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The London 2012 Olympic Games
Submitted to: Dr. Rambalak Yadav
group 3:
RUKHSHAR Jahan (18A2HP442) SHUBHANGI Khandelwal (18A1HP066)
Nishant Sharma (18A3HP631)
Sheetal Bhardwaj (18A1HP024)
Sai Bharadwaj (18A3HP645)
Sanchita Thakur (18A3HP644)
Anurag (18A1HP097)

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The London 2012 Olympic Games
Submitted to: Dr. Rambalak Yadav
group 3:
RUKHSHAR Jahan (18A2HP442) SHUBHANGI Khandelwal (18A1HP066)
Nishant Sharma (18A3HP631)
Sheetal Bhardwaj (18A1HP024)
Sai Bharadwaj (18A3HP645)
Sanchita Thakur (18A3HP644)
Anurag (18A1HP097)

SUMMARY
With 3years remaining for the London Olympic Games, Paul Williamson, the Head of Ticketing for the 2012 games is to formulate a strategy for ticketing in such a way that both, revenues and attendance is maximized. There is a whole list of factors affecting the pricing strategy and each of these factors are evaluated by him one by one.

Along with increased revenue and attendance, the aim is to fill the seats with right knowledgeable fans for each game, thus adding energy to the atmosphere. At the same time, since London Olympics was supposed to be “EVERYBODY’S GAMES”, the tickets must also be affordable for the public and average Londoners apart from the world’s elite.

The five major sources of generating revenue were- Broadcast Rights, International Sponsorship of Games, Ticketing, Domestic Sponsorship and Licensing Rights.

Wherein, Broadcast Rights and International Sponsorship were to be managed by the IOC and the remaining three was in the hands of the host country(OCOG).

Moving to the expenditure side, an Olympic park was to be built in 500 acres of existing waste land in East Land. There was also a plan to make the 2012 Games, first “public transport” Olympics by linking and upgrading the existing transportation with East London.

An average of 500000 spectators were expected to attend the events, ranging up to 800000 during the busiest days. The competition was to be held between 120000 athletes from 206 countries across 206 sports and 300 events.

The number of tickets to be available for sale was 7.9million. The sale would start from late December 2010 via different mediums for different spectators and would continue throughout the event.

Considering, all the above-mentioned factors, and the fact that it was the first time that tickets would be sold on internet, Paul was to finalize the ticket prices.

Q1. What are the tradeoffs that Williamson faces?
Ans. Trade-offs that Williamson faces:
Pricing
Developing a pricing policy and selling 7.9 million tickets with upto 800000 spectators per day i.e. by maximising the attendance was the primary concern.

Pricing depends on people’s willingness to pay to for an event. People were willing to pay comparatively more for sports such as gymnastics, swimming, ceremonies and athletics than other sports.

Unfortunately, there are two obstacles: the first related to the global financial crisis in the world, which can cause a negative impact on ticket sales and the second is that tickets will sell online for the first time.

To maximize revenue, Williamson should put an attractive price to the target market accordingly.

Attendance
The work does not finish with the tickets of the event being sold. The main concern is the “EMPTY SEATS” which means the buyers of the tickets has not used the tickets purchased.
So, the first task is to get people buy tickets and next task is that the people buying the ticket should use it.

Therefore, selling the tickets at a higher price to selective customers under targeted segments because it was mentioned as Everybody’s Games.

Managing perception
By achieving popularity in all the events in 2012 London Olympics, Paul Williamson can pertain to manage perception. To achieve this LOCOG must involve local citizen and strategize in a way that give special price discounts to local citizens.
Williamson stated that, the Olympic Games consist of 26 different sports, which a majority is not aware of. Therefore, the price strategy plays an important role in having or not having turnouts, while complying with the previously stated law limitations.

Additionally, another problem that arises in all events around the world is the resell. There are people who buy tickets to make a profit, instead of attending the event. Thus, Williamson needs to formulate a mechanism that curbs such practices, while maintain the integrity and objectives of the games.

Keeping in the per view of all fans inclusive of average income candidates should enjoy it is a bit stressful situation for William to control the attendance
So, it is better by having a pricing strategy
1. Keeping in mind THE POPULAR SPORTS technique pricing them higher would lead to covering losing revenue from unpopular sports but in other aspect of low pricing there is a mere chance of getting short on estimated revenue of 650 million.

For average pricing for tickets:
There are 7,961,000 tickets available:
650M/ 7,961,000= 81.65 USD
Total revenues from top sports is
650M * 40%= 260M
Tickets available: 1,246,000
So that we get,
Pricing = 260M/ 1,264,000= 208 USD/ ticket.

Q2. How might his pricing strategy vary by sport?
Ans: Exhibit 9 shows the various pricing tiers for various sports. These tiers will allow Paul Williamson to set the optimum price for most popular and least popular sports. Pricing would differ in accordance with the types of sports:
Popularity of sport is directly related to revenue earned. There were three sports along with the ceremonies which had the highest demand. These are known as BIG FOUR- Swimming, Artistic Gymnastics, Athletics and the opening and closing ceremonies which would be sold at any cost. Around 40% of the revenues were expected from these sports.

For instance, since football is the most common sports in UK, LOCOG hoped to generate 10% ticket revenue from football. Thus, the demand will be inelastic for hardcore loyal fans even if ticket price for football is raised. But it should not be raised much, otherwise fans will prefer staying at home and watching on TV.

Any famous sport celebrity playing his/her sport would also attract customers like Michael Phelps would do in the swimming events.

It was difficult to attract customers for sports for which were much popular.

Williamson should vary the prices of the sports keeping in mind that it would not disrespect any sport as there were 26 different sport events.

Q3. What are the characteristics of good pricing strategy?
Ans. Pricing is something that has the highest and the quickest impact in maximizing the revenue. For the London Olympic Games, Williamson and his team considered various pricing strategies for selling the tickets.

Following are few strategies which were considered by the team:
The committee decided to increase the number of pricing tiers for different sports which would keep some of the ticket prices low but achieve the same revenue targets.
The London 2012 Olympics became the first games where the tickets were booked via internet. This helped to enter the unchartered territories.
The vision was to make London 2012 Olympics “Everybody’s Games”, thus trying to make tickets available to most of the crowd at an affordable price.

The committee came up with a new plan of providing “First Public Transport”, that is, the price of every ticket in the Olympic would include the use of London’s public transport network during the event. This would increase participation and reduce traffic congestion around the venue.
The committee also mentioned that tickets of higher prices will provide the spectators with a better view for the game.
Q4. If you could, what would you recommend Williamson and LOCOG?
Ans. Certain challenges were faced by Williamson while planning the event; those challenges are as follows:
The revenue earned from tickets:
Few parameters were considered to maximise revenue and sale of tickets:
Ceremonies
Price of ticket
Local appeal of a sport
Favouritism towards team or player
Sports preferences (ex. Swimming and Gymnasium were popular games globally)
Number of Attendees:
Out of all the games, there were four major games for which all the tickets would be sold immediately; and the other issue was England’s favourite sport that is ‘Football’ for which the supply of tickets would be less than the demand. While for the other games, sale of tickets would be comparatively low.

The other pressing issue was the possibility of lack of attendance from the officials end. This scenario had already occurred in Beijing Olympics, as the tickets were declared to be sold out for normal public while there were empty seats due to absenteeism of VIPs (for whom the tickets were kept aside). This issue was hyped as well as criticised by the media.

Restrictions imposed by pricing policies:
The LOCOG’s objective was to attract the public and make it “Everybody’s Games”. They thought of fulfilling this idea by selling tickets at low prices to local citizens. But the plan couldn’t be successful due to European Union’s pricing policy. According to the policy, if the price of tickets is reduced then this change should not just be restricted to local communities only, but also offered to other EU citizens.

In such a scenario, a tough choice needs to be made i.e. either the games will help earn maximum revenue for the country or will provide immense popularity through mass attendees.
Williamson and LOCOG are left with two options: exceeding the ticket revenue targets by $50 million with 70% attendance or coming up short by $70 million with 90% attendance.

As per our recommendation, the LOCOG should go ahead with the option of having the 90% attendance and coming back short by $50 million.

The reasons are as follow:
According to Exhibit 4; 5, Out of 2.8billion, Sydney gets around 50-65% of the revenue from broadcasting and international sponsorship and around 20% of the total revenue is generated from tickets. This shows that even if the amount obtained from sale of tickets is reduced, there are other variables which can compensate for this loss. Also, a larger audience would mean greater publicity and in turn will increase revenue from other sources mentioned above.
A fall in price of tickets would attract many viewers and this would add more grandeur to the event in terms of viewership. While an overall fall in price would directly fall in line with the EU policies, since the cost of tickets would be reduced for both local population as well as EU citizens.

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