The Pricing Structure and Strategy in the Concert Industry Paper Example

Introduction

The pricing structure is an approach in services and products pricing which explains various discounts, prices, offers to depend on organization strategy and goals. The company growth and customer's perception can be affected by the price structure. They affect not only the bottom line but also the perception and brand image. According to Garden Beats Festivals, 2019 the first customer's tickets go for $108 per ticket, lazy bird $ 128 per ticket, for standard $148, very important people $ 178, for a bundle of five people $ 490 (per person at $98). Garden Beats Festivals 2019 has segmentation pricing structure based on the time the people buy the tickets and the number of people who buy tickets. This inspires individuals to buy their tickets earlier because they get them at a lower price, and they are penalized by getting them at higher prices if they wait at up to the last minute. This type of pricing structure helps different customers to get arrangements depending on their preference and depending on the living standards of an individual. It also encourages people to buy as a bundle because it is cheaper than buying an individual thus getting more customers and increasing productivity.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Pricing Strategy

According to Garden Beats Festivals, 2019 two types of pricing strategy are used. Pricing is the progression; its main aim is to provide a strategy that helps in maximizing the company revenue. The pricing can either break or make the event. If the prices are too low, the concert would be unprofitable, and it would be hard to make a healthy profit margin in the long term. High priced tickets can help in covering the cost and produce a good profit margin, but the problem comes to getting enough people to buy the tickets. The pricing strategy can help in pricing the event rights so that the goals and objectives of the concert can be made.

Premium pricing is one of the strategies used by Garden beats festivals in 2019. They sell the tickets more than the cost they are made. This is made by adding up all the cost of providing the concert and adding up the profit margin on the top of the cost so that it can represent the value given to the customers. Some of the cost includes the transaction cost is high in the concert industry. This is because the concerts reflect consumption of arts or social status. Every time consumer product is supposed to be of high quality and cheap, and that can be used in a short time. The concert transaction cost is relatively high. In the end, the cost becomes more than that of the film industry. Also, they have high quality services.

The second strategy is to yield management pricing. The company must benchmark other company prices rather than setting the ticket price depending on the customer value or company cost. If the company is not sure of the initial value of the service and not wanting too low at a price or too high, they must look at other companies that offer the same concerts to decide the price of the tickets. This strategy is simple because the customers would not think that the company offers the services are too expensive or cheap. This helps the company to offer prices that are reasonable to the market. These market pricing strategy helps the company to stay in the market and get the profit.

Comparison with Other Popular Artistes

The pricing of mosaic music series Japanese Breakfast venue in Esplanade by Phum Viphurit is $ 45 (Cat 2) and $32 (Cat 1) while Kodaline artist their pricing structure is $ 128 for standard and $138 for door sale. This differs with Garden Beats festivals 2019 pricing structure. Garden Beats festivals their prices are higher as compared to other artist prices. Both concerts offer Double Tier pricing structure. This limits the customer to choose according to their preference and social status. According to their pricing structure, they don't offer prices based on the time the people buy the tickets and the number of people who buy tickets provide a variable rate pricing structure such that customers can choose the type of ticket they need depending on preference. While in Garden Beats Festivals 2019 artist who perform more popular. They have different music styles such as RnB, indie, and electro. They are eco-heroes. Different people love different type of music. Having a different type of style presented many people could enjoy and that why their pricing differs. Kodaline and Esplanade are not that popular. Kodaline specializes in soaring, radio-ready guitar rock while esplanade uses the style of alternative indie fork. Their pricing is also dependent on how popular the artist is. The more popular the artist is the more prices on the tickets because they influence society.

Perspective of Pricing

The resale market, especially for live entertainment events such as concerts, have a long-interested economist. Concerts where superstars are performing, sell out due to the tickets resold for multiples of their original price in the secondary market. Tickets are resold in the secondary market multiple from initial because ticket prices are set lower the market dissipating level to interest a bigger crowd and develop a "buzz" that increases the demand. Fans of any artist are input into the value of the event; it's the duty of the promoters to distribute the tickets in such a way that they select fans that are most enthusiastic. Also, tickets are resold because people's plans and interest can change unexpectedly. According to Garden Beats Festivals, primary markets are irrelevant for people who attend the concert because the tickets must be distributed to people who value the concert most. If tickets flow to people who are willing to pay more for them, then the promoter cannot impact prices for people sitting the audience. The reason why the secondary market is mostly used in many concerts it is because fans who get tickets in the primary market holds them such that they would refuse to pay the secondary market price for the concert's tickets. Example promoters are incentivized to sell many tickets as possible to make so that they can pay for the cost of the concert and get profit. This makes them sell at low prices. But scalpers take advantage of those conditions buys those tickets and resell to the customers at a higher price to customers who value the concert most.

Recommendations

As a pricing manager of Unusual limited, there is two recommendation I could formulate concerning pricing strategy that would help in the company's profit improvement. Promotions and discounts are the first recommendations. The promotion can be in such a way that there is a low price on individuals who purchase the tickets first and those who buy them in the bundle. This inspires individuals to buy their tickets earlier because they get them at a lower price, and they are penalized by getting them at higher prices if they wait at up to the last minute. Due to this, there is an increment of productivity at the same time increasing the profit. Also, 10% discount should be given. People prefer buying tickets for discounted tickets because they are sure of saving a certain amount of money - second recommendation pricing. Before increasing or reducing the price, it is important to view our competitor's price so that they can match infracted competitor pricing. Having too low price or too high price than our competitors may send customers away. It is good always to know the prices offered by other companies before setting your price. It is important also to make sure that the quality of the services provided to the customers is good. This helps in increasing productivity as well as fulfilling customer's satisfaction.

Dynamic pricing is a retail and e-commerce strategy that uses variable pricing rather than a more typical fixed pricing. As data continue to be analyzed, ideal prices of the services are calculated. The time range at which the price of the services depends on the services provided and the business, and it can change as often from every hour to every day. The dynamic strategy can be used to improve productivity through a better balance of the demand and supply of certain locality. This includes the number of people who buy the products, the availability of the product or services and perishability. The demand and supply of some products or goods may differ depending on the geographical. But the demand for the product or services should be shifted away from low or high peaks so that it can fit the company or the organization product or the services supply. Due to this, there is a balance between the supply and demand the profitability is improved.