Essay about Pricing and Public Skating Sessions

Submitted By hankacc
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Pages: 3
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Currently, Swan’s Ice Arena is the only indoor full-size hockey ring in a northern city of 450,000 people. Being the only indoor ice ring that offers public skating programs, it has a competitive advantage over the city’s outdoor rings which do not. Swan charges $5 entry plus $1.5 skate rental year round. Besides the successful hockey program, Swan has a potential to make additional revenue of $3,500 (700 people X $5 per person) during a public session. Even with the competitive advantage, David has not been able to attract enough people to his current 14 public skating sessions. Factoring the costs of hiring more staffs for these public skating sessions, the current revenue stream was offset. In a deficit, he has already spent $12,000 on new lightings and promotions. Within those 14 sessions, he saw a few of the slots were potential revenue generators. “The Saturday and Sunday afternoon public skating sessions have been the most successful, with an average 200 people attending during the winter season.” He has recognized his possible product markets are the hockey program, ages 8 to 14 and family, and teens and young adults. He is contemplating if he should continue to only target the teens and young adult segment as he has spent $12,000 to unsuccessfully attract them. The question is should he segment or combine?
As Swan evaluate the different product market behaviors, different segments are attracted to different public skating sessions. H really cannot alienate the 13 or under markets. They bring 25 percent of his revenue during those peak times. In the spring and fall, attendance drops about in half. To attract this product market and its loyal groups, he should propose monthly or annual membership to reward royal customers. A membership is an economical way to satisfy the customer’s needs to feel appreciated and the membership offerings are recognitions for their membership fees. Also membership fees are great way to generate cash flow faster. Table 1 shows a potential membership breakdown of offerings for single and family memberships.
For single entrance skaters,
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