Second Run Movie Theaters

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

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

3. Introduction

4. Movie Theaters 2nd RunMovie Theater Art House Theater 1st Run Theater Adult Theater • 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

5. 1st Run vs. 2nd Run Movie Theaters

6. Research Questions & Objectives

7. 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

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

9. Pricing & Promotion Pricing Promotion

10. 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

11. 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

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

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

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

15. Methodology

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

17. 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.

18. Findings New Business Model

19. 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

20. 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

21. 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

22. 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

23. 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).

24. What is the Potential Demand?

25. What is the Potential Demand? * ρ = 21% (Sample proportion choosing 2nd RM)

26. 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 * 20% (Probability to visit the new 2nd RMT at least once every 2 weeks)

27. Estimated Monthly Revenue BENCHMARK “QIAO XING THEATER” Monthly Revenue = NT$ 901,000

28. 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.

29. Conclusion

30. 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.

31. Thank you!

32. BACK UP

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

34. 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.

35. Add Your Text Text Text Text Cycle name Text Text Cycle Diagram

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

37. 3-D Pie Chart TEXT TEXT TEXT TEXT TEXT TEXT

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