Nor'easters Pricing Strategy

Finding the Optimal Prices: An Example of Case Data Analysis

An Approach: Finding optimal prices for various ticket packages

First, the following (Q8-Q11) are from Table 5:

Convert the numbers into cumulative numbers, shown in the table below:

The exhibit shows that, for example, in the first row:

27% willing to pay $12 + 22% willing to pay $14 = 49% willing to pay at least $12. And, to go a step further, 31%

willing to pay $10 + 27% willing to pay $12 + 22% willing to pay $14 = 80% willing to pay at least $10. And so on.

Through doing this cumulative analysis, students will note that, for example, that while 80% of consumers would be

willing to pay $10 or more for a single ticket, only 22% would be willing to spend the same amount (on a per-ticket

basis) for a 38-game season ticket.

Next, multiplying the figures in Exhibit TN-C by the ticket price points, students can obtain the potential ticket

revenue per game for each ticket type/price pair, as shown in Exhibit TN-D. (Note, for example, in the single-ticket

row that $8.00 = 80% X $10, etc.)

As a result, the optimal price for each ticket type is as follows: $10 per seat for a single ticket, $8 per seat for a 5-

game ticket, $7 per seat for a 20-game half-season ticket and $6 per seat for a 38-game full-season ticket.

Assumption made: Ticket purchases for different packages are independent, or the decision to

purchase