Pricing is one of the most important components of the marketing mix. And, well, it should be. Pricing is crucial for driving a profit.
However, pricing can be one of the more stressful parts of planning an event. Even with a smart ticket pricing strategy, it is not always easy to determine which approach is right.
There are many different approaches to setting the right price for your event. Some of these include:
- Value-Based Pricing
Value-based pricing is a pricing strategy that sets prices primarily, but not exclusively, based on the perceived or estimated value of a product or service to the customer rather than based on the cost of the product or historical prices.
There are three key components to value-based pricing:
- perceived value
- the actual price
- the cost per ticket for the event.
In the value-based pricing model, customers compare perceived value and price. You use the cost per ticket to determine the baseline price for breaking even.
Organizers use a premium pricing strategy to highlight competitive advantages over similar events. A premium-priced product is priced higher than competitors and is quite effective as it creates a feeling that the event will be much better since it is expensive.
Some event organizers use penetration pricing to gain market share by pricing tickets at prices lower than those of the competitors. This is to get their event out in the market faster to raise consumer awareness and influence buyers to try the products.
The best example of this type of pricing model is when a company sets the price at $199 instead of $200. Even though the difference is almost nothing, consumers perceive $199 as being substantially cheaper than $200. This is also known as the “left-digit effect.”
If you are planning an event, pricing can be one less thing to worry about. If you want to know more about value-based pricing strategy, click the link below for more information.