Taking Demand-based Pricing To Extremes

Mansfied FC played their home match in front of a larger crowd than usual on Saturday.  The reason?  Well, the owners decided to use an extreme method of demand-based pricing. 

They scrapped the usual £16 admission charge, and allowed fans to “pay what they wanted”.  The result was an increase in their usual attendance of around 3,000 people, to a crowd of 7,261.  Although some fans paid as little as 3p, others paid as much as £50! 

The decision didn’t help their performance on the pitch, as they lost the game.  Did the decision make business sense off the pitch?  Well, the final figures are yet to be released, but the owners expect revenue to be higher than usual.  More details can be found here.

One thing is certain - it reinforces the fact that in Business Studies, price is not “what something is worth” - but more accurately “what consumer are prepared to pay”.

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