Qualitative Market Research

Research Proposal for opening multiplexes in tier 2 and tier 3 townsResearch Proposal for opening multiplexes in tier 2 and tier 3 towns
Submitted to Prof. Bhavani Shankar IIM Indore
12/10/201312/10/2013

Submitted by Preethi S Preethi S 2012PGP274 IIM Indore

Abstract The objective of this research is to identify the attractiveness of opening multiplexes in tier 2 and tier 3 theatres and the impact in profitability for the multiplex owners as well as for the producers and distributors. Effort is also made to find out if there is really a gap between the need and supply in these towns. It also includes finding out the reasons for the increase in demand for multiplexes in the towns. In-depth interviews, Focus Group Discussions and Observation are the qualitative methods proposed in order to gather the required data. Industry Overview The cinema exhibition industry in India is growing at 10% per annum driven by multiplexes, which are expanding rapidly in major metropolitan cities as well as second and third tier cities. Favourable demographics in a cinema-crazy nation, tax exemptions, and quality locations such as malls, are driving growth of multiplexes in India. The industry is characterized by seasonality, low screen density, increasing average ticket prices, and reducing shelf life of movies. The key trends identified include producers bypassing distributors, shift to digital cinema, and alternate content in multiplexes, retail partnerships, and new single screen formats. The competitive landscape includes major multiplex operators in the market since they dominate an industry where single screen cinemas are highly fragmented. Comparison parameters include number of screens, number of cinemas, footfalls and occupancy ratio. Footfalls at multiplexes increased 1.5 times over the last three fiscals as rising spending power in smaller cities saw more moviegoers flock to such entertainment outlets. This increase has fuelled expansion in the domestic exhibition industry through both organic and inorganic routes. An ET Intelligence Group analysis shows that between 2010-11 and 2012-13, most exhibition companies increased their penetration in tier-II and -III cities, pushing up the total screen count in the country by 43%. About 90% of these screens were added in malls in the smaller cities. Revenues, too, rose for most companies due to higher average ticket price. The good response from emerging cities has also seen exhibition companies increase their average ticket price by 7-8% to about 160, which, in turn, has boosted revenues. The last three fiscals have also seen companies' revenues grow at an average CAGR (compounded annual growth rate) of 35.2%. Operating profits, too, have grown at a CAGR of 42.7%, reflecting the impact of increasing footfalls and the resultant increase in average ticket price.
Formatted: Underline

Formatted: Underline

Formatted: Underline

Research Problem Is there really a demand for an increased number of screens in tier 2 and tier 3 towns? Even though the cost of opening multiplex screen in tier 2 and tier 3 towns is relatively cheaper,
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will it be profitable in terms of pulling crowds into the theatre. Are there really no other entertainment options in such towns? Are people in such towns willing to pay for tickets in multiplexes? Will this be a really profitable venture for multiplex operators? Qualitative techniques to be used for obtaining data In-depth interviews, Focus group discussions and observation are the methods of inquiry recommended for this research. The approach and rational behind employing each of this method is discussed in the following sections. In-Depth Interview The in-depth interview is a technique designed to elicit a vivid picture of the participants perspective on the research topic. The researchers interviewing techniques are motivated by the desire to learn everything the participant can share about the topic of research. Researchers engage with participants by posing questions in a neutral manner, listening attentively to participants responses, and by asking follow-up questions and probes based on those responses. This is an effective qualitative method for getting people to talk about their personal feelings, opinions, and experiences. They are also an opportunity to gain insight into how people interpret and order the world. We can accomplish this by being attentive to the causal explanations participants provide for what they have experienced and believe and by actively probing them about the connections and relationships they see between particular events, phenomena, and beliefs. Rational: It would be suitable if the interviews are conducted with distributors who are important constituents. It may be cumbersome to take up such work with respondents. In this case, in-depth interview is suggested to respondents of tier 2 and tier 3 towns wherein they will be probed about how often and why do they go to multiplexes, what are their other sources of entertainment, how much are they willing to spend on an average in a single visit and so on. This technique has been chosen because this will result in getting non-manipulated answers from the respondents and without any interviewer bias. Each question is to be openended and elicit as much response from the interviewees as possible. This will help in gaining different perspectives from different respondents and help us discover data which was not considered before. Respondents will also not be affected by group think and may find it more comfortable to divulge information when it is done in a one-on-one basis. Focus Group Discussions A focus group is a carefully planned discussion designed to obtain a selected group of individuals perceptions regarding a defined area of interest. The area of interest in our case to obtain the attractiveness and profitability of multiplexes in tier 2 and tier 3 towns. A focus group is an ideal approach for examining the stories, experiences, points of view, beliefs, needs and concerns of individuals. Through this method we can ask participants to develop their own questions and frameworks as well as to seek their own needs and concerns in their
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own words and on their own terms. Group work allows the researcher to access different communication forms which people use in their day-to-day interaction. Being able to gain access to diverse forms of communication is valuable since it may not be possible, or can be difficult, to capture the knowledge and attitudes of individuals by asking them to respond to more direct questions. FGD provides an economical data collection option and captures a wider range of responses than individual interviews. Besides it reveal insights and nuances that other research methods cannot. Rational:this will be of best use The logic behind choosing FGD is to profile respondents with similar characteristics and elicit as much diverse set of information from them as possible through a healthy discussion. It might help in one respondent giving a different angle to the problem and subsequently other respondents also finding a connect with it which might lead to further discussions on the topic. Hence with FGD various topics related to our research area will be discussed in detail and valuable information can be gathered. Observation Observation is a way of gathering data by watching behaviour, events, or noting physical characteristics in their natural setting. Observations can be overt or covert. The benefit of covert observation is that people are more likely to behave naturally if they do not know that they are being observed. In our research methodology, covert observation is to be followed to observe the way customers behave in multiplexes, how much time and money do they spend, how many footfalls do the movie screens get immediately after a movie is released and after a month and so on. Rational: Through this technique the observer can get real time data and facts to come to a conclusion about whether or not it is profitable to invest in multiplexes in tier 2 and tier 3 towns as well as what is the difference in revenues between multiplexes and single screen theatres. The behavior of customers can also be noticed precisely by observing over a period of time. The existing scenarios can also be observed to suggest changes if multiplexes are to be built. Profiling of Respondents In-Depth Interview A maximum variation sample is to be chosen consisting of at least 50 respondents with a mixed age group of 18 to 60 years. This strategy helps us to get a good mix on as many factors as possible so that we can confidently project or generalize the findings regarding the phenomenon of interest back to a target population. A probabilistic random sampling is to be used to get such a mix. We are attempting to build in diversity on certain key factors such as age, income, education, gender etc. to give us a at least some generalizing power over those factors, as well as to look at the impact they have in our area of interest. Besides by this sampling technique we can cover a wide range of respondents involved in consumer decision
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making process i.e. includes influencer, buyer, and referrer. Single screen owners, existing multiplex owners, residents of the town are our target sample to be interviewed. A comfortable location and ambience is to chosen to get the best results. Focus Group Discussion Groups are led by a moderator who seeks to create a non-threatening environment for all participants. The moderator has to use a detailed discussion guide of open-ended questions that follow a logical sequence. Responses and observations are to be recorded on the spot. Each group should consist of 8-10 people of homogenous sample so that they can exchange ideas, opinions and give valuable insights. 4 group discussions are to be conducted with age groups of 16-25, 26-35, 36-45 and 46-55 years. Multiple focus groups are held to draw out patterns. It increases the reliability of results. Observation Here the current customers in multiplex and single screen theatres are observed for duration of two months to notice patterns and changes in behavior. Affluent people and their spending patterns are to be observed. People in age groups of 16 to 55 years are our target. Behavior of people when they come with their families and with their friends and their spending pattern in each case is to be noticed and recorded. Recording sheets and checklists are to be used. Guide to be used for data collection (Questionnaire) Lead questions for In-depth Interview 1. Whom do you go to movies with and how often? 2. What are the factors influencing your choice of theatres? 3. Do you decide the theatres based on movies or do you decide the movies based on theatres and why? 4. What are the forms of entertainment options do you indulge in? 5. How much do you generally pay for a movie ticket and what is the maximum you are willing to pay? 6. What all features would you expect from a movie theatre? 7. What are the other attractions you would like in a multiplex? 8. Do you always get tickets in the current theatres or is there a scarcity? 9. On what occasions do you go to movies? Who makes the choice? 10. Would you prefer paying less for lower features or paying more for best features and what is the trade-off according to you? 11. Do you think you have sufficient theatres in your town? 12. Name some famous multiplex brands that you are aware off 13. Which brand do you like the most and why? 14. What is your favourite mode of entertainment? 15. How often the theatre is crowded after a movie gets released?

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Lead Questions for FGD 1. 2. 3. 4. 5. 6. 7. Who influences your decision of going to theatres? Do you prefer going to multiplex or single screen? How much do you spend on an average when you go to a multiplex? What are the other attractive features in a multiplex? What parameters affect your choice of a theatre? What other types of entertainment do you have? How much time do you spend in a multiplex?

Lead topics to be observed 1. 2. 3. 4. 5. What is the average number of people coming together for a movie? How much time do they spend in a multiplex? How much money do they spend? Do food stalls play an important role in crowd pulling? What is the difference in footfalls in single screen and multiplex?

You need questions for distributors as well which will provide an overall picture of the industry and its dynamics. Data Analysis The following steps are to be followed to analyze the data collected: 1. Narrative: These techniques include suggested actions that are preparatory to the coding process or which help the researcher to derive meaning through narrative approaches, such as narrative reading or writing of textual data. Some approaches can be to create summaries of interviews, writing up critical events chronologically, making metaphors etc. 2. Coding: These techniques apply to those actions that involve organizing and reorganising the data into categories that enable the researcher to identify relationship between and among categories. Procedures include developing a conceptual framework, identifying data patterns, developing meanings from sentences, Clustering, Noting patterns and themes etc. 3. Interpretation: These techniques are those actions that enable the researcher to make meaning from the narrative and coding activities and facilitate the researchers understanding of the conceptual framework generated through the coding process. Engage in speculation, look for relevance to program, shift focus from individual cases to groups, build a logical chain of evidence, evaluate the project, make inferences using inductive reasoning, make if-then tests etc. 4. Confirmation: These techniques enable researcher to be confident that the interpretations they have derived are from the data and not from researcher

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construction. Triangulate, count, make contrasts and comparisons, look for negative evidence, compare to a known case etc. 5. Presentation: These techniques are those actions that researcher may use to present the findings to a particular audience in a cogent manner and which serves as a tool for further analysis and improvement. Draw visual display, consider the audience, write up results in case study forms etc. Expectations from the Study The purpose of analysis is to interpret and, hence, convert the data into a story that describes the phenomenon or respondents views, using the emic perspective. The process typically involves collecting the data that will initiate the study, breaking down the data into various categories and making connections between these categories in terms of relationships among them, then visually displaying the interpretation and writing it up for dissemination. The expectation in this case is to understand the demand for multiplexes in tier 2 and tier 3 towns and their profitability in opening up more and more screens. A conceptual mapping of demand and supply is made which will give a clear understanding to multiplex owners regarding the opportunities available. The target audience have also been identified through observations and this will help in promotions once the multiplexes are opened. References 1. http://articles.economictimes.indiatimes.com/2013-1004/news/42718345_1_exhibition-companies-inox-leisure-nitin-sood 2. http://www.deloitte.com/assets/dcom-india/local%20assets/documents/me%20%20whitepaper%20for%20assocham.pdf 3. http://www.stockmarketsreview.com/extras/multiplex_companies_in_india_are_offeri ng_a_bouquet_of_innovative_services_to_lure_people_20111209_217756/

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