Describe the economic factors and concepts involved with estimating or gauging a
ID: 391838 • Letter: D
Question
Describe the economic factors and concepts involved with estimating or gauging a population’s potential of attending a specific sporting event. From an economist’s viewpoint, can fan choice and purchasing behavior be predicted? How can this information help those in charge of filling seats exert influence on the fans’ choices in order to maximize team’s profits? Describe the economic factors and concepts involved with estimating or gauging a population’s potential of attending a specific sporting event. From an economist’s viewpoint, can fan choice and purchasing behavior be predicted? How can this information help those in charge of filling seats exert influence on the fans’ choices in order to maximize team’s profits?Explanation / Answer
The first economic factor is the purchasing power of the audience or population that can attend the specific sporting event. A higher purchasing power, means there is a higher probability of the people attending the event. Another variant of the purchasing power is the disposable income earned by the people. A higher disposable income will make higher probability of the people attending the event. The next economic factor is the price of the tickets to attend the event. A higher price, will keep people such as unemployed person, students and other discouraged individuals at bay, as they can cannot pay the high price. The next economic factor is the employment and the types of jobs available to the people in the area. Here, the opportunity cost concept also plays a role. If people are at high end (high salary) jobs, then the opportunity cost of attending the event is very high, and these people would like to go for the job. Hence, sporting events should be planned on weekends so that these people with high income, can attend it. Besides, marginal concepts will also be used when somebody views it as an alternative of the entertainment. If marginal benefits are higher than the marginal cost, then these people will go for the sporting event.
Fan choice and purchasing behavior can be predicted, but it requires building of quantitative and qualitative data together. For example, a primary research is required among those who regularly attend the events or programs with questionnaire focused upon, their preferences, frequency of visits, paying capacity and when they choose if given the different alternatives. Here, the ordinal and ratio scaling technique should be used to get the right data. Once the data is populated, then it can be used to go for the multivariate analysis such as factor analysis and multiple regression model. It will help to identify the factors that are liked, indifferent as well as non-liked, by the consumers. It will build the model that can used to predict the fan choice and buying behavior. But, it must be complemented by the qualitative methods such as observation method, sales force opinion and Delphi method to get more accuracy in the prediction.
These information help in following ways to maximize the stated objectives.
1. Make a correct pricing decision and create different categories on the basis of price and other amenities so that each class of customer has the opportunity to come and enjoy the event.
2. Add benefits with the ticket so that people focused upon, the services, come to the event.
3. The preparation and implementation of customized and integrated marketing communication strategies that will target each customer segment differently so that the event becomes the best choice for them.
4. Bring star attraction as it brings fan following also as it helps to make loyal customers also.
Above decisions among the others on the basis of data and model, will maximize the profit.
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