Question: Berkley Golf Tennis Club offers golf and tennis memberships

Berkley Golf & Tennis Club offers golf and tennis memberships. Marketing analysis of the local neighborhood served by Berkley Golf & Tennis Club shows that there are two types of families that might join the club: golf-oriented families, which are primarily interested in golf but enjoy playing some tennis, and tennis-oriented families, which are primarily interested in tennis but enjoy playing some golf. The study further estimates that there are 400 golf-oriented families and 300 tennis-oriented families in the neighborhood, and the estimated demand prices for golf and tennis memberships by family type are given below. There is no way to identify family types for pricing purposes, and all costs are fixed so that maximizing total revenue is equivalent to maximizing profit.

a. If Berkley Golf & Tennis Club plans to offer golf and tennis memberships separately, what prices should be charged for each kind of membership if Berkley wishes to maximize profit? How much total revenue can be generated each month under this pricing plan?
b. The manager of Berkley Golf & Tennis Club has just finished her MBA degree and has an idea that bundling golf and tennis memberships might increase profit for the club. Are the conditions right for bundle pricing to increase profit at Berkley Golf & Tennis?
c. What is the optimal price to charge for a golf and tennis (bundled) membership? How much revenue will this produce for Berkley Golf & Tennis Club? Is bundling a profitable pricing tactic for theclub?

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  • CreatedNovember 18, 2014
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