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Company

LOGO

Second Run Movie Theaters

Assessing its Value to Customers

NCCU – IMBAMarketing Final Project

Presented by:

Rakesh Prasad - Alex Yong - Himansu Das - Shubha HS - Marian Jarquin

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Agenda

1. Introduction 1. Introduction

2. Research Questions & Objectives 2. Research Questions & Objectives

3. Field Observation 3. Field Observation

4. Hypotheses 4. Hypotheses

5. Methodology5. Methodology

6. Findings 6. Findings

7. Conclusion7. Conclusion

Introduction Introduction

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Movie Theaters

1st Run Theater

2nd

RunMovie

Theater

Art House

Theater

AdultTheater

•New Release Movies

•Located at High End Areas

•Prices according to location

•Art Films

•New Concept: Art films showed at pubs

•Prices depend on location

•Pornography Films•Presents those

new releases after 1-2 months

•Located at middle or low areas

• Lower Prices

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1st Run vs. 2nd Run Movie Theaters

PRICE

1st Run Movie (VieShow Cinemas)

2nd Run Movies

(Qiao Xing) SavingsTime Lag

NT$ 290 NT$ 70 - NT$100 60%- 80% Around 6 weeks

Research Questions & Objectives Research Questions & Objectives

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Research Question & Objectives

How do 2nd Run Movie Theaters capture value for customers?

Explore the Business Model

Is there a potential demand to open a 2nd run movie theater near NCCU?

Market Research

Field ObservationExploring 2nd Run Movie

Theaters’ Business Model

Field ObservationExploring 2nd Run Movie

Theaters’ Business Model

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Pricing & Promotion

Guang Ming

(Muzha)

Jia-jia Lai-lai

(JingMei)

Qiao Xing Theater

(JingMei)

Hsimen Theatre

(Ximen)

Universal Theater

(Nanjing E. Rd)

NT$60 – 2 non hit movies

NT$ 80 – Student

NT$ 70 – Student

Members:

NT$90 – Flat

NT$ 150 - Weekends

NT$60 – 1 block buster movie

NT$110 – Non Students

NT$100 – Non Students

Non members:

NT$190 – Flat

NT$ 130 – Weekdays

NT$50 each –Purchase of 10 ticket (group discount)

NT$ 60 - Last movie of the day

- Members:

NT$ 50 – Fridays

Non-members: NT$90 - Fridays

NT$ 90 - Last movie of the day

Pric

ing

Pro

mot

ion

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Advertising

Limited or No Advertising: Except for Hsi-men Theater

which promotes school concerts.

TaiwanFun.com: Brief information about the

theaters

MRT Station: Information Board

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Location

Frequently visited areas:

Next to main road

Near to MRT stations

Close to night markets

Close to schools/universities

Close to other recreational businesses

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Customer Segmentation

Customer Segmentation

StudentsMonday

Movie GoersParents & Children

SeniorCitizen

Market Research New 2nd run movie theater

near NCCU?

Market Research New 2nd run movie theater

near NCCU?

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Hypotheses

Seven hypotheses formulated for the purpose of the research were related to three important factors:

Demand

Distance/Location

PriceText

2nd Run Movie Theaters

3 Important Factors

MethodologyMethodology

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Methodology

SampleSample LimitationsLimitations

Total sample of 82 NCCU students and

Muzha residents

Excluded 9 surveys due to incomplete info.

Conducted a survey to collect Primary Data:

Design QuestionDesign Question

A total of 15 questions were asked:

10 Q’s– Movie Attributes

5Q’s - Demographic

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Methodology

Hypotheses analysis:

Z distribution and T distribution were used as the statistical tool to test the hypotheses.

Results:

Price and location are significant factors affecting the demand for 2nd Run Movies.

Potential demand from NCCU students and Muzha Residents.

Findings New Business ModelFindings New Business Model

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Price

Important points to be considered while deciding on the price:

Industry average NT$ 60-90

95% Confidence Interval estimate for average price is between NT$ 87 – 100

Nearest competitor price (Guang Ming Theater in Muzha) is NT$ 60

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Location

Important point to be considered while deciding on the location:

Distance is a significant factor: our survey indicates that most people are not willing to travel for more than 20 minutes to get to the new cinema.

Accessibility plays an important role in generating demand, therefore the ideal location for a 2nd Run Movie Theater would be nearby: MRT station Night market Fun, entertainment and leisure related activities/businesses

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Other Important Findings

Target Market:

Survey result indicates that difference in “income levels” and “age” does not affect individual’s preference for 2nd run movies

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Other Important Findings

Creating Value

Explored the opportunity for offering additional fun and recreational activities under the same roof

78% of the respondents supported the idea

Research shows that 2nd run movie viewers are price sensitive and would not be willing to pay higher price to have access to such activities under the same roof

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Other Important Findings

Other considerations

Movie selection/genre: students preference are Drama, Comedy and Action.

Advertising: low budget banners, brochures, promote and sponsor school concerts (PR), and customer loyalty program (membership).

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What is the Potential Demand?

BENCHMARK “QIAO XING THEATER”

Monthly Demand Average PriceMonthly Revenue

Approx. 10,600 customers

NT $85 NT$901 K

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What is the Potential Demand?

Target Market/Population

Muzha Residents 127,523

NCCU Students 14,940

Total Population 142,463Potential Demand

2nd Run Movie Theater Viewers *(21%)

29,917

* ρ = 21% (Sample proportion choosing 2nd RM)

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What’s the Potential Demand?

95 % C.I. estimate for π is between 11% and 30%

95% C.I. estimate for potential demand:

16,098 – 42,454 customers

No. of CUSTOMER VISITS

FrequencyWorst Case Scenario

(WCS)Potential Demand

(PD)

* Fortnightly 3,220 5,984

Monthly 6,440 11,968

* 20% (Probability to visit the new 2nd RMT at least once every 2 weeks)

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Estimated Monthly Revenue

Price

NT$60

Price

NT$90

Price

NT$120

Monthly Revenue NT$

(MPD = 11,968) 718,020 1,077,030 1,436,040

Monthly Revenue NT$ (WCS = 6,440) 386,340 579,510 772,680

BENCHMARK “QIAO XING THEATER”

Monthly Revenue = NT$ 901,000

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NEXT STEP

Accomplished our research objectives: New Business Model Is there Potential Demand ?

Based on the market research, if any investor is interested in opening a New 2nd Run Movie Theater, estimate of costs (Fixed and Variable) are required.

ConclusionConclusion

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Conclusion

There is potential demand from the NCCU students and Muzha residents to open a 2nd Run Movie Theater.

Opening a theatre close to NCCU may not be appropriate due to lack of accessibility to entertainment and other leisure related activities/businesses.

The alternative concept cannot be accommodated as customers are too price sensitive.

Thank you!Thank you!

BACK UP

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2nd Run Movies are less popular amongst target population

Competitors: DVD

Other Important Findings

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Methodology

Conducted a survey to collect Primary Data:

Surveyed a total sample of 84 NCCU students and Muzha residents.

Excluded 9 surveys due to incomplete information.

A total of 15 questions were asked.

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Cycle Diagram

Text

TextText

Text

Text

Cycle name

Add Your Text

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Methodology

SAMPLESAMPLE LIMITATIONSLIMITATIONSSURVEYSURVEY

A total sample of 84 NCCU students and Muzha residents

Excluded 9 surveys due to incomplete information

A total of 15 questions were asked:

10 – Movie Attributes

5 - demographic

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3-D Pie Chart

TEXT

TEXT

TEXT

TEXTTEXT

TEXT

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Marketing Diagram

Customer Segmentation

StudentsResidents

around the area

Families & Children

Low Incomeworkers