20.7 In the 'Real life' titled 'Ticket pricing in the Australian Football League' in the section Pricing strategies', the AFL's variable ticket pricing strategy was discussed. Explain why this is an example of value-based pricing. LO 20.3 REALLIFE REALLIFE TICKET PRICING IN THE AUSTRALIAN FOOTBALL LEAGUE In recent years, the Australian Football League (AFL) has experimented with its ticket pricing, implementing what has been termed a variable pricing or a dynamic pricing model. This is essentially a value-based pricing approach. Under this approach, the AFL has given its 18 clubs the ability to change the ticket price depending on the game. In this way, clubs have the ability to set a higher price for matches that are expected to have greater demand for tickets, and lower prices for matches where demand is expected to be lower. Importantly, clubs are given the option of changing reserved seat prices right up until the beginning of a match. When the variable ticketing approach was first introduced in 2014, the approach received some criticism from supporters, who felt that it was unfair that the price of matches could vary, given that the underlying product-a seat at an AFL match-was essentially the same. One club president, Collingwood's Eddie McGuire, expressed concern that the approach discriminated against supporters who were less affluent than others. However, the AFL defended its approach, with the AFL's general manager of clubs and operations, Travis Auld, arguing in 2016 that the AFL wanted to get as many supporters to games as possible, and that in some cases the approach would lead to prices for individual games going down. Another concern that fans raised was that given ticket prices could change right up to the beginning of a match, there was the possibility that those who bought their tickets earlier may pay more than those who bought tickets later. However, Mr Auld made the following comment in response to this: 'You don't get asked for an extra $5 if [the ticket price] goes up either'. Source: Based on Ralph & Baker (2014); Twomey (2016); Australian Broadcasting Corporation (ABC) (2016) 20.7 In the 'Real life' titled 'Ticket pricing in the Australian Football League' in the section Pricing strategies', the AFL's variable ticket pricing strategy was discussed. Explain why this is an example of value-based pricing. LO 20.3 REALLIFE REALLIFE TICKET PRICING IN THE AUSTRALIAN FOOTBALL LEAGUE In recent years, the Australian Football League (AFL) has experimented with its ticket pricing, implementing what has been termed a variable pricing or a dynamic pricing model. This is essentially a value-based pricing approach. Under this approach, the AFL has given its 18 clubs the ability to change the ticket price depending on the game. In this way, clubs have the ability to set a higher price for matches that are expected to have greater demand for tickets, and lower prices for matches where demand is expected to be lower. Importantly, clubs are given the option of changing reserved seat prices right up until the beginning of a match. When the variable ticketing approach was first introduced in 2014, the approach received some criticism from supporters, who felt that it was unfair that the price of matches could vary, given that the underlying product-a seat at an AFL match-was essentially the same. One club president, Collingwood's Eddie McGuire, expressed concern that the approach discriminated against supporters who were less affluent than others. However, the AFL defended its approach, with the AFL's general manager of clubs and operations, Travis Auld, arguing in 2016 that the AFL wanted to get as many supporters to games as possible, and that in some cases the approach would lead to prices for individual games going down. Another concern that fans raised was that given ticket prices could change right up to the beginning of a match, there was the possibility that those who bought their tickets earlier may pay more than those who bought tickets later. However, Mr Auld made the following comment in response to this: 'You don't get asked for an extra $5 if [the ticket price] goes up either'. Source: Based on Ralph & Baker (2014); Twomey (2016); Australian Broadcasting Corporation (ABC) (2016)