Philip Kotler wrote about this in 1975, "Marketing for Non Profit
Organizations" Prentice Hall.  In Chapter 9 "Price Decisions" he uses public
museums as his leading example of how to arrive at a pricing strategy.  For
public museums, he reported, it was becoming a necessity and the price goal
seemed to be to prove to politicians that the institution was making a
reasonable effort to pay for part of its operations.

Though he is one of the leading scholars and writers in non-profit
management and planning issues, Kotler's short commentary on pricing
strategy re. museums cited no particular research.  His work has since been
updated, but I have no access to it.

Deshpane, in a chapter "Marketing Management" (Management Principles for
Nonproft Agencies & Organizations, Zaltman, ed. American Management Assn,
1979) views establishing prices as part of the marketing strategy.  He
observes "this price-quality imputation is also related to products which
are considered to have high prestige.  Generally, these are products that
are priced at high, or premium levels.  A sharp cut in prices can undermine
some of the prestige associated with that product."  pg. 385.  Research is
not cited by Deshpane.

Ross Weeks Jr.

----- Original Message -----
From: "Elizabeth A. Moore" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Wednesday, October 25, 2000 10:05 AM
Subject: Re: imputed value of museum offerings


> Dear Mr. Thompson,
>
> Thank you for your message.  Unfortunately, I have received no responses
to
> my request.  I understand your argument, but I would like to see if there
is
> a difference in attitudes when the service/product is offered by the
public
> sector rather than the private sector.  I hear comments like "my tax
dollars
> already paid for this museum, why should I have to pay to get in" (for
> publically-supported places) as well as "visitors won't value us if they
> don't have to pay".  In the case of public museums, attendees aren't
getting
> a "free lunch," they're just paying for it in a different way.  Does this
> affect consumer  perception?  Does it even enter into the equation of
their
> perception, i.e., do visitors even remember most of the time that their
> taxes support public museums?  The Smithsonian is free and the public
> certainly values it very highly.  Is the Smithsonian an exception because
of
> their size, history, reputation, and quality of product?  If so, what
makes
> it the exception and how can other museums become so highly valued by
their
> own markets?
>
> I have no idea what the correct answers are to these questions.  I have
> anecdotal evidence for both sides of the discussion, but have run across
no
> data yet.  Our museum is located far enough away from any research library
> (at least 3 hours) that I can't do the research myself without an
overnight
> trip.  That's why I was hoping someone on the list could help.  Certainly,
> <someone> must have done some research or a market study of some kind
before
> making the critical decision of adding/changing/eliminating admission
fees.
>
> If I get any responses, I'll be happy to forward them to you.
>
> Elizabeth Moore
>
> -----Original Message-----
> From: Thomas C. Thompson <[log in to unmask]>
> To: [log in to unmask] <[log in to unmask]>
> Date: Tuesday, October 24, 2000 10:56 AM
> Subject: imputed value of museum offerings
>
>
> >Dear Dr. Moore:
> >
> >I would appreciate your forwarding any responses you receive to your
> >request for references regarding imputed value from admission fees that
> >are not sent to the list serve. Frankly, I'll be surprised if you
> >receive them, but I am curious. Over the years, I have seen many
> >examples of the truth of the assumption that you get what you pay, but I
> >would be curious to see any studies on the point. Since I believe the
> >underlying truth of the behavior (at least on the part of Americans) is
> >deep, I would actually be more persuaded by studies NOT confined to the
> >museum or nonprofit arena.
> >
> >I believe this point rests on deeply embedded attitudes in our culture.
> >"Your get what you pay for." "There is no such thing as a free lunch."
> >"If it seems too good to be true, it probably isn't." These are lessons
> >we teach our children to help them be savvy consumers. It is why we
> >throw most direct mail into the trash unopened or barely read. These
> >attitudes may run counter to the ideals of nonprofits, but I see there
> >impact on visitor behavior all the time.
> >
> >I spent twenty years in museums before starting an exhibit and program
> >development company in 1992. When I was first starting out in museums,
> >I  managed a small museum shop. I found a great close-out deal on sets
> >of high-quality coloring pencils. I bought a couple gross and was proud
> >to be able to offer them for $0.50 a set. I watched in dismay as parents
> >refused to buy them for begging children saying, "We're not buying
> >those. They're no good." When I re-priced them at $2.00 a set, they flew
> >out the door. It was a lesson in both retailing and human behavior I
> >have never forgotten. Later, as a planner of public programs, I saw how
> >a nominal fee increased attendance, and how an advance registration
> >payment significantly reduced no-shows.
> >
> >So I am feel persuaded by personal experience, but always curious to
> >learn more an issue that I believe has a big impact on cultural
> >organizations. My view is that many museum workers, with the best of
> >intentions, underprice their work and their institution's offerings. I
> >think it is one of many reasons why cultural organizations frequently
> >get marginalized. I would be interested in hearing your thoughts on the
> >matter, plus any experiences you care to share.
> >
> >
> >Sincerely,
> >
> >Thomas C. Thompson
> >Thompson Museum Consulting
> >332 Minnesota Street, Suite W-962
> >St. Paul, MN  55101
> >
> >651.229.0020
> >
>
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