AFL is the lifeblood of many Australians, and discussion of footy is vigorous in workplaces and homes, and it’s something that fans don’t want the AFL ‘messing with’.
“To know how prices will be received and affect demand, marketers have to understand how customers perceive prices and price changes” (Iacobucci, 2013).
What is the AFL’s approach?
In 2014 the AFL implemented a variable pricing policy where matches were fixed into a category at the start of the season, however this didn’t allow for the perceived value of a game as the season unfolded. Value pricing depends on the value a customer will pay because of the value they place on a product (Iacobucci, 2013). AFL fans place a high value on the game but even in footy mad Melbourne there is a limit to what brands can compel from their customers.
After recovering from the backlash from fans, evidenced by falling attendances in 2014, this year the AFL has implemented a market sensitive dynamic ticketing approach as they believe that it provides the flexibility they require and they believe they can bring the fans along with them.
“Our research indicates that in many cases it will be quite favourable to supporters.” (Travis Auld, AFL Club & Operations General Manager)
Why the need to change?
The AFL’s aim of changing the pricing model is to drive demand, clubs will be able to use the dynamic ticketing option to decrease the price of tickets to games that are expected to draw lower crowds and increase the price of blockbuster matches.
In this revised model of dynamic pricing the league have been clever in getting the clubs on board such that it is the clubs who are in control of price changes. The AFL suggests that this is because they know their fans better, however it is an effective risk sharing strategy by the AFL.
The AFL strategy is one of yield management, (Iaobucci, 2013) where increased revenue is derived from increased capacity utilisation. An AFL game is perishable (Iacobucci, 2013), once the game has commenced the capacity to derive revenue from admission has passed. One of the issues with this approach is to ensure that you manage the perceptions of fairness as consumers may feel that if they pay a different price to the person sitting next to them, that is unfair.
According to Auld, AFL Club and Operations General Manager AFL’s dynamic ticketing trial will be “favourable” to fans and won’t add extra confusion to the process of purchasing seats.
“Both the clubs and the AFL have this single-minded objective to get as many people to games as we can and they feel this opportunity will work for supporters”
What is the fans verdict?
Fans want the AFL to give its over-complicated ticketing system the boot. Prior to round 1, supporters eager for their football fix say they have been bamboozled by as many as 23 seat options and prices under the league’s “variable and dynamic” ticketing regime.
Perceived price complexity has been reported to increase the cognitive effort of consumers in evaluating price , this approach has also been shown to negatively impact consumers perceptions of choice, price fairness and transparency (Homburg, Totzek & Kramer, 2013). How closely did the AFL consider these consequences?
The AFL Fan’s Association has also been vocal in the wake of the introduction of this model. Comments on the AFL Fans Facebook page see the AFL copping most of the flack, the risk sharing strategy may not come off. The question is will they persist? I suggest they will where AFL is the dominant code.
One word…AFL is greedy!
Give this system the boot AFL
Less than 29k at Etihad last night – hard to see how North can justify upping the price with a crowd of that size.
Homburg, C, Totzek, D. & Kramer, M. (2013) How price complexity takes its toll:The neglected role of a simplicity bias and fairness in price evaluations, Journal of Business Research, 67, 1114 – 1122
Iacobucci, D. (2014) Marketing Management (MM), 4th Edition, South-Western, Cenage Learning, Mason OHOH
Therese Cotter Student ID: 214407067