Research On Pricing Strategies For Large Sports Event

At the beginning of 21 st century,the study of two-sided market has been paid more and more attention in the academic circle.A typical two-sided market consists of a platform company and two user groups that provide services to both users for transaction or value exchange through the platform.In this process,platform companies make money by charging users on both sides for their services.Compared with traditional one-sided market,one of the biggest characteristics of two-sided market is that the utility obtained by users on one side and the scale of participation will be affected by the scale of users on the other side,that is,there is network externality effect between user groups.Sponsorship income and ticket income are two important income components of the organizer of large-scale sports events operated by market.The essence of the industry is a two-sided market made up of sponsors,events and spectators.Event platforms sell spectator services to spectators,and at the same time sell exposure and other sponsorship benefits to sponsors,and their interaction has network effects.When selecting a target sponsored event,the sponsor will take into account the number of spectators,the sensitivity of the audience to the sponsor and other characteristics of the external environment,in order to obtain a higher positive cross network externality.Hence,sponsorship benefits are also influenced by ticket prices indirectly.We mainly do research in the method of mathematical model analysis,which is popular in the study of applied microeconomics and marketing.According to the network effect and two-sided market theory and other theoretical tools,we adjusted and refined the classic assumptions and applied mathematical model analysis to combine the scenarios of large-scale competitions.From the perspective of theory,this paper deeply analyzes the generation and mutual restraint mechanism of the cost and return of stakeholders of events,and some rules of two-sided market pricing by organizers to maximize profits after large-scale events integrate audiences and sponsors into a pricing system and carry out differentiated pricing of vertical space(quality)products.In addition,a set of universal pricing strategies for large-scale events have been developed to provide theoretical support for the sustainable development and long-term profits of events and enrich the application scenarios of network effect and two-sided market theory.Then,because the value of the sponsors in event sponsorship is often difficult to measure and in practice to accurately assess a sponsored event to specific enterprise value is very difficult.So considering selecting and pricing sponsors,we assumed the object of sponsors to do sponsorship is sending a signal that they are profitable enterprises.We analyzed that internal logic in the model of signaling game.Finally,we drew these conclusions:(1)For the event organizer,when the intensity of the positive cross network externality of the audience to the sponsor is much greater than the audience’s willingness to pay for the event,we should give the audience free,and then directly analyze the price strategy of the sponsor market with the thought of one-sided market.In addition to this,a better option is to use a two-sided market pricing model that integrates spectators and sponsors into one pricing system;In particular,the two-sided pricing model has a lower ticket equilibrium price and a higher sponsorship equilibrium price compared to the case where tickets are priced before sponsors are priced(as if they were two one-sided markets).(2)In order to successfully achieve vertical market segmentation,the organizer must ensure that consumers who are more willing to pay for tickets are more sensitive to this difference in quality;If the market segmentation is successful,the expected revenue of the organizer will be increased by providing differentiated products.At this point,the equilibrium price of a regular ticket will go up.(3)In the process of selling tickets and getting sponsorships,spectators pay for the value they bring from the event;Sponsors pay for the positive cross network externalities brought by the audience,which is not directly related to the audience’s perceived values on the event.However,a rational organizer will raise the ticket price when the audience’s perceived values are large,it will lead to the reduction of audience size.Therefore,further,sponsor’s sponsorship intention(reflected in the size of sponsorship fee)are positively correlated with the ratio of the positive externality of audience to sponsor to audience’s willingness to pay for the event;Organizers need to find a balance between ticket sales and sponsorship revenue.(4)For commercial sponsors of large-scale events,sponsorship behavior is often taken as a signal of the strength of an enterprise.For this purpose,sponsors must select events that are large enough that less profitable companies in the industry cannot follow suit in order to send a signal of quality.(5)However,sponsors need to pay attention to the fact that even if the sponsorship fee condition makes the desired separation strategy equilibrium exist in the signaling game,namely: when realistic conditions make high-quality enterprises choose high-cost advertising(such as sponsorship)and low-quality enterprises choose not to do high-cost advertising,there may still be pooling equilibrium(that is,all enterprises do not do high-cost advertising)if the distribution of superior and inferior enterprises in the market and consumers’ cognition meet certain conditions.Enterprises in such industries are not suitable for high-cost advertising to show the strength of the enterprise,it is easy to backfire.