrases by using context clues, analyzing meaningful word parts, and consulting general and specialized reference materials, as appropriate.

Language 6: Acquire and use accurately a range of general academic and domain-specific words and phrases sufficient for reading, writing, speaking, and listening at the college and career readiness level; demonstrate independence in gathering vocabulary knowledge when encountering an unknown term important to comprehension or expression.

Standards for Mathematical Practice

MP1: Make sense of problems and preserve in solving them.

MP4: Model with mathematics.

MP6: Attend to precision

MARKETING COMMON CAREER TECHNICAL CORE STANDARDS

1. Describe the impact of economics, economics systems and entrepreneurship on marketing.

MK 1.1: Describe fundamental economic concepts used in marketing.

2. Implement marketing research to obtain and evaluate information for the creation of a marketing plan.

MK 2.1: Acquire a foundational knowledge of finance to understand its nature and scope.

5. Describe career opportunities and the means to achieve those opportunities in each of the Marketing Career Pathways.

MK 5.2: Develop personal traits to foster career advancement in marketing.

MK 5.6: Employ entrepreneurial discovery strategies in marketing.

7. Determine and adjust prices to maximize return while maintaining customer perception of value.

MK 7.1: Develop a foundational knowledge of pricing to understand its role in marketing.

NATIONAL STANDARDS FOR BUSINESS EDUCATION

Communication

I. Foundations of Communication – Communicate in a clear, complete, concise, correct, and courteous manner on personal and professional levels.

II. Societal Communication – apply basic social communication skills in personal and professional situations.

III. Workplace Communication – Incorporate appropriate leadership and supervision techniques, customer service strategies, and personal ethics standards to communicate effectively with various business constituencies.

IV. Technological Communication - Use technology to enhance the effectiveness of communication.

Computation

I. Mathematical Foundations - Apply basic mathematical operations to solve problems.

II. Number Relationships and Operations - Solve problems involving whole numbers, decimals, fractions, percents, ratios, averages, and proportions.

IV. Measurements - Use common international standards of measurement when solving problems.

VI. Problem-Solving Applications - Use mathematical procedures to analyze and solve business problems.

Economics

IV. Markets and Prices - Analyze the role of markets and prices in the U.S. economy.

Personal Finance

I. Personal Decision Making - Use a rational decision-making process as it applies to the roles of citizens, workers, and consumers.

Entrepreneurship

IV. Finance - Use the financial concepts and tools needed by the entrepreneur in making business decisions.

Information Technology

VI. Interactive Media - Use multimedia software to create media rich projects.

VIII. Information Retrieval and Synthesis – Gather, evaluate, use, cite, and disseminate information from technology sources.

Marketing

III. External Factors - Analyze the influence of external factors on marketing.

IV. The Marketing Mix - Analyze the elements of the marketing mix, their interrelationships, and how they are used in the marketing process.