Hanson Production: Pricing Analysis for Opening Day Show

This report presents an analysis of Hanson Production's pricing strategy for their opening day production. The case study focuses on the selection of a theatre from three alternatives: Hilton Theatre, Longacre Theater, and St. James Theatre. The report begins with an introduction, followed by a situation analysis that includes a SWOT analysis to evaluate the company's strengths, weaknesses, opportunities, and threats. The core problem identified is the lack of decision-making and financial planning. Evaluative criteria are established, considering factors such as maximum audience, return on investment, and national tour potential. The report analyzes each theatre alternative based on these criteria, leading to a decision and justification for selecting the Hilton Theatre. Finally, an implementation plan is outlined, detailing the steps for planning, resource collection, theatre selection, pricing strategy, and contingency planning. The report recommends a ticket price of $110 for the chosen theatre and aims to maximize profit and audience engagement.

HANSON PRODUCTION: PRICING FOR OPENING DAY
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Table of Contents
Introduction......................................................................................................................................3
Situation Analysis............................................................................................................................3
Assumptions:...................................................................................................................................7
Core Problem:..................................................................................................................................7
Evaluative Criteria...........................................................................................................................8
Alternatives......................................................................................................................................9
Analysis of Alternatives..................................................................................................................9
Decision and Justification..............................................................................................................11
Implementation plan......................................................................................................................12
References......................................................................................................................................13

Introduction
The given case study talks about Hanson productions. The company had earned their
name as from the top production companies in US. At one point of time company used to have
lot of projects unremarkable reviews of the shows. However at present the biggest concern of
the company is the current production. The company is still to finalize their show. The given
report will highlight the pricing for the opening day for Hanson production. The problem
statement which lies with the organization is which theatre to choose among the three which are
Hilton Theatre, the Longacre Theater and St. James Theatre.
Situation Analysis
The main cause of concern is regarding the pricing and finalizing the Theatre of the show. The
production houses shortlisted 3 theatres however they are you to finalize one. The mission of the
organization is true theatre a wide range of audience with higher return on investment. The
vision organization is to make the show successful (Quigley, 2017).
The situation as source of the organization can be done with the help of SWOT analysis. It is
important for the organization to evaluate strengths and weakness before planning the show. The
main mission of the organization is to increase the sales by following an effective pricing
strategy for the show. The vision of the organization is to make the show successful. Due to this
reason a proper market research is important for the organization to evaluate the target audience
for the show (Lapsley & Rekers, 2017).
Strengths

The production house has several strengths based on which they can plan out their show. These
are as follows:-
Brand image: Hanson Production has a strong brand name in the competitive market of event
management. The event management company had the experience of producing many successful
show which led to strengthening of its goodwill. Joanne Shen, own of the owners conducted
market research regarding the changing taste of the audience which was aimed at offering more
shows aligned to their taste and strengthening the goodwill of the firm further (Wang & Shaver,
2014).
Low operating cost: Hanson production was able to operate in the low operating cost owing to
the strong supply chain management of Shen. She had strong communication with other big
theatres as well which allowed her to obtain talented new actors for her shows.
Wide appeal: Shen designed the shows keeping the choice of the audience in view and thus, her
shows has a wide appeal and were successful. The theatre producing company was able to attract
highly talented actors and the house performed several shows in the United States and London.
The wide appeal of the company allowed it to develop into a globally famous theater group
(Baldin, et al., 2016).
Content of the show: The content of the shows of Hanson Group were varied which were the
outcomes of the market research Joanne conducted. Thus, the content of the shows were led to
their success and boosted the goodwill of the company.
Ready to share profit margin with the theater owners: The threatre group was ready to share
a part of the profit with the owners of the venues. This encouraged the venue owners to rent
venues to the company (Ye & Kang, 2017).

Weakness
Lack of planning: The case study clearly showed that the theatre group though was successful
in the initial phase, failed to control its resources like music composers due to lack of planning.
No proper market research: The market research of Shen was restricted to the customer
preferences and did not cover important areas like increasing pricing.
Low growth over few years: The theatre group experienced low growth over years according to
the case study due to certain reason. First, Shen was not able to manage the increasing number of
staff members and the lack of budget planning (Parra et al., 2016).
Opportunities:
There are certain opportunities present in this case. It has been observed that the company
could not select any company to whom they can impose the duty to organise the show. There are
three theaters for them and it has been observed that all these companies have certain weak
points that must be detected and resolved. However, there are certain opportunities for the
Broadway production company. The business regarding Broadway is a vast company and it has
the capability to capitalize the social impact theory. The business is quite profitable and can get
the response from different classes of people (Kerrigan, 2017). There is an investment
opportunity at the grass root level. Further, it can be stated that the company is the society will be
benefitted by its creative ideas. Therefore, it can be stated that the company has certain

potentials. Further, it can be stated that the company has chances to spread its ideology through
its creativity. In addition to this, it can be stated that company is novice in the industry and wants
to organize an event. Therefore, it can be stated that the company has all the chances to spread its
name through this event and the company should have to take generous steps to attract the
audience. This can be possible if the company can identify all the weaknesses and resolve the
same (Wang & Shaver, 2014).
Threats:
However, apart from all the strength and opportunities, there are many threats in this industry.
The scope of this industry is wide and there are many Broadway companies present in this
industry. Therefore, one of the threats is competitiveness. Further, it is a fact that the company
should have to fix the rate of the tickets to attract the audience. It can further be stated that the
present company is required to make certain creative steps for their own development. In
addition to this, the present company could not select the company and if this issue does not
resolved, the production quality of the present company can be affected (Parc, 2017). On the
other hand, it has been observed that the local legislation over the issue is quite strict and the
company should have to take all the reasonable steps for the development of the base of the
company. The company should not make any infringement regarding the legal terms. Further, the
company has a small investment capacity and this Broadway is a vast field. Money is an
important matter to this effect and therefore, the company should have to resolve this problem.
Further, the company should have to specify the company so that the production capacity of the
company could not be hampered. Further, the profit sharing process of the company is quite rigid
as per the agreement. It has been observed that the chosen theatre will get 6% on the ticket price
in addition to 10% of the profit after tax and in case of any adverse situation, the contract will be

terminated. Therefore, the company should have to implement proper plan so that it can earn
profit from the business (Vollans, 2015).
Assumptions:
It is assumed that the production house will select 1 theatre among the 3 alternatives and
determine the pricing strategy among them
The following are the assumption for Hanson Production:
1. The theatre group would gain sustainability in its operations and become more profitable.
2. Its new shows would be successful.
Core Problem:
Lack of decision making:
Hanson Production lacked decision making regarding the new projects. This was evident
from the fact that the theater firm was not able to align customers’ convenience to the cost of the
theaters.
Lack of financial planning:
Hanson Productions revealed lack of financial planning particularly in case of new
theatre. This was evident by the addition of wind machine and rain machine which would have
bearing on the cost of production.
Lack of sustainability:
Hanson production lacked sustainability due to several factors like its markets were
restricted to the US and London. This resulted in dwindling returns which made the operations of
the firm unsustainable.

Evaluative Criteria
The organization needs to have an effective evaluation criteria to attain its respective
mission and vision required for the success of the show. With implementation of evaluation
criteria, the organization can select the best possible alternative for its show. The evaluation
criteria has been selected based upon the core problem of Hanson Productions.
It is of great essence for the organization to evaluate among the three alternative theatres namely
Hilton Theatre, the Longacre Theater and St. James Theatre. Therefore, the main cause of
concern for the production house is to select appropriate theater among the three with proper
pricing of the tickets so that they can earn higher amount of profits from gross revenue of ticket
sales.
Criteria: Criteria Quantified:
Maximum Audience 0.45
Return-on-Investment 0.45
National tour 0.1
Table 1: Evaluation Criteria for Hanson Productions
The primary objective for Hanson Productions is to get maximum audience for the show along
with higher return on investment. This is the reason why 0.45 percent of the evaluation criteria
has been assigned to each of Maximum Audience and Return-on-Investment.
National tour is the secondary aim for the organization and this will only happen if gross receipts
are higher than the operating costs of the production house.

Alternatives
There are three main alternatives for Hanson Productions, namely Hilton Theatre, the Longacre
Theater and St. James Theatre. Based on the given alternative, Hanson Productions will fix the
prices of the tickets as per their aims and objectives identified. The production needs to select a
pricing strategy based upon the selection of the theatre.
Analysis of Alternatives
Criteria: Criteria Quantified: Hilton Theatre Longacre
Theater
St. James
Theatre
Maximum Audience 0.45 815.85
(Criteria*Seatin
g capacity)
493.2
(Criteria*Seating
capacity)
730.35
(Criteria*Seating
capacity)
Return-on-Investment 0.45 27 40.5 42.3
National tour
scope/Low operating
costs
0.1 0.3 0.4 0.8
843.15 534.1 773.45
Table 2: Analysis of Alternatives for Hanson Productions
From the above analysis, it can be inferred that the organization needs to select Hilton Theatre
based on the evaluation criteria selected by the firm. There are several strengths and weakness
for each of the theatre. These are as follows:-
Hilton Theatre

Strengths
 Has a capacity of bigger audience
 They will invest 10 percent of total cost, which will meet the operating expenses for the
production house
Weakness
 The return on investment will be on the lower side as they will charge additional
percentage over the gross revenue of the firm
 The scope for national tour will be minimal
Longacre Theater
Strengths
 The return on investment will be on the higher side as they only charge 6 percent of the
rental free for the show.
 No extra share for profit margin will be charged.
Weakness
 The scope for national tour will be minimal
 Low capacity seats for audience

St. James Theatre
Strengths
 Has a capacity of bigger audience
 The return on investment will be on the higher side as they only charge 6 percent of the
rental free for the show.
Weakness
 Risk for higher operating costs if the show do not run properly
Decision and Justification
Based on the above analysis, it can be inferred that Hanson Productions need to select
Hilton Theatre in order to run their show. The prices of the tickets needs to be $110 which is the
standard rate for such kind of shows. The main reason behind the selection of Hilton Theatre is
that they will bear 10 percent operational costs and the risk of debt will be on the lower side.
Though, it is true that they will charge a percentage of profit margin, but, the chances of
cancellation of the contract will be less and it will suit Hanson Productions in the long run as
well.
Implementation plan
The implementation plan will be divided among four different steps:-
 Planning

 Resource collection
 Selection of the theatre and pricing strategy
 Implementation/ Contingency plan
This plan needs to be implemented before the show
Steps Time frame
Activity 1 Planning 1 month
Activity 2 Resource collection 2 months
Activity 3 Selection of the theatre and pricing
strategy
1 month
Activity 4 Implementation/ Contingency plan 3 months