I work in the Marketing Department. My coworker and I have a joke about everyone being a marketing expert. We get all sorts of unsolicited advice from people of all backgrounds and expertise. They have all been marketed to throughout their lives so they have now become marketing experts. After these experts give their advice and walk away we crack jokes about the 4 Ps marketing mix. If you don’t know the 4 Ps you don’t know diddly about marketing.
Neil Borden, the president of the American Marketing Association invented the term “marketing mix” back in 1953. The marketing mix is also known as the 4 Ps of Marketing, which stands for Product, Price, Place (think distribution), and Promotion. Decisions about these factors are made to develop and execute marketing plans. The approach has changed over time, and some modern day marketing professionals find this concept outdated, but I don’t! I find even today the 4 Ps are very helpful and that if you are good at marketing you can adapt them to the Internet Age and be successful.
I think of the 4 Ps as the foundation. If you don’t have the 4 Ps figured out, you don’t have a good basis for a marketing strategy. Today let’s focus on Price out of the 4 Ps. Pricing is one of the most important elements in the marketing mix. It is the only element that doesn’t have a cost associated, so essentially it holds up the other 3 Ps because they are associated with expenses. Pricing isn’t always easy to figure out. It must reflect supply and demand, and take into consideration the marketplace. If you choose the wrong price it could be catastrophic to your organization and cause a loss of sales.
Here are the main factors I consider when pricing my event and concert tickets:
1. Costs – Fixed and variable costs are important when determining a pricing strategy. I usually consider the breakeven formula and then think about margins I’d like to see. Concert tickets used to be considered “loss leaders” for most casinos, but we don’t consider it that way at my company.
2. Competition – What is my competition doing? Am I competing with other events and concerts at the same time for ticket buyers? Are we competing for customers with limited purchasing power?
3. Positioning – What is my position in the market place? Am I trying to be the best price? What will the market bear for the product and the quality I’m offering? Can I use price for differentiation? Is my quality so high I can charge more?
4. Customers – Are my customers willing to pay the price? If they pay the price will they still come and spend money at the casino or in the restaurants? If I price the tickets too high, they won’t buy tickets, or they will buy tickets and nothing else. We really want to encourage people to gamble and eat at our restaurants so we don’t want to price our customers out of the market.
5. Company – What is our company trying to do with this event? If it is an event for Casino VIPs and there are very few retail tickets I will consider that in my pricing decisions. When it comes to special events and concerts Casino VIPs are the most important factor. Are there other benefits that might encourage those customers to patronize our casino? For example, if they could use their player rewards card points to buy concert tickets, would that help the company? How many points equal a decent price that we could also charge retail?
It is important to look at all the factors. Price is a reflection of the value of your product, in my case special event and concert tickets. Next time you purchase a special event or concert ticket take a minute and think about the factors that may have gone into the price for the ticket. It will really open your eyes to a new level of marketing strategy.
Internet Age Approach: Rewrite the Ps of marketing – The five Ps of marketing