Postgraduate Diploma in Sport and Recreation Management

Sport and Recreation Strategic Marketing

SPRM6002/2055/L01
LESSON 10
§ Retail Pricing
§ Digital Retailing
§ Sustainable Marketing
 PRICING
§ Price is a amount of money charged for a
product or a service

§ Price influences revenue

§ Price is a crucial element in the marketing

mix

§ Price can be easily changed and

communicated

§ Price is highly visible

§ For product, it is called as ‘price’, For

service, it may be called ‘fee’, ‘fare’,
‘charge’, etc.

§ Price is never far from consumer’s mind!

 VALUE VS PRICE
§ The price of a product/ service is determined by a list of factors
including those driven by human characteristics and emotions such
as fear and greed.

§ Value is what a customer perceives the product or service is worth

to them.

The value of the product varies:

q From person to person
q From place to place
q From time to time
 VALUE VS PRICE
Values are determined by :
§ Quality - material, taste, durability, comfort

§ Functional characteristics

§ Appearance – culture, race, age

§ Convenience – location, delivery, payment

§ Security – airline, house, vehicle

§ Availability – limited edition, mass product

§ Timing – season, weekday/weekend, AM/PM

*Marketers have to recognize these values and attempt to explain

the connections.
PRICING STRATEGY
 PRICING STRATEGY
Sport marketers must consider internal and external factors before
setting the price - Including competitor’s strategies and prices, the
overall marketing strategy and mix, and the nature of the market
and is there any demand.

Major Pricing Strategies:

§ “Customer Value – Based” Pricing

§ “Cost – Based” Pricing

§ “Competition – Based” Pricing

 PRICING STRATEGY
Customer Value-Based Pricing
§ Setting price based on buyer’s perceptions of value rather than
the seller’s cost

§ “Cognitive Biases: Pricing Biases”

https://youtu.be/roRIPM3i0ZM
Cost-Based Pricing
§ Setting price based on the costs for production, distributing and
selling the produce plus a fair rate of return for effort and risk
 PRICING STRATEGY

There are 2 types of customer value-based pricing:

Good-Value Pricing
§ Offering just the right combination of quality and good service at a fair price
§ Introducing less-expensive versions of established, brand-name products

Value-Added Pricing
§ Attaching value-added features and services to differentiate the companies offers
and thus supporting higher prices
§ Result: Customers are motivated not by price but by what they get for what they pay
 PRICING STRATEGY
Examples:
Good-Value Pricing

Value-Added Pricing
 PRICING STRATEGY
Cost-Based Pricing
§ Fixed Costs: Costs that do not vary with production or sales level, such
as rent.
§ Variable Costs: Costs vary directly with the level of production, such as
raw materials.
§ Total Cost: The sum of the fixed and variable costs for any given level of
production.

* Bottom line: A business need to charge a price that will at least cover the
total production costs at a given level of production.
 PRICING STRATEGY
Cost-Based Pricing
Pricing and Costs:

1. Costs at different levels of production:

• Management needs to know how it costs vary with different levels
of production.

2. Costs as a function of production experience (Average cost):

• Experience curve: The drop in the average per-unit production cost
that comes with accumulated production experience.

3. Costs-plus pricing:
• Adding a standard markup to the cost of the product.

4. Break-even analysis and target profit pricing:

• Setting price to break even on the costs of making and marketing a
product or setting price to make a target return of profit.
PRICING STRATEGY
PRICING STRATEGY
PRICING STRATEGY
PRICING STRATEGY
PRICING STRATEGY
PRICING STRATEGY
 SUPPLY CHAIN

SUPPLY CHAIN

1. An effective SUPPLY CHAIN is the alignment of companies that bring products

or services to market.

2. Effectiveness of SUPPLY CHAIN affects the price of a product.

3. The SUPPLY CHAIN not only includes the manufacturer and suppliers, but
also warehouses, retailers, and customers.
 SUPPLY CHAIN
CHANNEL PARTICIPANTS
WHOLESALERS

§ A WHOLESALER is an organisation or individual acting as the middle step between

a producer and a retailer.

Is WHOLESALER = DISTRIBUTOR?

§ WHOLESALERS buy a large quantity of products directly from DISTRIBUTORS.

RETAILERS

§ RETAILERS are the organisation and individuals involved in the final sale of a
product or service to a consumer.

E.g. Shopping centres, sport stadiums, factory outlets, brand’s e-commerce

websites or APP’s.
SUPPLY CHAIN
DIGITAL RETAILING
 DIGITAL RETAILING

Omnichannel -- also spelled omni-channel -- is a ”multichannel approach” to sales that seeks to provide
customers with a “seamless shopping experience”, whether they're shopping online from a desktop or
mobile device, by telephone, or in a brick-and-mortar store.

An omnichannel approach means there's integration between distribution, promotion and

communication channels on the back end.
DIGITAL RETAILING
DIGITAL RETAILING
DIGITAL RETAILING
SUSTAINABLE MAKETING
SUSTAINABLE MAKETING
SUSTAINABLE MAKETING
 SUSTAINABLE MAKETING

CASE STUDY

https://thesportsedit.com/blogs/news/top-5-sustainable-activewear-brands-at-the-sports-edit
 SUSTAINABLE MAKETING

CASE STUDY

YOUR TASKS:

1. FIND OUT WHICH ONE IS THE MOST SUSTAINABLE BRAND IN YOUR

OPINIONS

2. EXPLAIN WHY TO THE CLASS

3. HOW WOULD YOU MARKET “THAT” BRAND IN HONG KONG MARKET

(20MIN. GROUP DISCUSSION / 7MIN. PRESENATION)