Segmentation of Theatre Audiences: A Latent Class Approach for Combined Data

40 Pages Posted: 31 Aug 2018

See all articles by Evgeniy Ozhegov

Evgeniy Ozhegov

National Research University Higher School of Economics

Alina Ozhegova

Norwegian School of Economics

Date Written: August 29, 2018

Abstract

Theatrical productions are perishable goods, since the tickets for a particular play cannot be inventoried and sold after the time of the play. In the revenue management of a perishable good, price discrimination is widely used. Since the theatre audience is heterogeneous in terms of visit purpose, ability to perceive quality, willingness-to-pay, the strategy of price discrimination should be developed in the context of theatre segments. In this paper, we segment consumers of the Perm Opera and Ballet Theatre and propose marketing instruments to increase theatre revenue. Since the development of a detailed price discrimination strategy requires data on consumer purchase history, behavioral and socio-demographic characteristics, we combine two data sources: data on ticket purchases and survey data. Using a modication of a latent class logit model for joint revealed and stated preference data we identify four segments of the theater's audience. The study reveals theatregoer segments with dierent willingness-to-pay for performance and seat location characteristics, which allows the development of detailed recommendations on the pricing strategy for various theatre audiences.

Keywords: demand, performing arts, consumer segments, willingness-to-pay

JEL Classification: Z11, C53, D12

Suggested Citation

Ozhegov, Evgeniy and Ozhegova, Alina, Segmentation of Theatre Audiences: A Latent Class Approach for Combined Data (August 29, 2018). Higher School of Economics Research Paper No. WP BRP 198/EC/2018, Available at SSRN: https://ssrn.com/abstract=3240518 or http://dx.doi.org/10.2139/ssrn.3240518

Evgeniy Ozhegov (Contact Author)

National Research University Higher School of Economics ( email )

Saint-Petersburg, Saint-Petersburg
Russia

Alina Ozhegova

Norwegian School of Economics ( email )

Helleveien 30
Bergen, 5045
Norway
(+47) 55 95 90 00 (Phone)

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