Answer questions 1-3 below the Sports Sales Plan. 526 Part Six Extending the Sys
ID: 2813903 • Letter: A
Question
Answer questions 1-3 below the Sports Sales Plan. 526 Part Six Extending the System Your Turn A Sports Sales Plan The Buffalo Bisons are a Triple A affiliate of the Toronto Blue Jays. Players-on this team are one level below the Major Leagues where salaries can be huge. In the early days of the team's most re. cent incarnation, sell outs were very common. Filling almost 20,000 seats was fairly easy in the early 90's when the stadium was still new and the team was a perennial contender. In recent years the selling effort has become more difficult. Typical attendance is about 8,000 per game. (The following The VP of Operations, Michael Salamone, wants to design a sales incentive plan that will rein- vigorate the fan base for the Bisons. He recognizes several realities: 1. Three staff members serve as full-time sales agents. They have two major jobs: Sell tickets to games. Because the Bisons had a weak team last year, projections are that it will be difficult to exceed an average of 14,000 seats no matter what the plan design is. Further, architecture of the stadium makes sales above 12,000 more challenging because the seats are not as desirable. If last year is any indication, fans will buy less expensive seats then switch to premium seats that are unoccupied after the game begins. For PR reasons, staff look the other way when this occurs, unless late-arriving fans find their seats occupied The goal for Mike Salamone is to focus on sale of premium seats, thus reducing the "seat shifting" by fans buying standard and bleacher seats. Statistics for last year are as follows: Average Paid Occupancy Type of Seat Premium Standard Bleacher Cost to Fan Number of These Seats 6,000 13,000 1,900 $12 $ 9 1,500 6,000 500 b. Sell advertising-Advertising dollars come from placement of product information throughout the stadium, including on billboards, outfield fences, scoreboards, even dugout roofs. The dollar amount sold last year was $908,013 sales are dependent on team performance. Team performance drives (7 other Mike Sal- ticket sales. In turn, advertising depends on number of seats sold 3. The three staff members are heavily dependent on the total administrative team individuals) for ancillary activities in the selling event (e.g, they send out phone queries, provide follow-up information after the initial sales contact, etc.). amone wants to have a simple plan for advertising sales that rewards the total group ye motivates the three sales staff QUESTIONS 1. Of the above information, what is most important in your design of a sales incen for the three sales staff? How does this information affect your plan design? our book talks about unit rate plans. Which of these types of plan would you use for tickets. Which plan might be appropriate for sales of advertising? Why? tive pla 3. What factors influence the dollar amount you can pay for increases in ticket salesExplanation / Answer
1. The 3 sales staff have to focus on increase in sale of premium seats in stadium.
An incentive plan to be devised to increase average paid occupancy of premium tickets.
For every incremental ticket sale of premium ticket beyond 1,500 seats the sales staff can be given an incentive of $1 as reward.
2. In order to increase the total income generated from sale of tickets. Bison management can make few changes in unit rate plans for ticket sales. Based on the current scenario Ticket with unit rate of $9 has the highest occupancy rate which is 6,000.
However, it is observed that during the course of the game unoccupied premium seats (ticket unit rate of $ 12) gets occupied by people who have not paid for premium tickets this goes to shaow that in general people do enjoy sitting on premium seats to get a better view of the game.
Therefore instead of having a 3 rate system Bison management can go for a 2 unit rate ticket system therby increasing their revenue.
Current earnings of Bison:
Unit rate of ticket Occupancy Rate Total Earning in $
$12 X 1,500 = 18,000
$9 X 6,000 = 54,000
$7 X 500 = 3,500
Total = 75,500
Revised earnings of Bison after change in unit rate of tickets
Unit rate of ticket Occupancy Rate Total Earning in $
$10 X 6,000 = 60,000
$8 X 2,000 =16,000
Total = 76,000
For premium tickets unit rate price has been reduced to $ 10 from $12 and $9 ticket rate has been incresed to $ 10 and $7 ticket rate has been revised to $8 therby resulting in increase in total $ eranings of Bison group by $ 500.
3. The following factors influence dollar amount paid for increase in ticket sales:
i. A strong team will lead to better performance on field thereby resulting in increase in sale of tickets. In order to achieve this the team management will have to spend dollars to bring about major improvement in the team by hiring better team coach, better training facilities and even better players who perform.
ii. A royalty club point system can be introduced for those fans who regularly purchase premium tickets in stadium. Once a certain no. of points gets accumulated the Bisons management can award free tickets to the club members to watch a match therby increasing loyalty of premium customers.