Question

The Simulation Challenge from the Knowledge Matters website on Market Segmentation:

-In this Challenge Phase, you are responsible for the marketing plan for three concerts at Fire Island Stadium.

You have a total spending budget of $180,000. You can split this between the three concerts in any way that you like.

-Use Reports>>Event Reports and the Future Events tab to see what bands are playing.

Use Reports>>Band Research Report to learn about the fan base of each band.

Use Social Media Promotion to design ads, narrow down a target audience, and book and run the ads.

Your specific goal is total ticket sales (attendance) of 60,000 over the three concerts while keeping spending at or below your budget of $180,000.

To monitor your progress against your budget and ticket sales goal, you can click the CURRENT GRADE link below. It will also show you your current grade.

If you make the goal, the simulation will automatically stop and submit your grade.

You can also click Submit below to submit your score. At your Professor's discretion, you can retry the Challenge Phase multiple times. Only your best grade will count.

Goal for 100% Grade: Ticket sales of at least 60,000; spending at or below $180,000.

Band 1:

FAN AGE

16-24 53 %

25-39 24 %

40-54 23 %

55+ 0 %

Answer 1

Marketing plans for concerts should account for the price elasticity of demand to optimize ticket sales and revenue. If demand is elastic, lowering prices might sell more tickets but requires careful consideration of venue size and costs. Strategic pricing adjustments are key to meeting sales goals within budget constraints.

Step-by-step explanation:

When creating a marketing plan for concerts, a key factor is taking into account the price elasticity of demand. This economic principle affects how pricing changes can influence the number of tickets sold, impacting your event's total revenue, which is the product of price and quantity of tickets sold. For example, if a band considers lowering their ticket prices because the demand is elastic, they could potentially sell out a 15,000-seat arena. However, this strategy has limitations if no larger venue is available, or if moving to a larger venue would increase costs significantly.

If the demand is elastic, lowering ticket prices may result in a more than proportionate increase in the quantity of tickets sold, potentially increasing overall revenue. Nevertheless, this decision must be carefully weighed against the cost implications of changing venues or the possibility of reaching a price point that does not cover the event's costs. Monitoring and adjusting pricing strategies, while considering elasticity, will be crucial to ensuring that the marketing plan meets the goal of 60,000 total ticket sales within the $180,000 budget.