Case Study: Pricing Assessment for Hanson Production, New York

This case study analyzes the pricing strategies of Hanson Production Company, a firm aiming to expand in the New York City art sector. It presents a pricing assessment report, including a situational analysis using a SWOT table, identifying core problems such as challenges in determining ticket prices, and the contributing factors like limited market research time and fluctuating prices. The report outlines key assumptions related to costs, competitors' pricing, and internal factors. It proposes strategic alternatives like setting optimal prices, stabilizing ticket prices, and conducting thorough market research. Each alternative is analyzed for its potential impact on revenue and market share. The rationale emphasizes the importance of market research for informed pricing decisions and provides an implementation plan with performance measurement metrics to improve pricing strategies and increase revenue for Hanson Production Company.

Running head: PRICING CASE ASSESSMENT 1
Pricing Case Assessment
Author’s Name
Institutional Affiliation
Date

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Introduction
Pricing assessment report or analysis provides a direction for a consistency and quality
results in a price assessment. Hanson Company is a production firm with goals of expanding the
art sector in the New York City. The company has a pricing strategy regarding the selling of the
tickets including discounts offered, and opening prices. This report will carry out a pricing
assessment for the company and will comprise of situational analysis table, the core problems
and the contributing factors, the main assumptions, strategic alternatives that are pricing related
and its analysis and summary of the rationale (Peter, 2010).
Situational analysis or SWOT table (combine internal and external environment, scan
elements and represent specific information and quantifiable metrics)
The situational analysis of Hanson Production Company describes the internal and
external environment of the company. The internal environment of the company comprises of
Hanson Company's internal factors that affect the operations of the organization and the
company has control over them. The internal factors that are contained in the internal
environment comprise of the strengths and weaknesses of Hanson production Company (Peter,
2010). Strengths of the company are the internal factors that contribute to the success of the
organization. For Hanson Company, its strengths comprise of having a brand name, large market
share and ability to manage costs thus gaining a cost competitive advantage.
The weaknesses of the organization include its pricing strategies and marketing
techniques that make it unable to obtain maximum revenues for the organization. The external
environment of the company comprise of external factors that have an impact to the organization
and which the organization has no control over (Peter, 2010). For Hanson Company, the

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opportunities include expanding its market to the New York City, achieving a competitive
advantage in the production industry due to its brand name and quality of services, opportunities
to attract highly talented staff or individual in the market. The company has threats in the new
government policies in the industry that may affect the industry and competition from other
production companies and organizations.
The elements of internal factors of Hanson Company include the employees such as
Shen, the financial resources of the company and the physical resources such as the computers
and buildings. The external environment elements include the audience, the theatre owners from
which they rent and the competitors of the organization. The internal and external environment
elements work together to enable Hanson Company achieves its goals of expanding the arts of
New York City (Peter, 2010).
Situational Analysis table
Internal factors SWOT analysis Quantifiable metrics.
Elements:
Financial resources
Employees,
Internal systems
Strengths:
Large market share,
adequate financial
resources and brand
name
Weaknesses:
Poor pricing strategies,
Revenue amounts, financial
considerations ad performance, and
number of customers.

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External Factors
Elements:
Competitors,
Owners of the
theatre and the
government
policies.
Opportunities:
Competitive advantage,
opportunities to expand
the market share.
Threats:
New government
policies, competitors
from the industry
Revenue amounts, number of customers
and financial performance.
Core problem statement and some lists of the contributing factors
The core problem of Hanson Company is Challenges that the company faces while
determining ticket prices for opening days. Shen, who is also in charge of setting up prices
experiences various limitations as fear of the expectations from the audience and availability of
theater rooms depending with the size, despite the market research she conducts before setting
the prices (Peter, 2010). Some of the contributing factors of the challenges in pricing include
establishing higher prices that shun away the audience of Hanson production company, limited
time to conduct market research, come up with appropriate prices for the tickets and rolling or
reducing the prices to be lower than that which was initially set during ticket pricing.
Higher prices shun away audience who may be willing to buy the tickets from the
company. This makes the company lose a certain amount of revenue that could be obtained from
the lost audience. In evaluating this alternative, the performance levels can be compared in

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terms of the profit of the company after implementation of the alternative (Peter, 2010). In
limitations of time for setting the ticket prices, Shen had to set the prices for tickets set to eight
weeks to the presentation and the theatre location had not been found, this creates a hectic
environment that leads to poor price setting strategies (Baldacci et al, 2017). In assessing this
alternative, the organization can determine if there is an improvement in the revenue of the
organization after implementation of the alternative. Reducing the ticket prices after they have
been set destroys the reputation of Hanson production Company towards the public and the
company.
The Company should maintain the prices that were initially set to protect its reputation
and increase its revenue. Determining the breakeven point of the company will assist to
determine if this alternative is useful to the organization. Lack of awareness of the targeted
audience and their expectations also make difficult to set the ticket prices and to find the
appropriate theatres.
Key assumptions
Some of the assumptions that have been considered in the pricing assessment of Hanson
Company include the effects of the expenses and costs on ticket pricing; the assumptions of the
internal and external factors such as competitor's prices have also been put in place (Peter, 2010).
The case of Hanson Company has not put into consideration the pricing factors of the
competitors in their pricing strategies. Some of the internal factors that have been put into
assumption include the employee's salaries and wages and the working capital and expected
returns of the company.
Pricing related strategic alternatives and be a viable fix for the core problem

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The pricing related alternatives include setting prices that are not very high for the
audience, setting a stable ticket prices which will not be reduced in the process, coming up with
appropriate timing strategies for conducting market research and setting up the ticket prices and
obtaining adequate research for estimating the expected number of audience in order to come up
with appropriate pricing strategies (Baldacci et al, 2017).
Analysis of each strategic alternative
Setting prices that are not too high for the audience will attract more audience causing
them to buy more tickets. This will increase the revenue of the company and maintain the loyalty
of the audience who have bought the ticket thus obtaining a larger market share for the company.
Reducing the ticket prices of the company after they have been set tarnishes the reputation of the
organization and furthermore, makes it impossible to resume to the initial price. This can be
solved by maintaining the stability of the set prices. This will enable the company to achieve a
good reputation and earn more revenue than when the organization keeps on fluctuating the
ticket prices. Having appropriate pricing strategies will enable Shen, who is in charge of ticket
pricing to find out adequate information that is relevant for coming up with appropriate theatre
locations and pricing strategies for the audience and the tickets respectively. Carrying out
adequate market research will also enable the organization to have an analysis of the possible
number of audience that is being expected in the event (Peter, 2010). Their expectations can also
be determined from the conducted research and come up with appropriate pricing strategies
based on the decisions made.

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Summary of the rationale
Hanson production Company is a successful production Company but experiences
several challenges in the setting up of the ticket prices. The company also has the internal factors
and external factors that affect its operations in the production industry. The internal factors
comprise of its strengths and weaknesses and the company can have control over them (Baldacci
et al, 2017). On the other hand, the external factors comprise of the opportunities and threats of
the company and which the company does not have control over (Peter, 2010). In order to
address the pricing problems of the Company, the organization should come up with an
appropriate implementation plan of the recommended alternatives. Coming up with the plan will
enable the organization to formulate strategies and take corrective action that will enable the
organization to achieve appropriate ticket pricing methods and strategies.
The organization can assess the performance of the company after implementation of the
recommended strategies. This can be done by comparing the financial revenue of the company
before the new pricing strategies were implemented and after they have been implemented. The
best alternative chosen is carrying out adequate research to gather adequate information for
pricing strategy (Peter, 2010). Revenues obtained after conducting an effective market research
are higher as compared to before conducting the market research effectively.

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The implementation table
Tasks to be
implemented
Issue that is addresses Period of
implementation
Performance
measurement
Adequate research
time
Limited time to set
ticket prices and
knowing expected
number of audience
and their
expectations.
Three months after
the plan.
Revenues of the
company, if they
have increased or not.
Stabilizing prices Reducing initial
prices which
tarnishes
organization’s
reputation
Five months after the
plan.
Increased number of
customers and the
company’s revenue.
Setting favorable
prices to attract more
audience.
Higher ticket pricing
that sends away some
of the audience
Six months after the
plan.
Revenue of the
company in terms of
profits and number of
audience increased.

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References
Peter Fermilgietti (2010). Hanson Production: Pricing for the Opening Day
Baldacci, R., Hill, A., Hoshino, E. A., & Lim, A. (2017). Pricing strategies for capacitated ring-
star problems based on dynamic programming algorithms. European Journal of
Operational Research, 262(3), 879-893.