Second Run Movie Theaters Assessing its Value to

Second Run Movie Theaters Assessing its Value to Customers NCCU – IMBA Company Marketing Final Project LOGO Presented by: Rakesh Prasad - Alex Yong - Himansu Das - Shubha HS - Marian Jarquin 1

Agenda 1. Introduction 2. Research Questions & Objectives 3. Field Observation 4. Hypotheses 5. Methodology 6. Findings 7. Conclusion 2

Introduction 3

Movie Theaters 1 st Run Theater • New Release Movies • Located at High End Areas • Prices according to location 2 nd Run Movie Theater • Presents those new releases after 1 -2 months • Located at middle or low areas • Lower Prices Art House Theater • Art Films Adult Theater • Pornography Films • New Concept: Art films showed at pubs • Prices depend on location 4

1 st Run vs. 2 nd Run Movie Theaters PRICE 1 st Run Movie 2 nd Run Movies (Vie. Show Cinemas) (Qiao Xing) NT$ 290 Savings Time Lag NT$ 70 - NT$100 60%- 80% Around 6 weeks 5

Research Questions & Objectives 6

Research Question & Objectives v. How do 2 nd Run Movie Theaters capture value for customers? Explore the Business Model v Is there a potential demand to open a 2 nd run movie theater near NCCU? Market Research 7

Field Observation nd 2 Exploring Run Movie Theaters’ Business Model 8

Pricing & Promotion Pricing Guang Ming (Muzha) Jia-jia Lai-lai (Jing. Mei) Qiao Xing Theater (Jing. Mei) 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 - Members: NT$ 50 – Fridays Non-members: NT$90 Fridays NT$ 90 - Last movie of the day NT$50 each –Purchase NT$ 60 - Last of 10 ticket (group movie of the discount) day 9

Advertising v Limited or No Advertising: Except for Hsi-men Theater which promotes school concerts. v Taiwan. Fun. com: Brief information about theaters v MRT Station: Information Board 10

Location Frequently visited areas: v Next to main road v Near to MRT stations v Close to night markets v Close to schools/universities v Close to other recreational businesses 11

Customer Segmentation Students Parents & Children Monday Movie Goers Senior Citizen 12

Market Research New 2 nd run movie theater near NCCU? 13

Hypotheses Seven hypotheses formulated for the purpose of the research were related to three important factors: 3 Important Factors Distance/ Location Demand Text 2 nd Run Movie Theaters Price 14

Methodology 15

Methodology Conducted a survey to collect Primary Data: Design Question A total of 15 questions were asked: 10 Q’s– Movie Attributes 5 Q’s Demographic Sample Total sample of 82 NCCU students and Muzha residents Limitations Excluded 9 surveys due to incomplete info. 16

Methodology Hypotheses analysis: v Z distribution and T distribution were used as the statistical tool to test the hypotheses. v Results: Price and location are significant factors affecting the demand for 2 nd Run Movies. Potential demand from NCCU students and Muzha Residents. 17

Findings New Business Model 18

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 19

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 2 nd Run Movie Theater would be nearby: § MRT station § Night market § Fun, entertainment and leisure related activities/businesses 20

Other Important Findings è Target Market: Survey result indicates that difference in “income levels” and “age” does not affect individual’s preference for 2 nd run movies 21

Other Important Findings è 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 2 nd 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 22

Other Important Findings è 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). 23

What is the Potential Demand? BENCHMARK “QIAO XING THEATER” Monthly Demand Average Price Monthly Revenue Approx. 10, 600 customers NT $85 NT$901 K 24

What is the Potential Demand? Target Market/Population Muzha Residents 127, 523 NCCU Students 14, 940 Total Population 142, 463 Potential Demand 2 nd Run Movie Theater Viewers *(21%) 29, 917 * ρ = 21% (Sample proportion choosing 2 nd RM) 25

What’s the Potential Demand? v 95 % C. I. estimate for π is between 11% and 30% v 95% C. I. estimate for potential demand: 16, 098 – 42, 454 customers No. of CUSTOMER VISITS Frequency Worst Case Scenario (WCS) Potential Demand (PD) * Fortnightly Monthly 3, 220 6, 440 5, 984 11, 968 * 20% (Probability to visit the new 2 nd RMT at least once every 2 weeks) 26

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 27

NEXT STEP v. Accomplished our research objectives: New Business Model Is there Potential Demand ? v. Based on the market research, if any investor is interested in opening a New 2 nd Run Movie Theater, estimate of costs (Fixed and Variable) are required. 28

Conclusion 29

Conclusion èThere is potential demand from the NCCU students and Muzha residents to open a 2 nd Run Movie Theater. èOpening a theatre close to NCCU may not be appropriate due to lack of accessibility to entertainment and other leisure related activities/businesses. èThe alternative concept cannot be accommodated as customers are too price sensitive. 30

Thank you! 31

BACK UP 32

Other Important Findings v 2 nd Run Movies are less popular amongst target population v. Competitors: DVD 33

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. 34

Cycle Diagram Add Your Text Cycle name Text 35

Methodology SAMPLE A total sample of 84 NCCU students and Muzha residents SURVEY A total of 15 questions were asked: 10 – Movie Attributes LIMITATIONS Excluded 9 surveys due to incomplete information 5 - demographic 36

3 -D Pie Chart TEXT TEXT 37

Marketing Diagram Customer Segmentation Students Families & Children Residents around the area Low Income workers 38