Rock'n roll strategy: U2's Vertigo tour

For the past two decades, the Irish band U2 has chartered success on its own terms not just artistically, but also on the business side of the music industry. The 2005 Vertigo world tour, named after a single from their new album (How to Dismantle an Atomic Bomb), generated $260 million in revenue and drew more the three million people to 90 concerts, all of which were sell-outs.

by Ioana Popescu
Last Updated: 23 Jul 2013

This case study, written by Ioana Popescu, assistant professor of decision science at INSEAD, gives insight on marketing and pricing strategies.

The Irish band's strategy was defined on a worldwide basis for their tour. Ticket prices averaged US$ 90, down to US$ 49.50 at the low end and 165 US$ at the high end. As usual with U2, lowest price tickets were on the floor: "The best seats are the cheapest, and we want people to get excited," according to long-time U2 manager McGuinness.

This case uses the context of U2's performance at the Stade de France in Paris to discuss existing and potential differential pricing and segmentation strategies (by customer, product, channel and time). The case offers opportunities to discuss how to optimally set prices across market segments in the presence of various constraints (capacity, fairness). For example, would it be a good idea to give discounts to U2.com members, and if so what discount would be most profitable, and "fair" to the other segments?

The author also discusses the fact that the Stade de France pricing power depends largely upon the producer's bargaining power. She explains that some brands are so strong that they can practically command any price and fill any stadium - which was definitely the case for the Grammy award-winning Vertigo.

For other events, the Stade de France proposes a pricing scheme and promotion strategy to fill the stadium and maximize revenues.

Based on a recent rock band tour, the case offers an attractive setting to discuss pricing and marketing issues and is an interesting base for class discussions.

INSEAD 2006

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