Asked by Alicja Gawlik on Jun 12, 2024

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Amusement Park / Cola Tie-in
The Six Flags Over Texas amusement part in the middle of the Dallas-Fort Worth Metroplex has a tie-in marketing campaign with Coca-Cola during the summer.In local grocery stores,some Coke cans offer $5 off admission to the park.Why does Six Flags limit these cans so that none are sold further than 20 miles from the park?​

Tie-in Marketing

A sales strategy where one product is sold or marketed only in combination with another product.

Coca-Cola

A multinational beverage corporation best known for its flagship carbonated soft drink, Coca-Cola.

Six Flags

A chain of amusement parks and theme parks in North America known for its thrilling rides and entertainment.

  • Understand the strategies companies implement to avoid arbitrage when practising price discrimination.
  • Comprehend the approaches to strategic pricing based on insights derived from audience segmentation.
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Armaan SinghJun 16, 2024
Final Answer :
This is a price discrimination scheme trying to separate locals from tourists.Tourists do not get to go to the park as often as locals and so their demand is less elastic.Locals have many opportunities to visit the park and so their demand for additional visits over the summer is relatively elastic.The discount on the Coke can is an attempt to offer lower prices to the more elastic locals.Six Flags limits the distribution of the specially marked cans to just locals as a way to limit arbitrage.