1. What are the tradeoffs that Williamson faces?

The tradeoffs that Paul Williamson faces, being the Head of Ticketing for the

LOCOG and manager of a magnificent event like London 2012 Olympic Games, are

multiple. Specifically, he is responsible for managing ticket revenues, attendance, and

perceptions. In a period of 18 months before the tickets go on sale, Williamson and his team

face a challenge to meet the above mentioned responsibilities. With extensive experience in

sporting events, he was selected to develop price policies and distribute 7.9 million tickets,

with up to 800,000 spectators per day.

In the first place, in regards to managing revenue, as the Head of Ticketing for the

LOCOG, he took as an example of success: Sydney Olympic Games; however, in order to

avoid shortcomings, he analyzed the ones made on Athens and Beijing Olympic Games.

They must sell about 7.9 million tickets for events in a wide range of sports and in various

locations. Unfortunately, there are two obstacles: the first related to the global financial

crisis in the world, which can cause a negative impact on ticket sales and the second is that

tickets will sell online for the first time. In order to maximize revenue, Williamson should

put an attractive price to the target market segmented on the sport of interest of the person.

Equally important, is the tactic Williamson will handle assistance. When tickets for

the events are sold, the work does not finish there. Within the marketing strategy should be

considered a critical factor called "empty seats". The best example that can is Beijing

Olympic Games, where good number events were sold out, but the buyers of these tickets

did not attend the event. To put it differently, the empty chairs does not mean tickets were

not sold; it means that the buyer of the ticket did not use it. "First, you have to get people to

buy the tickets. Second, you get those who have to purchase tickets to use them. Neither of

these is a trivial task". Indeed, the revenue from the sale of tickets will be high and

contribute to the events profit; however, public relations are another important factor to the
LONDON OLYMPICS-GROUP 2 2

International Olympic Committee, and poor attendance and damage of public relations. On

the other hand, Williamson should also consider the kind of public that should be attracted

to each of the multiple events. Attract the target audience means ensuring that the ticket is

sold to people interested in the particular sport each event. When distributing the tickets,

the percentage of sales corresponding to a type of buyer should be analyzed. The different

types of public on these kind of events are: public of the city, public of the country,

European public, world public, politicians, journalists, media personnel, among others. In

other words, the challenge of the distribution is to analyze the effects that can emerge,

subject to whom the tickets were sold.

Furthermore, pertain to managing perceptions; Paul Williamson must achieve

popularity in all events for 2012 London Olympic Games, since the event is best known as

"Everybody's Games". To accomplish it, his purpose was to incorporate the local population

and thought of one strategy that could give a special discount to local public. Nevertheless,

the EU requires that the discount should be granted in equality to all countries of the EU;

therefore, it cannot offer a discount only to local community. Given the characteristics of

each sport, some are more popular than others; thus, their demand is higher. For example,

the most popular sports are: gymnasia, athletics, and swimming, among others. However,

the Olympic Games consist of 26 different sports, which many people do not about their

existence. "We are dealing with 26 valid sports. This doesnt mean we have to price them

all the same, but we cant price in such a way particularly as to disrespect any sport.

Therefore, the price strategy plays an important roll in having or not having turnouts,

while complying with the previously stated law limitations. Additionally, another problem

that arises in all events around the world is the resell. There are people who buy tickets to

use them as business and make profit, instead to use them to attend the event. Therefore,
LONDON OLYMPICS-GROUP 2 3

Williamson advertised a campaign to prosecute such persons who want to resell original or

fake, distinct than to LOCOG.

All things considered, Paul Williamson has a big challenge to face as the Head of

Ticketing where his skills and experience should seek a balance between manage revenues,

manage attendance and ticket distribution, and local perceptions.

2. How might his pricing strategies vary by sport?

First, pricing is not an easy initiative to produce. One has to consider various factors in

order to produce a successful outcome. Ideally, establishing pricing objectives and related

strategies supports or rather is a framework for one to produce primarily (Marshall &

Johnston, 2015). As for London Olympics a strategy and objective have been documented.

Williamson realized that it would be a challenge to finalize on the pricing of the tickets.

In regards to the pricing strategies by sport. The results from Exhibit 7 tickets

available for sale, by sport, for the 2012 games reflects, a total of 300 events with a total

of 7,961,000 million in total. Based on the records for prior cities i.e. United Kingdom and

Europe where the games were hosted, the numbers reflect the below. Basically, out of all

five categories the order of price ranges from left to right with the first category being the

highest are: 2008 European Cup Football Finals, Wimbledon Tennis center court,

English Premier League Football Arsenal, English Premier League Football West Ham

United, Fulham, England Football Friendly and England Under-221 Football.

According to exhibit 8 diagram, the results prove that indoor track cycling and

swimming are common for London and Australia, and athletics for all three. However,

athletics won 6 medals for Greece and Australia whilst the number of medals for London is

10. This diagram is not a high pointer in determining the sport favorite but can be part of
LONDON OLYMPICS-GROUP 2 4

the analysis for the variation of sports to some extent which determines great athletes for

each city for the various categories.

As for London, they may need to consider these results are areas of favorable tickets

to purchase. However, this does not mean people will be more intrigue by these sports as

for London the favorite most attractive and watched sports is football. However, globally,

the favorite and most appealing sports are swimming and gymnastics but also to consider a

favorite or popular athlete by which that sport will be deemed high in the list as well.

In addition, exhibit 9 provides supplemental historic ticket pricing for select

Olympic events data which reflects that swimming being the top sport in pricing, then

gymnastic, athletics, indoor track, wrestling and table tennis.

Realistically, the pricing strategy will consider all these factors prior to reaching a

favorable outcome. In Londons case, swimming, gymnastics, football, indoor track

cycling, athletics, wrestling and others are part of the logically trend that will drive the

variations in pricing.

Basically, the pricing strategies will vary by prior results and the most attractive, and

favorite sports for London, and the majority of Europe, then the rest of the world.

Therefore, with all these known factors I suggest the order of pricing for each sport to be as

shown below. In add the calculation that can be effective and cost-friendly, and my be a

recommended decision apart from utilizing prior historical pricing is the Average-Cost

Pricing which is identifying all costs associated with an offering to come up with what the

average cost of a single unit might be i.e. all costs divided by the total number of units =

average cost of a single unit (Marshall & Johnston, 2015).

According to Marshall & Johnston, in order for this figure to be determined, the

calculation requires the prediction on how much of the offering will be demanded i.e. total
LONDON OLYMPICS-GROUP 2 5

costs divided by the forecasted total number of units = the average cost of a single unit. If

deemed appropriate, the marketing manager can add a profit margin to the total cost figures

to calculate a likely price for a unit of the offering, and the results will reveal the average

price of a single unit based on the profit margin i.e. the total profit margin divided by the

forecasted total number of units (Marshall & Johnston, 2015).

Swimming

Gymnastics

Athletics

Indoor Track

Wrestling

Table Tennis

Others

3. For the London Olympics, what would the characteristics of a good pricing
strategy be?

Paul Williamson, head of ticketing for the Olympic Games faced a huge hurdle in how

to offer 8 million tickets for 26 different events while, making the tickets so affordable

anyone from large corporations to the lower income steel workers could purchase them.

Many of the decisions on how to sell the tickets and price them were already decided.

According to Gourville,

A total of 7.9 million tickets were available

International and domestic sponsors, 205 National Olympic Committee, and

International Federations could place requests for tickets (quantity & price) and they

would receive only 25% of all the tickets

LONDON OLYMPICS-GROUP 2 6

General Public could place similar requests

Remaining tickets would be offered for direct sale
Left over tickets would be sold at box office sites

The main goal became how to sell tickets to lesser known events like table tennis and

archery but have the same turnout as swimming and gymnastics. What the committee

attempted first was pricing tiers. For example, if tickets are $30, $60, and $100 a person

might request four tickets in the $60 price tier and the committee promises that the seats for

the higher price tiers will be better viewing than each lower tier ticket value (Gourville,

2011). This strategy allowed for fans to place ticket requests through ballots. The ballots

allowed the committee to see the actual demand for tickets instead of anticipating the

demand for each tier. The immediate demand for each tier allowed the committee to price

point tickets and see which price tier has the most value and what sections should have the

most seats available.

Since the Olympic Games is held once every 4 years and is never in the same place

back to back the tickets to events become highly sought after. Price skimming should be the

primary point of sales when the tickets first come to market. All tickets for all events should

have an equal price which would be 50% more than the original tiered pricing. Allocating 4

million tickets priced 50% higher would create a frenzy of purchase potential. Since there

are a relative small number of tickets available at this time it makes them more attractive to

buy. The tickets would all sell above their original expected value because there is no other

competition in the market for the tickets. This would create immediate revenue for the

Olympic committee. Once the 4 million tickets sell or come close to 90% of being sold the

value of the tickets can drop to what their original face value would be. Not only would

more people be able to afford the face value but the new value of the tickets will look more
LONDON OLYMPICS-GROUP 2 7

appealing based on what the tickets was once priced at compared to the new price its

selling for in todays market. This creates a happy medium because the committee would

receive a higher return on the first 4 million tickets and also be able to sell the last 4 million

tickets, and the fans would have purchase power for tickets as well. In my opinion this

would create a better return on investment than basic set prices for all the tickets being sold.
Williamson decided to take a look at previous Olympic Games to use as a platform to

value tickets. This value pricing strategy was quickly adopted based on the 2000 games and

their ticket sales. There was little value placed on competitor based pricing because these

are the Olympics and not soccer only venues. The main sport in England is soccer and the

ticketing sales for those major games could not be comparable to Olympic venues such as

swimming and gymnastics. The price gap if compared would be drastically lower and show

little to no revenue because of lesser known Olympic events that sell very little tickets and

have an even smaller attendance. So the main goal despite having corporate sponsors and a

percentage of tickets available to them was to make this Everybodys Game. This concept

would make ticket purchasing affordable, fair, and fun.

Williamson stated, We are dealing with 26 different sports but this doesnt mean we

have to price them all the same, but we cant price in such a way as to disrespect any

particular sport. Many of the venues in London and the surrounding areas have drastic

economic diversity but all the citizens share a common love for sport. Tickets for the four

major events were based on past sales from Sydney, Athens, and Beijing. Swimming,

gymnastics, athletics and ceremonies were for sure sell outs and the average ticket price for

those events was around $56.50 for Tier 1, $34.30 for Tier II, and $18.00 for Tier III tickets

respectively (Gourville, 2011). The only drastic jump in ticket pricing was for the finals in

Athletics with an average ticket price of $441.00. The main event ticket prices were

affordable to everyone group in their respective tiers that attendance exceeded the prior two
LONDON OLYMPICS-GROUP 2 8

Olympics as well as gross revenue since this allowed for more tickets to be sold. The less

popular events such as Cycling, Table Tennis, and Wrestling matched their tickets prices for

their finals against regular ticket prices for the main 4 sports so consumers could see not

only regular game day events but final events as well.

4. What would you recommend to Williamson and the LOCOG?

For Williamson and LOCOG to increase sales and fill more seats they need to

modify their current purchasing system. When people applied for their tickets for 2012 they

submit their request but they do not know where their seating is located. Since the different

tiers are set already Williamson and LOCOG should have a floor plan that the individual

could see the section their tier is located in or even select their seats at that time. This could

also can justify for upselling the $100 seats are better than the $60 dollar seats. Having

visuals a person can see the seat location and an idea of the view they with have during the

game. In addition, the individuals will be able to purchase instantly and have a feeling of

security already knowing their section in advance.

Williamson and LOCOG should consider changing their release date for ticket sales.

If they shorten the timeframe for ticket sells this makes it more of a demand because they

build up the anticipation for release of tickets. Many people are excited and thrilled to have

an experience of attending the Olympics, therefore they are usually waiting for tickets to go

on sale and be the first ones to purchase. They would still end up buying flight and hotels

ahead of time if the plan to attend therefore the release date would not affect ticket sales. As

far as them having an issue with people purchasing and reselling for a higher price, they

can place restrictions on the tickets by including the name of the attendee when they

purchase and if they need to change the name they need to pay a fee for the change.
LONDON OLYMPICS-GROUP 2 9

Williamson and LOCOG should adjust prices to be more attractive to the target

market on the sport of interest to the individuals. The recommendation is for the events that

generate more revenue and crowd they should consider a different price strategy possibly

raise the price a little more than before creating a new standard. The pricing would not

necessarily affect the other sports being offended because there are other factors involved

such as the time the sport is played, the venue and how long the sport games last. For

example depending on the event or occasion price varies, such as the movies a manatee is

usually cheaper but for a food and wine festival ticket the day pass is more expensive than a

night pass. This means they can price accordingly without offending the other sports.

Williamson and LOCOG should also consider creating ticket packages which would

cover cost for the games offered while introducing individuals to a game they probably

would not normally attend but because it is included in their package they will decide to

attend the game. If they have various packages selection with enticing prices people would

choose this purchase because it is similar to a two for one deal. Williamson and LOCOG

could contemplate offering discounts for individuals but strategically plan the discounts

prior to releasing any pricing were they still make their projected profit while people feel

like they are receiving discount off their tickets. As far as filling more seating that sponsors

purchase and do not attend they could have more volunteers just as seat fillers, so when the

games are aired or viewed it seems like the seats are filled. When people from the outside

see it appears to be a big crowd making it more attractive to individuals. Williamson and

LOCOG have a key role they need to conquer and with the right tools and decisions making

process they can solve the problem.

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10

Reference
Gourville, John T., and Marco Bertini. "The London 2012 Olympic Games." Harvard
Business School Case 510-039, September 2009. (Revised February 2011.)

Marshall, G.W & Johnston, M.W (2015). Marketing Management (2nd e.d). McGraw-Hill

Education.