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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
Movie Theaters
1st
Run
Theater
•New Release
Movies
•Located at
High End
Areas
•Prices
according to
location
2nd
Run
Movie
Theater
Art
House
Theater
•Art Films
•Presents those
new releases after
1-2 months
•Located at
middle or low
areas
• Lower Prices
Adult
Theater
•Pornography
Films
•New Concept:
Art films
showed at
pubs
•Prices
depend on
location
4
1st Run vs. 2nd Run Movie Theaters
PRICE
1st Run Movie
2nd Run Movies
(VieShow Cinemas) (Qiao Xing)
NT$ 290
Savings
Time
Lag
NT$ 70 - NT$100 60%- 80% Around
6 weeks
5
Research Questions &
Objectives
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
7
Field Observation
nd
2
Exploring
Run Movie
Theaters’ Business Model
Pricing & Promotion
Promotion
Pricing
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
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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
10
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
Students
Parents
&
Children
Monday
Movie Goers
Senior
Citizen
12
Market Research
New 2nd run movie theater
near NCCU?
Hypotheses
Seven hypotheses formulated for the purpose of the
research were related to three important factors:
3 Important Factors
Distance/
Location
Demand
Text
2nd Run Movie
Theaters
Price
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Methodology
Methodology
Conducted a survey to collect Primary Data:
Design Question
A total of 15
questions were
asked:
10 Q’s– Movie
Attributes
5Q’s Demographic
Sample
Total sample
of 82 NCCU
students and
Muzha residents
Limitations
Excluded 9
surveys due to
incomplete info.
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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.
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Findings
New Business Model
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 Price
Monthly
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
142,463
Potential 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
Frequency
Worst Case Scenario
(WCS)
Potential Demand
(PD)
* Fortnightly
Monthly
3,220
6,440
5,984
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.
28
Conclusion
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.
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Thank you!
BACK UP
Other Important Findings
2nd Run Movies are less popular
amongst target population
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.
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Cycle Diagram
Add Your Text
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Text
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Cycle name
Text
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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
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3-D Pie Chart
TEXT
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Marketing Diagram
Customer Segmentation
Students
Families
&
Children
Residents
around the
area
Low
Income
workers
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