Contemporary Marketing 16th Edition by Louis Boone,David Kurtz

Exercise 24

If you've ever tried to get tickets for a game, show, or concert that ended up being sold out, you may be surprised to find that 20 to 40 percent of seats for many such events actually go unsold. High prices keep many otherwise-willing people away from arenas and concert halls, although the live-event business earns $22 billion a year in the United States. The recessionary economy is having an impact on sales, causing even headline acts to cancel performances when tickets priced at hundreds of dollars don't sell.
Now, however, you can bid on hundreds of thousands of those unsold seats through a fast-growing, Los Angeles-based start-up called ScoreBig, which lets consumers make an offer for the event of their choice in much the same way that PriceLine.com auctions hotel rooms and airline tickets.
ScoreBig operates a website through which visitors can bid on upcoming events, and a daily auction on its mobile app for the iPhone, called ScoreBig Daily, for those who don't need to plan ahead and who live in Los Angeles, San Francisco, or New York. In both channels, the company lists events with excess inventories of seats and invites customers to bid for the chance to pay at least 10 percent less and sometimes as much as 60 percent less than the original price, often within a seating area of their choice. The company provides a ballpark price for bidders. If the bid is accepted, a confirming email is sent immediately and the customer prints out the ticket. The average savings is 42 percent, and because ScoreBig deals directly with event promoters, there are no fees or handling charges.
ScoreBig Daily, the iPhone app, will soon be available on other wireless platforms. It offers tickets for about six performances a day and stores customers' event preferences, whether for sports, music, theater, comedy, or family events. It will offer the same deal to friends if the bidder shares a purchase via social media and will even save nearby seats for friends
QUESTIONS FOR CRITICAL THINKING
1. Critics say event promoters are to blame for the high number of unsold tickets, because they have continued to raise ticket prices to compensate for unsold seats until they rise out of range for most audiences. Yet promoters feel discounts damage their brands. Can you suggest possible answers to this pricing strategy problem?
2. Is auctioning the best way to eliminate unsold seats? Why or why not?