SPMA 2P27 MID TERM 2 STUDY GUIDE
Willingness to pay - Answer -Measures max amount of money a consumer or individual
will spend
Varies from person to person and market to market
Measurement - Answer -Subjective, not always straightforward
6 influential factors - Answer -Utility, income, preferences, market conditions, perceived
values, budget constraints
Utility - Answer -Perceived satisfaction individual gets from product
Income - Answer -Individual or household income level
Preferences - Answer -Person preferences, tastes, individual priorities
Market conditions - Answer -Availability of substitutes or alternatives in market
Perceived values - Answer -Product quality, brand reputation, convenience
Budget constraints - Answer -Amount of disposable income person has
Types of approaches - Answer -Questionnaires, market research, auctions
What is most common approach - Answer -Questionnaires
Questionnaires - Answer -Individuals respond to questions about their preferences and
willingness to pay
Contingent values - Answer -Hypothetical scenario, individuals are asked how much
they would pay for product
Discreet choice experiments - Answer -Presents respondent with pre-determined series
of choices between different product or service bundles, each with varying choices
Market research - Answer -Relying on external, secondary sources of info about market
Involved analysis of public data, historical sales data of products, review financial
statements
Auctions - Answer -Stimulates individuals purchasing a product or service
Ticket pricing - Answer -The dollar value for price admission to a sport event
, What influences ticket pricing - Answer -Supply: quantity of good producers are willing
and able to offer
Demand: quantity of goods consumers are willing and able to purchase
What is price elasticity - Answer -Change of price of supply and demand
What is rule of thumb of price of elasticity - Answer -If price elasticity is greater than 1,
lower price to increase revenue
If price elasticity is less than 1, increase price to increase revenue
Ticket pricing options - Answer -Revenue generation - only considers total revenue of
ticket sales
Profit generation - considers total revenue from ticket sales as well as costs
Market research part 2 more important - Answer -Systematic process of collecting,
analyzing, and interpreting info about market, matters because of revenue
Market research characteristic categories - Answer -Geographic, demographic,
behavioural, psychographic
Geographic - Answer -Physical location of customer
Demographic - Answer -Socioeconomic characteristics
Behavioural - Answer -Focused on customers knowledge, attitudes, uses, responses
Psychographics - Answer -Focused on personality traits, values, attitudes, interests,
lifestyle
Ticket pricing strategies - Answer -Value based pricing, competition based pricing,
cost-based pricing, loss leader, substitution effect
Value based pricing - Answer -Price determined by perceived benefit customer
associates product with
Competition based pricing - Answer -Price determined by what competitor charges
Cost based pricing - Answer -Price is computed based on a markup cost
Loss leader - Answer -Price at BEP cost or below
Substitution effect - Answer -Change of price of one seat affects sale of another
Advanced strategies ticket pricing - Answer -Variable ticket pricing - tickets vary game
in game out
Willingness to pay - Answer -Measures max amount of money a consumer or individual
will spend
Varies from person to person and market to market
Measurement - Answer -Subjective, not always straightforward
6 influential factors - Answer -Utility, income, preferences, market conditions, perceived
values, budget constraints
Utility - Answer -Perceived satisfaction individual gets from product
Income - Answer -Individual or household income level
Preferences - Answer -Person preferences, tastes, individual priorities
Market conditions - Answer -Availability of substitutes or alternatives in market
Perceived values - Answer -Product quality, brand reputation, convenience
Budget constraints - Answer -Amount of disposable income person has
Types of approaches - Answer -Questionnaires, market research, auctions
What is most common approach - Answer -Questionnaires
Questionnaires - Answer -Individuals respond to questions about their preferences and
willingness to pay
Contingent values - Answer -Hypothetical scenario, individuals are asked how much
they would pay for product
Discreet choice experiments - Answer -Presents respondent with pre-determined series
of choices between different product or service bundles, each with varying choices
Market research - Answer -Relying on external, secondary sources of info about market
Involved analysis of public data, historical sales data of products, review financial
statements
Auctions - Answer -Stimulates individuals purchasing a product or service
Ticket pricing - Answer -The dollar value for price admission to a sport event
, What influences ticket pricing - Answer -Supply: quantity of good producers are willing
and able to offer
Demand: quantity of goods consumers are willing and able to purchase
What is price elasticity - Answer -Change of price of supply and demand
What is rule of thumb of price of elasticity - Answer -If price elasticity is greater than 1,
lower price to increase revenue
If price elasticity is less than 1, increase price to increase revenue
Ticket pricing options - Answer -Revenue generation - only considers total revenue of
ticket sales
Profit generation - considers total revenue from ticket sales as well as costs
Market research part 2 more important - Answer -Systematic process of collecting,
analyzing, and interpreting info about market, matters because of revenue
Market research characteristic categories - Answer -Geographic, demographic,
behavioural, psychographic
Geographic - Answer -Physical location of customer
Demographic - Answer -Socioeconomic characteristics
Behavioural - Answer -Focused on customers knowledge, attitudes, uses, responses
Psychographics - Answer -Focused on personality traits, values, attitudes, interests,
lifestyle
Ticket pricing strategies - Answer -Value based pricing, competition based pricing,
cost-based pricing, loss leader, substitution effect
Value based pricing - Answer -Price determined by perceived benefit customer
associates product with
Competition based pricing - Answer -Price determined by what competitor charges
Cost based pricing - Answer -Price is computed based on a markup cost
Loss leader - Answer -Price at BEP cost or below
Substitution effect - Answer -Change of price of one seat affects sale of another
Advanced strategies ticket pricing - Answer -Variable ticket pricing - tickets vary game
in game out
