The Nor’easters are a new minor league baseball team whose first season will begin in about a year and a half. Larry Buckingham has been tasked with creating a pricing strategy for tickets, as well as taking care of the other marketing needs of the team

1. Executive Summary
The Nor’easters are a new minor league baseball team whose first season will begin in about
a year and a half. Larry Buckingham has beentasked with creating apricing strategy for tickets, as
well as taking care of the other marketing needs of the team. He has many factors he needs to
consider as he creates his pricing strategy, including the following:
 Springfield has aminor league hockey team that is threatening toleave because they
cannot sale enough season tickets.
 Springfield residents have a median income of $31,046, which means they do not
necessarily have a lot of extra money to spend. However, Springfield is starting to
experience some growth with many entrepreneurs, financial organizations, and health
organizations moving to the area.
 From his research, Larry knows more than half of the team’s revenue may have to
come from ads and concession sales. However, to have strong concession sales, he
must have solid ticket sales.
 His manager, Jimmy Mercante, wants to break even in the team’s first year.
This analysis will cover the issues Larry faces ashe creates his pricing strategy; the important
results he needs to consider from the survey he sent; what pricing strategy he should implement for
the Nor’easters and why; and what he can do to break even in the first year. This analysis will also
recommend that Larry implement a fair pricing strategy that is not too high it turns people away
from events, but is not too low that the Nor’easters can’t make a profit. It will recommend that
Larry markets to families because this is the market that is most likely to come to games and buy
items at the concession stands. Finally, it will recommend that Larry gets businesses around the area
to purchase several ads because currently there is a small chance that he will have the strong ticket
sales he needs to break even in the first year.

2. Analysis of the Nor’easters and Their Pricing Strategy
Larry Buckingham has many challenges facing him as he tries tocreate apricing strategy for
the Springfield Nor’easters. To better figure out his pricing strategy, he utilized secondary research
from the League Sports Association; however, this research applied toboth major and minor league
teams, so he decided to do his own primary research to better understand the city where the
Nor’easters will play. Larry knew he had to collect the right data because a minor league hockey
team was also threatening to leave Springfield if they did not sale more tickets. Larry knew he
needed this primary survey information to better analyze who would be willing to come to the
games and how much they would be willing to pay. To develop the survey, he talked to his
equivalents at other minor league teams. He focused onhow these teams generated revenue so he
would better know what to ask on his survey. Once he had developed the survey, he sent it through
a pretest to see how he could better ask the questions to improve responses.
He bought mailing lists from the Springfield census and from four sports-related
organizations in Springfield. He got a random sample of the names in the database for each. He sent
out 10,000surveys and received 625 responses. Overall, Larry felt the “respondent characteristics
were fairly representative of the Springfield market” (page 3181
). The most significant findings from
the survey were as follows:
 Of the people who will attend a game, 21% (the highest percentage) are willing to
attend one game, and 11% (the next highest percentage) would consider a 5-game
package.
 When it comes to paying for one game, 31% are willing to pay$10, 27%are willing
to pay $12, and 22% are willing to pay$14. This is important because the highest
1
Allpagereferences come from “TheSpringfield Nor’easters:Maximizing Revenues intheMinorLeagues”casestudy
in “Duke, McGraw-Hill Customized Text with cases.”

3. percentage of respondents is willing to pay $10 or more, which means that the
Nor’easters could comfortably charge more for one game.
 Those who would purchase a5-game ticket package arewilling to paybetween $10
and $12.
 48% are willing to pay 10% more for grandstand seats over bleacher seats.
 Finally, the majority of respondents (66%) have children living with them.
When establishing apricing policy, there are several important factors to consider. The first
is that there is currently another minor league team that is considering leaving Springfield because
they are not selling enough season tickets; in fact, they need to sell 300 or more season tickets for
the team toremain viable in Springfield. This could impact the Nor’easters as well, especially since in
the survey, respondents were more willing to buy single or5-game tickets over full-season tickets.
While they want to be aggressive with their pricing to make a profit, the Nor’easters also need to
keep in mind that currently Springfield does not have the richest population and many have to be
cautious of the money they spend. However, 60% of the population has families and many of these
families are active in little leagues; this group of people will be more likely to attend a game.
Springfield is also showing signs ofgrowth with several small businesses, entrepreneurs, and health
care and financial industries moving into the area, which could bea good sign for the Nor’easters’
advertising sales.
When creating the pricing strategy, there are two quotes to keep in mind:
“Most of the marketing directors emphasized the need to price seats on par with the
competition—movies, bowling, other sporting events.” (page 316)
“Our prices should be high enough so that anyone who can and will pay a lot to
attend will do so. At the same time, anyone who really wants to come shouldn’t be
put off by what they perceive as too-high prices.” (page 318)

4. Based off the above information, Larry should implement the following ticket price options. Larry
should offer both bleacher and grandstand seating options for single and 5-game tickets. He should
do this because 48% of respondents said they were willing to pay 10% more for grandstand over
bleacher seating. For 5-game tickets, the higher percentage ofpeople were willing to paybetween
$10-$12; since the Nor’easters still need to make a profit, Larry can make 5-game tickets $12 for
grandstand and $10 for bleachers. Larry should offer 5-game tickets for bleacher seats because they
aren’t as comfortable as grandstand; however, they could offer an option for those who want to save
money but want to attend more than one game. He can make 20-game tickets $10 for grandstand
since the majority was willing to pay between $8-$10. He can make the full-season tickets $6 per
game for grandstand seats. He should charge $6 per game for season tickets because most people
were willing to paybetween $4-$8.Based on the lower level of interest in season tickets, it is better
to go significantly lower than the 20-game tickets to draw more people to these tickets, but not go
too low that they can’t be profitable. Finally, for single game tickets, he should charge $14 for
grandstand and $12 for bleacher seats. Most respondents were willing to pay at or above $10, but
since Larry wants to encourage season or multi-game ticket sales, he should charge the maximum
people are willing to pay for a single game ticket. (See the Appendix for the Pricing Chart.)
Larry also received good advice from his counterparts who suggested catering to families
and little leagues. When looking at prices for other minor league teams, it appeared that offering
group rates (that discounted by $2 or more) was an important strategy for minor league teams. To
account for these groups, he should create a birthday group, a little league group, and a regular
group set of tickets. He should charge $18per person for birthday and little league groups because
food will be provided so parents won’t have to leave to get food for a bunch of kids (though they
can still buy other concession items). These groups could use either the Birthday Party Zone or the
Family Section. For the regular group tickets, he should offer a $2 discount from the $14 tickets.

5. This is on par with the 5-game tickets and encourages people to bring 10 or more people to the
game. They would also have access to grandstand seats.
Based on the expenses and revenues calculations provided in the Appendix, Larry can
assume there is a slim possibility that the Nor’easters will break even in the first year. If they sold
only the highest priced tickets and sold out every game, they could break even from ticket sales
alone; however, based onthe troubles the minor league hockey team is having, it is very unlikely
they will be able to sellout every game. If they sold 75%of seats at full price every game, they would
still break even; however, if they sell less than 75% ofseats every game, they will have to rely heavily
on ad sales and concession sales to break even their first year. To break even, the Nor’easters will
have to use clever and aggressive marketing to get people to the games. This includes pushing
family-friendly events and their group rates. They need to make it the place for families and groups
to go any night of the week. Larry should focus on families because they will probably be the
majority of who comes to the games and the Nor’easters need to utilize this market.
Larry could also enhance the team’s relationships with the local businesses coming into
town. The casementions that several entrepreneurs, healthcare businesses, and financial businesses
have started coming to the area. If he can get them to buy more ads for an aggressive cost, this
could substantially help the revenues they bring in. He could also consider getting these businesses
to purchase group tickets for their companies. From the case, it didn’t sound like these were
necessarily big businesses, so group ticket rates could be very viable for these businesses.
Considering the troubles of the city, Larry should focus on enhancing ad and concession
sales as much as possible since tickets sales may not be very strong. He should also create events
that get families to the games since they have the best potential for attending games and buying
concession items while they’re there. If he can get this market and get them to buy concession items
while they’re there, he can increase the team’s chances of breaking even.

6. Appendix: Pricing Chart
Grandstand (all prices represent costs per game)
Cost per Ticket
Type of
Ticket
$6 $8 $10 $12 $14
Single
Ticket
X
5-game X
20-game
half-season
X
38-game
season
X
Bleachers (all prices represent costs per game)
Cost per Ticket
Type ofTicket $10 $12
Single Ticket X
5-game X
Extra Promotions
Promotions Cost Notes
Birthday
Party Zone
$18/person Includes food, drinks, and a
special visit from the team
mascot and two players
Little
League
Teams
$18/person Includes food, autographed
souvenirs from the team, a
visit from the mascot, and an
introduction of the team on
the field
Group
Tickets
$12/person Valid for groups of 10 or
more

7. Appendix: Expenses and Potential Revenues
Expenses
Fixed Expenses (excludes costs
covered by the major league)
$1,051,879
Mailings $3,800
Cost oflists (estimated) $680
Total $1,056,359
Revenues ifthe Nor'easters sold out
every game
Sold out bleachers at
full price (per game)
$24,000
Sold out grandstand
at full price (per
game)
$22,400
Total (per game) $46,400
Total for the full
season
$1,763,200
To break even 0
If Nor'easters sold 75% ofseats
Sold 1,500bleacher
seats per game (full
price)
$18,000
Sold 1,200
grandstand seats per
game (full price)
$21,000
Total per game $39,000
Total for season $1,482,000
To break even 0

8. If Nor'easters sold 50% ofseats
Sold 1,000bleacher
seats per game (full
price)
$12,000
Sold800 grandstand
seats per game (full
price)
$11,200
Total per game $23,200
Total for the season $881,600
To break even
(would need the
following from
concessions and
ads)
$174,759
If they sold 21% ofseats (based on
survey data)
Sold 420 bleacher
seats per game (full
price)
$5,040
Sold336 grandstand
seats per game (full
price)
$4,704
Total per game $9,744
Total for full season $370,272
To break even
(would need the
following from
concessions and
ads)
$686,087
Created By-
Sayan Basak
3rd
Year of 4 Year B.Tech
Department of Polymer Science and Technology,
University of Calcutta