Monthly Archives: April 2019

2019 NCAA Championship Games Bring in Revenue

Ah, there is nothing like spring. The days get longer, the weather warmer, and the hoops get a workout!

March is madness indeed when the NCAA basketball tournament games get underway. Instead of working (or studying) fans stealthily watch games at work, home, on TVs, computers, and phones. Brackets get filled out, hopes rise; and then inevitably, hearts get broken. While not the largest total viewership of any sporting event, nonetheless the Men’s NCAA championship game draws a large audience – and with it, a lot of advertisement and promotion. This year’s championship game between Texas Tech and University of Virginia drew 19.6 million viewers (according to Nielsen), a 23% increase from last year’s game.

As far as advertising revenue, the tournament brought in an estimated $933 million to CBS and Turner (according to iSpot.tv). Of that total, $114 million (12%) was spent on ads during the championship game alone. Cost for 30 seconds of air time range around $1.4 million. Who were the biggest spenders?

  • AT&T Wireless – $68.0 million
  • Buick – $42.5 million
  • Geico – $36.4 million
  • Capital One – $31.6 million
  • Progressive – $27.9 million

These numbers are just for TV commercials. Now add in additional revenue for sponsorships, signage, events, and more!

How did your bracket do?

Group Activities and Discussion Questions:

  1. Discuss the importance of clearly defining a target market.
  2. Poll students: Who watched the NCAA men’s basketball games? How much did they watch? On what devices?
  3. What ads can they recall seeing?
  4. Show a highlight video of the final game: https://youtu.be/cm3OA8NRib4
  5. For the NCAA games, who is the target market? Is there a secondary target market?
  6. Divide students into teams and have each team develop a profile of a target market for NCAA games. Include demographics, psychographics, behaviors, values, attitudes, etc.
  7. Based on the target market profile, what makes this event unique for these viewers and advertisers?

Source: Jerde, S. (9 April 2010). NCAA championship game averages 19.6 million viewers. Ad Week.

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The World’s Most Expensive Pigeon!

Determining the right price for a product or service is not always easy. Organizations need to determine the strategy that is best for meeting its objectives. Does the organization want to establish a beach-head and gain market share, or reach the elite purchasers? Pricing strategies include demand-oriented, cost-oriented, profit-oriented, and competition-oriented approaches. Within these various approaches are price models that include skimming, penetration, luxury, bundling, price-lining, return-on-investment, and more. And finally, do not discount the strong appeal used with psychological pricing.

All these strategies are interesting, but how does one apply them to a unique product such as a rare Stradivari viola made in the 1700s? Or a prized Belgian racing pigeon? In the case of the Stradivari, the auction price starts at $45 million. For the pigeon (named Armando) the auction price rose to $1.4 million in approximately and hour as two Chinese buyers kept increasing their competing bids trying to obtain the world’s fastest pigeon! Armando is believed to be the most expensive bird ever to be sold at auction. The attraction to the Chinese buyer was likely due to the sport of pigeon racing becoming more popular among the countries elite.

So, next time you see a pigeon sitting on a statue on the park, consider how valuable the little guy might be.

Group Activities and Discussion Questions:

  1. As class begins, poll students about pets and pricing. Ask who has a pet and how much they paid. Ask other students if they were going to buy an animal, how much would they consider spending?
  2. Show a video about the Belgian pigeon: https://www.youtube.com/watch?v=Z2SwXWV5Rec
  3. The auction site (with additional video) can be found at: https://www.pipa.be/en/newsandarticles/reports/armando-joel-verschoots-record-breaking-pigeon-video
  4. Discuss pricing strategies (e.g., demand-oriented, cost-oriented, profit-oriented, competition-oriented, etc.).
  5. Divide students into teams. Have each team select a different price approach and determine a SMART objective for the approach.
  6. Next, have students use their selected price model to determine prices for the ordinary products (e.g., milk, gas, eggs, etc.), shopping products (e.g., shoes, jackets, etc.), and luxury items (e.g., Tiffany, Louis Vitton), and rare (e.g., Tibetan Mastiff, Stradivari viola).

Source:  Belinger, J. (19 March, 2019). Chinese buyer bids record $1.4 million for racing pigeon. CNN

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