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Cineplex Entertainment
The loyalty Program
Presented By: Gyan Prakash, 45
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Loyalty Program
Loyalty programs are structured marketing efforts that
reward, and therefore encourage, loyal buying behavior
behavior which is potentially beneficial to the firm

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Multiplexes
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Introduction
A multiplex is a movie theatre complex with multiple screens,
typically more than one screen within a single complex.
For example, 2 to 20 screens constitute a multiplex, whereas
theatres above 20 screens may be branded a megaplex
The largest of these complexes can sit thousands of people and
are sometimes referred to as a megaplex.
The structure of the multiplex mall explores the consumer
psychology, where customers who come with the intention of
watching a movie are made to pass all the floors in the shopping
mall.
It increases the possibility of their making some impulsive
purchases.

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New multiplexes are granted a five-year tax subsidy by state
governments:
Entertainment tax is waived for the first three years, and there's a
50 per cent and 25 per cent waiver for the fourth and fifth years
respectively (by which time capital costs are more than
recovered).
The largest multiplex in India is the 16-screen
multiplex Mayajaal in Chennai.
Contd.
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Major Multiplexes in India
Major Pan Multiplex Operators
PVR Cinemas 421 Screens (Gurgaon)
Inox Multiplex 358 Screens (Mumbai)
Big Cinemas 280 Screens (Mumbai)
Cinemax 138 Screens (Gurgaon)
Fun Cinemas 81 Screens (Mumbai)
Strong Regional and Upcoming National Players
Cinepolis (Worlds 5
th
largest, National)
Sathyam Cinemas (Tamilnadu & Andhra Pradesh)
E-Square (Pune)
Prasads (Telangana)
SRS Cinemas (NCR)
DT Cinemas(NCR)
Movie Time (Maharashtra)
24Karat (Maharashtra)

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About Cineplex
Cineplex entertainment (Cineplex) was founded in 1979 as a small
chain of movie theatres under the Cineplex Odeon name.
In 2003 under the direction of Onex corporation, a Canadian
private equity firm that held a major ownership claim in the
company, Cineplex merged with Galaxy entertainment inc. (Galaxy)
The CEO of Galaxy, Ellis Jacob, took over the newly merged
company.
In 2005 Cineplex Galaxy acquired its largest competitor, famous
players, and become Cineplex entertainment Canada's largest film
exhibitor.
In addition to seeing the movie, customer could eat at various
branded concession counters or play in the arcade.
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Contd.
In 2005, Cineplex expanded its strategy to focus on
developing new markets, using the theatre large screens
to showcase live events, like hockey games, wrestling, and
the metropolitan opera.
These events contribute Cineplex success, and increase
customer traffic and revenue per guest.
After acquisition of famous player In 2005, Cineplex
executive adjusted the pricing and products in the food
and beverage concession in 2006
With these moves Cineplex was able to increase its
average box office RPG to $7.73 and its average
concession RPG to $3.34
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Contd.
Cineplex is headquartered in Toronto, Canada,
and operates 161 theatres with 1,630 screens from coast
to coast, serving approximately 77 million guests
annually through the following theatre brands:

Cineplex Odeon
Silver City
Galaxy Cinemas
Scotiabank Theatres
Cineplex Cinemas
Cineplex VIP Cinemas

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Competitors of Cineplex Inc.
AMC Entertainment Holdings Inc.
Cinemark Holdings Inc.
Empire Company Limited

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Film Exhibition
The first Canadian film screening took place in 1896 in
Montreal, Quebec and the earliest cinema opened in 1906
Attending the cinemas also known as theatres, become a
social popular social activity, by the 1930s, a variety of
independent and studio owned theatres competed for
customer attention.
in 1979, Canada's first 18-theatre multiplex opened in
Taranto, Ontario, with several other multiplexes following
in subsequent year.
By 2005, only three major theatre companies existed in
Canadian movie and event exhibition market.

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A Growth opportunity
Action themed and Children movies purchased a high
volume of concession items which typically resulted in a
higher RPG than dramas.
Cineplex executive were able to distinguish the group of
customers that were particularly valuable
However with no actual link to individual customers, they
faced challenges targeting customer for specific movies
and special event.
Cineplex executive wanted to link box office and
concession purchases to a particular customer.
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About the SCENE Program
SCENE is the first and only entertainment rewards program in Canada.
It is a partnership between two of Canada's best known companies,
Scotiabank and Cineplex Entertainment.
The program lets members turn movie-going and banking
transactions into free movie tickets and more. Members not only
receive everyday savings on their concession purchases at Cineplex
Entertainment theatres but are also eligible for exclusive rewards and
contests.
Those with a Scotiabank account can link their SCENE membership to
their SCENE Scotia Card and earn reward points faster
As of December 31, 2013, SCENE Canadas top entertainment
loyalty program boasted more than 5.3 million members.
SCENE is better positioned than ever before to promote theatre
attendance and the digital commerce initiatives.
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State wise Number Of Single Screens
No. Name of State/Union Territories Cinemas
1 Andhra Pradesh 2809
2 Andaman & Nicobar 1
3 Arunachal Pradesh 1
4 Assam 82
5 Bihar 269
6 Chandigarh 6
7 Dadra & Nagar Haveli 2
8 Delhi/New Delhi 80
9 Goa, Daman & Diu 10
10 Gujarat 291
11 Haryana 106
12 Himachal Pradesh 10
13 Jammu & Kashmir 267
14 Jharkhand 90
15 Karnataka 950
16 Kerala 1015
17 Madhya Pradesh 201
18 Maharashtra (except Vidarbha) 504
19 Manipur 10
20 Meghalaya 7
21 Mizoram 2
22 Nagaland 4
23 Orissa 116
24 Pondicherry (U.T.) 25
25 Punjab 175
26 Rajasthan 133
27 Sikkim 2
28 Tamil Nadu 1546
29 Tripura 1
30 Uttar Pradesh 970
31 Uttaranchal 46
32 Vidharbha (Maharashtra) 106
33 West Bengal 330
TOTAL 10167
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Entertainment Tax Rates
Sr No State
Entertainment Tax Applicable on
Gross Ticket Value
1 Maharashtra 45% (Nil for Marathi Films)
2 Gujarat 20%
3 Delhi 20%
4 Uttar Pradesh 60%
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Punjab,Rajasthan,Assam,
Uttaranchal,Jammu& Kashmir
and Himachal Pradesh
Nil
6 Haryana 30%
7 Andhra Pradesh 20% (15% for Telugu Films)
8 Karnataka 30% (Nil for Kannada Films)
9 West Bengal 30% (2% for Bengali Films)
10 Orissa 25%
11 Bihar 50%
12 Jharkhand 110% (Nil for Jharkhand Films)
13 Tamil Nadu 15% (Nil for Tamil Films)
14 Kerala 30%
15 Madhya Pradesh 20%
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Challenges for Multiplexes And Cineplex's
1. Slowdown in economy
2. Alternatives modes of entertainment
3. Uncertainty over entertainment tax
4. Piracy
5. Single Screens Are Going To Die Soon: Multiplexes are
preferred due to factors like crowd and presence of
shopping malls.
6. Slowdown In Content Supply : Multiplexes/ Cineplex's
thrive and have to depend on the better supply of films
from producers.



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Observation on the motivations and
frequency of movie attendance by age
Frequency,
reasons for
attendance
Age segment label
13-15 16-19 20-24 25-35 36-54 55+
teenagers Young
adults
Young
working
Young
families
Older
families
retirees
Low (special
events)
* *
Medium (special
movies)
*
High (routine) * * *
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Teenagers: use for social gathering purpose
Young adults: in this segment are still high school and other
post secondary student
Young working: has highest disposable income and they
combine movies with socialisation at other venues such as
bars and restaurant
Young families: they take their children to special movie
occasionally and balanced family and work related obligation
Older families: attends theatre only for special event due to
the busy work and family life
Retirees: this segment has significant free time to attend
movies.

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Customer Relationship Management
CRM is a marketing approach in which a company collects
individual purchasing information to improve its ability to
understand and respond to customer desire and buying pattern.
This information is typically stored in a central data base from
which the company manager can analyse trends and purchasing
behaviour of particular market segment.
Better understanding of customer enables organisations to
develop target campaigns to increase marketing effectiveness
such as restructuring its product and services.
A recent trend for CRM programs was to offer incentives such as
discounts or points that could be collected and redeemed for
merchandise in return for the customer permission for the
company to collect data on the customers buying habits.

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Creating Loyalty
Cineplex captured 65% market share in Canada
Cineplex managers to explore way to increase customer spending
and frequency, particularly with in the lucrative 16-24 year old
segment
Before merging with Cineplex Odeon, Galaxy entertainment had
established Galaxy Elite card, which offer customers the
opportunity to accumulate points toward free movie viewing.
Although this program had no CRM capabilities, it had been
successful in driving customer traffic
In a survey Cineplex customers in May and June 2005, 95% of
respondent stated they were interested in joining a movie reward
program.
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Loyalty Strategic Alliance
Strategic Alliance
60 million Cineplex guests - 132 Cineplex locations
967 Scotiabank Canadian branches 6 million Scotiabank Canadian customers
To create Canadas first and foremost entertainment loyalty
program
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Loyalty Partner option
Internal Development
under this option, Cineplex manager would develop and operate
the program
The organisation would incur the entire cost estimated at 5.5
million in the first year with diminishing cost in subsequent years
The company would also be fully exposed to the financial risk of
unredeemed points and could face difficulty in divesting the
program, if it proved unsuccessful, a new department need to be
created to manage the exit of the program.

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Flight miles partnership
Flight miles was the top Canadian loyalty program with 72% of
Canadian households as active members
This program gave cardholders the opportunity to earn leisure
and travel rewards by purchasing products at various retailers
across the country
Flight miles executives viewed Cineplex as an opportunity to
increase youth membership and Cineplex executives to propose a
special joint program
Traditional flight miles cards would be used to collect points
Access to the flight miles program would cost Cineplex yearly fees
of approx $5 million
To make the proposal more attractive flight miles executive
offered to contribute $2,50,000 to launch a Cineplex designed
and initiated marketing campaign
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Scotia bank Proposal
They are interested in acquiring new youth accounts
Scotia bank proposed a three-card rewards strategy, it would be a
50-50 partnership
The basic reward card would be Cineplex branded and used at
theatres debit and credit cards would act as reward accelerators
Holders of basic Cineplex theatre cards would not be required to
open an account at Scotia bank
Multiple card system might discourage some customers who disliked
carrying additional cards
Cost to develop Cineplexs portion of partnership is $3m, $1.7m,
$1.9m in year 1, 2 and 3 respectively
Cineplex executives would not be able to access individual level
banking information on the Scotia bank program users
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Structuring The Reward Program
Lewthwaite believed it was essential to create a program that
would appeal to customers.
If Cineplex went forward with flight miles partnership an offer of
10 Flight Miles points per transaction would be required to align
with cardholder expectations and could be supplemented with
Cineplex discounts.
If Cineplex went forward with other loyalty partnerships, it would
have full design control over the reward structure of the
program.
Determining the number and value of points to be given per
transaction and the required price per transaction needed to
determine.
Number of points required for particular rewards and whether
different levels should be created
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She drafted a preliminary list of four unique reward structures
she thought could be effective, but was unsure, which, if any,
would maximize customer appeal through retail value while
minimizing costs.
Option 1 Option 2 Option 3 Option 4
Membership fee No One-time $2 Annually $5 No
Permanent concession
discount
- 10% 15% 10%
Points? Yes Yes No Yes
Sign-up points 500 100 - 250
Points per adult movie
transaction
100 100 - 100
Points per concession combo
transaction
- 75 - -
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Selecting The Data Base Vendor
In order to manage customer data e-communication site they
need to select data base vendor.
The vendor should have strong web design capabilities and a
technology platform that could collect a variety of data on
Cineplexs customer.
Cineplex releases a request for proposal (RFP) to 3 major
companies: Alpha, Kappa and Gamma
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The Marketing Communication Campaign
Cineplex executives wanted to enrol 500000 customers per year for first 3
years in any loyalty program, So that they get maximum and meaningful
customer information and then it focus on the customer retention.
Launching the loyalty card would also require a marketing campaign to fit a
variety of geographic markets.
Lewthwaite had a budget of $30,00,000 and she want to make some creative
decisions including the name of the program, the marketing message to
customers and the media to be used to deliver the message.
In-Theatre Advertising
Newspaper Advertising
Radio Advertising
Online Advertising
Grass Roots Initiatives
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Cineplex Entertainment - Merchandising
Reel
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