The Springfield Nor’easters Harvard Case Solution & Analysis

The Springfield Nor’easters Case Study Solution

Game half season package

In 38-game half season, the revenue generated from tickets priced 14, 12, 10, 8, 6 and 4 would be $4029, $2656, $1549, $974, $664 & $44. The company should price 38 game half season at $14, while the concession price should be $13.

Assumptions made in developing the pricing plan

The assumptions which are made during the preparation of pricing policy for each package type are as follows:

• Springfield 55338 residents are used to evaluate the number of people interested in attending the match.
• The revenue from tickets and concession sales are added in order to calculate the total revenues.
• The suggested price is determined for which, the higher revenues are generated.

Pricing varies by package type

The pricing varies for each package type because of the probabilities of people attending just one game, and subscribing to the 5 games, 20 games and 38 games packages. Also, the percentage represents the willingness of people for paying money to attend one game. Package of 5 games, 20 games and 38 games tend to vary in pricing policy due to different scenarios.

Breakeven in its first year

The breakeven point is calculated by deducting the total expenses comprising of:

• League dues.
• Staff salaries.
• Office expenses.
• Team travel.
• Market research and mailing list.
• Advertising sales and marketing.

All these operating expenses are amounted to $1051879. The company needs $1005879 to cover the fixed cost.The amount could be gathered from concession sales & ticket sales.

In addition to this, the revenue per person for one game would be $10, 5 games would be $8, half season would be $10 and full season would be $14. Also, the total revenues from selling tickets each year would be $1548357.24, and revenue from concession price per annum would be $1754768. The support from town and school would be $21000, and local business sponsorship would be $25000. The calculation results in total profit amounted to $2297246(Gallo, 2014).

Thoughts on profitability

Broadly, the company should utilize some social media strategies and marketing events to interact with audience in an active manner.It would help the company to build the loyal customer base. It should create fan pages to improve the communication and brand awareness, more frequently with audience.

By implementing different prices for the ticket and concession sales; the company would be able to generate profit and to cover the fixed cost.

Any future considerations on opportunities / challenges

The company can capture and explore the market opportunity of providing the transportation facility to its fans by running its own shuttle through the city. Also the local businesses including restaurants and hotels likely provide sponsor ships to the company, which could improve the financial performance of the company.The company would have more sponsors when it would successfully gather the larger audience.

In addition to this, there is a likelihood that the company develops economically in forthcoming years because of the availability of larger base of labor and low housing cost. It is expected that the employment opportunities would be increasing in future, including financial services and healthcare, which in turn would result in an increased residual income. Also the company has an opportunity of building a new stadium with the assistance of many sponsors.

In contrast to the market opportunity;the company could be threatened by the distressed economy in the city, due to which the people have insufficient income for attending the baseball events.The low rate of response depicts that people are less willing to attend these matches and are not interested in baseball games. The results of the survey shows that the people are interested in entertainment at homes and they opt for other entertainment options which includes: playing bowling and watching movies,and other sports events, which in turn would reduce the company’s profitability.

Another competitive threat is the fierce and rigorous competition in the market. Instead of attending baseball events at the stadium, they most likely prefer to play the bowling alleys and have lunch or dinner at  restaurants.  Also, the distance of Boston is only ninety miles west, which in turn drives the people to Boston to watch the Red Sox play in the World Series.(Martin, 2014).

Conclusion

The nor’easter is the Class A of minor league baseball team situated in Massachusetts. It always contemplates to provide an affordable and memorable experiences to its fans. The research survey reveals that only 38% audience are the baseball fan and 60% are not.The median income of the Springfield residents is $31046, Springfield singles comprises 25% of women and men under age 65 live alone, and 25% Springfield families live under the poverty line. The company would need $1005879 to cover the fixed cost.The amount should be generated from ticket sales and concessions.

Appendix A – Pricing Recommendation

Appendix B – SWOT Analysis

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