The Role of Price Tiers in Advance Purchasing of Event Tickets

In: Journal of service research, Volume 12, Issue 1, p. 73-86

Abstract

This article focuses on the empirical modeling of advance purchasing and the effects of price on purchasing behavior. Because pricing strategies are typically more complex than simply setting a single price point, the authors consider multiple aspects of price: (a) use of multiple price tiers, (b) face value of tickets, and (c) discounts resulting in week-to-week variations in price. They show that failure to account for price tiers can lead to exaggerated inferences about the role of price over time. Findings reflect substantial differences across tiers. Purchasers in the high-priced tier tend to buy earlier in the selling period and are influenced by price discounts and premiums in the spot market. Purchasers in the low- and mid-priced tiers tend to delay purchasing and are influenced only by face value prices in the spot market. The authors discuss the implications of these empirical observations for future researchers and marketing managers.