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Singapore F1 Pricing Strategy

In: Business and Management

Submitted By oaktree
Words 3864
Pages 16
Executive Summary

This report focuses on the use effective pricing strategies to maximize profits from F1 ticket sales. We believe this to be an important objective for the F1 management given high costs of hosting the F1 race each year. Effective pricing strategies can help to recoup the cost of the race and possibly even generate revenue for the organizers. The first part of this report focuses on the effectiveness of existing price strategies such as perception based pricing, price discrimination, bundling and discount management. Our analysis suggests that the F1 tickets in Singapore are wrongly priced as it fails to capture perceived benefits such as having a city track and being the first ever night race. It is, however, too late to reset the price as the reference point has been established. Next, we argue that while the use of price discrimination has increased the total revenue from ticket sales, the extensive use of early-bird based pricing has reduced the effectiveness of discount pricing. While some bundling strategies currently in place, we believe that more can be done to increase the perceived value and to capture greater market share. We have provided suggests for this in section 7. We further evaluated the use of discount management for quantity purchases and conclude that the use of high discount (≈15%) for greater quantity sale will only be financially justified through high volume sales.

Finally, we propose several solutions to increase F1 revenue yield. We believed that more bundled deals and the use of yield management can further drive up sales. In addition, we would urge the management adopt better segmentation hedges through photo recognition to prevent multiple patrons from using the same 3-Day pass and to adopt an overbooking strategy to maximize sales.

Contents
Executive Summary 1
1. Introduction 3
2. Pricing the Singapore…...

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