Operation Management Buckingham

ISOM4820 – Assignment 1

1) Describe the problem Mr. Buckingham has.

The Nor’easters just opened their offices in Springfield and had not played a game yet. Owner and President and General Manager early anticipated their first season beginning in June 2009. The Nor’easters needed to sell plenty of season tickets for the team to thrive in Springfield. Ticket prices for the first season should be finalized before mid-June 2008, but the sports industry was new to Mr. Buckingham.

To design his tickets offers, Buckingham first had to find out what local baseball fans wanted and what they might be willing to pay to attend minor league games in Springfield. He needed a detailed, methodologically rigorous survey on which to build Nor’easters’ pricing strategy, and decided to move forward with a market research.

By research, Mr. Buckingham wanted to predict how many people would come to see the Nor’easters and how much to charge them. Demographics and social behavior of the team’s potential audience were needed.  After getting in contact with marketing directors of other well-established minor league teams, issues involving the concession sales were found complex, which induced a gap in his professional background. Trade-offs were needed to be considered through his research.

2) What are the specific tradeoffs he faces in the problem?

There are subtle trade-offs between the pricing of tickets, the structuring of multiple-ticket packages, and the revenue yield from concessions.

3) What were the key findings of the survey?

For the survey, 625 responses were tabulated ultimately. As Mr. Buckingham stressed that the survey would contain only questions whose answers would affect actual decisions. Results of the majority of questions would contribute to the key findings. According to this, 60% of respondents are not baseball fans, more than 70% haven’t attended a professional baseball game in the past year. The attendance of a major-league game, a minor-league game and a college game are 24%, 17% and 21% respectively. More than 1/5  of respondents have ever purchase a season ticket for a sporting event. Near 40% would attend any of the game of a minor league baseball team in Springfield. More than 3/4 of respondents would be willing to pay for a grandstand seat over above a bleacher seat. Only 8% of respondents are not willing to contribute to the concession sales.