SPORTS INDUSTRY

Price Discrimination in the Leisure Industry: Sports Industry-Football



Price Discrimination in the Leisure Industry: Sports Industry-Football

Introduction

There have been various advantages and developments in the leisure industry over the past few decades, especially with the advancement of media; there is an increase in the entertainment, tourism, and sports industries. According to Isla Gower (2004), there is a sudden increase in UK leisure industry since 2000. The main focus of these industries is to provide entertainment, hospitality services, and promotion of physical fitness and sports activities, but apart from their primary focus, leisure industry has become more focused on profit maximization. For this purpose, there are various advancements in the strategies and methods, to attract public. One of these most effective strategies is price discrimination. Price discrimination offers an advantage to discriminate audience or public on the basis of different types of price mechanisms. These price discrimination strategies are used in the sport industry, for promotion of sports like football. In this industry, the major focus was physical fitness, and promotion was mainly aimed to increase health and sports activities, but with the increase in awareness and increase in customers, the focus is more diverted towards earning of revenue.

Price Discrimination

Price discrimination is defined as price differentiating strategy in which the same commodity is sold at different prices at different places. Price discrimination is a more common feature of monopolistic competition. In monopolistic competition, a monopolist controls the prices of goods. Products are offered at different prices to different buyers, on the basis of its use, geographical setting, change in time, and various other such factors. It is associated with the discrimination of price and commodity. In perfect competitive firms are known as price takers. On the other hand, monopolist firms are price maker (Jain & Ohri, 2011, p.238). There are various types of price discrimination on the basis of differences in prices in different regions, uses, and time, which can be further categorized in different degrees.

Personal Price Discrimination

When there are different prices offered to buyers on the basis of potential of customer or their ability to pay for the product, this type is known as personal price discrimination. In monopolistic competition, consumers are usually charged with higher prices due to their unawareness of the product prices and ignorance of current product prices in the market. It also happens due to slight changes in the quality or nature of products and services (Jain & Ohri, 2011, p.238). One common example for the personal price discrimination is when a doctor or general physician charge different prices from different patients, according to their affordability such as price discrimination for poor and rich patients.

Geographical Price Discrimination

When there are different prices charged to different customers, for the same commodity, at different areas, it is known as geographical distribution. For example, there are different prices of the same commodity in the local market and the international market (Jain & Ohri, 2011).

Price Discrimination According to Use

When there are different prices offered for a product on ...