LONDON 2012 OLYMPIC GAMES

Q1. Core problem and issues in the case?
A1. The core problems and issues in this case were- * Decide the pricing strategy of tickets in different events.
As popularity of events varied among the audiences, Williamson had to make sure that the revenue decided by the organizing committee is achieved but at the same time he had to make sure that the prices are fair and equitable, thus making London 2012 game as everybody’s game by making it most accessible and participative games ever. * 100% attendance is achieved
As the London 2012 Olympic games would attract huge international crowd and international media would keep a track on all the events which are going to happen in the Olympic games, and the LOCOG cannot afford to broadcast to the world the half empty arenas, which will be a shameful picture of London Olympic games as it was apparently happened in Beijing Olympic games where entire sections of empty seats which were filled with local volunteers dressed in identical shirts pounding inflatable bats and being led in rehearsed cheers which came under scanner and being broadcasted to the whole world. * Managing perceptions of people in different events so that different policies can be established to price the tickets of different events. LOCOG has to fulfill its promises of making London 2012 games as everybody’s game by making sure that the tickets were affordable to the local citizens as many interest groups were judging the effectiveness of the LOCOG. * LOCOG has to prevent the fraudulent and black marketing of tickets by checking secondary market through prosecuting the entities involved. Q2. The dilemma of Williamson – explain the stances and support one of them? A2. Dilemmas faced by Williamson are- * He has to maximize attendance not just at the opening ceremony and swimming finals but also at events like handball and table tennis * He wanted to fill the seats with the right audience- knowledgeable fans who added to the energy and atmosphere of the events. * He has to make sure that revenue and the attendance target is achieved at the same time. * He also has to make a tradeoff between two outcomes- exceeding his ticket revenue target by $50 million with 70% attendance or coming up short by $50 million with 90% attendance. * He has to achieve the target of maximizing revenues but also had to make sure that the prices were affordable to common man.
They were promoting London 2012 Olympic game as everybody’s game which meant that the tickets had to be made affordable to common people. At the same time he had to achieve the target revenues which were decided by the organizing committee. He also had to allocate different ticket prices for different events as some of the events were more popular and sold out than other events.
Q3. How might his pricing strategies vary by sport? To do this focus on swimming, indoor track cycling and table tennis.
A3. The pricing strategy must vary according to different sports as some sports are more popular and are sold out in comparison to other sports which are not very popular like handball and table tennis. The prices for the sport events which are in high demand by audience, Williamson should charge a higher price and the events where the demand is low the prices of the tickets should be kept low so that no seats are empty.
The pricing strategies for swimming, indoor track cycling and table tennis should be decided keeping in mind the popularity of events. Among these events swimming is the most popular event and people are ready to pay a higher price to watch the finals of swimming competition as in past England has won maximum gold medals in swimming. Indoor track cycling does not command a very loyal audience in comparison to swimming but still people are ready to attend the event. Thus the prices should be kept in a medium range but for table tennis the prices of tickets should be kept very low as it is not at all a popular sport and people are not ready to attend the event. Therefore various monetary incentives must be provided to induce people to attend the event.
Q4. What are the characteristics of a good pricing strategy? (Keep the case focus in mind while answering this question)?
A4. The characteristics of a good and efficient pricing strategy are that it should cover the cost incurred by the entity as well as some profit or revenue should be generated. In this case various price strategies should be followed in order to maximize the revenue and achieve the overall target of revenue decided by the organizing committee. The various strategies are as follows- 1. Price discrimination strategy. It is the practice of charging different prices to consumers for the same goods and services according to the paying capacity of the consumer. This type of strategy requires having complete information about the prospective customer, so he is able to get consumer surplus. For examples the elite and professionals should be charged a higher price for the tickets in comparison to average people. 2. Block pricing. In this products which are identical are packed together in order to enhance profit by forcing customer to make an all-or-none decision to purchase. For example the tickets can be sold out in a family pack. 3. Commodity bundling. The practice of bundling several different products together and selling them at a single “bundle price”. For example tickets for the unpopular events like table tennis; hand ball etc. should be clubbed with popular events like swimming, archery etc. 4. Cross subsidy. In this kind of strategy the profits gained from the sale of one product are used to subsidize sale of related product. For example the revenue generated from the sales of swimming event tickets should be allocated to subsidize other non-popular sporting events.

Q5. If you could, what would you recommend to Williamson and LOCOG?
A5. The best recommendation for Williamson and LOCOG are - * in this case is to do the commodity bundling in accordance to the choice of the customer, where if a consumer is buying a ticket for a popular event like swimming he would be given an option of buying a non popular event like handball match for cheaper rates with that ticket as compared to the original price of the non popular events ticket. Since Williamson wanted London Olympic as common man’s game where tickets could be affordable by each and every local citizen who is interested in sports. * To avoid fraudulence and black marketing of tickets, tickets should be sold in the name of the spectator and at the entry he must carry his valid photo id proof.