Limelight case
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York University *
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2020
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Marketing
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Feb 20, 2024
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Problem
Repositioning Challenges: Despite efforts to reposition the cinema from a pornographic film house to a first-run art film cinema and later to a repertory theatre, Lime Light Cinema continues to face challenges associated with its previous image and brand perception.
Low Attendance: The average audience size per show remains well below the theater's capacity, indicating low attendance and underutilization of resources. Even with the new membership system and lower admission prices, Lime Light Cinema struggles to attract sufficient patrons to achieve profitability.
Competition and Market Dynamics: Lime Light Cinema competes with eight commercial theaters and one repertory theater in Victoria, as well as alternative entertainment options such as home streaming services. The theater's efforts to differentiate itself and carve out a niche in the market are hindered by strong competition and changing consumer preferences.
Limited Promotional Reach: The cinema's reliance on traditional advertising channels, such as newspapers, and limited digital presence may limit its ability to reach and engage potential audiences, especially younger demographics who are more active on social media and digital platforms.
Financial Viability: Lime Light Cinema's current revenue levels are insufficient to sustain operations and meet the company's financial objectives. Despite implementing changes to the pricing strategy and candy bar operations, the cinema struggles to achieve profitability and faces pressure to increase local profitability by at least 25%.
Uncertain Future: The evolving landscape of the entertainment industry, including technological advancements and changing consumer behaviors, presents uncertainties and challenges for Lime Light Cinema's long-term viability and sustainability.
Strengths:
Variety of Films: Lime Light Cinema offers a diverse selection of films, including second-run commercial films, premiere films, classic movies, foreign films, and first-run art films, catering to different audience preferences.
Lower Pricing: The transition to a membership-based pricing strategy offers lower admission fees compared to competitors, making it more affordable for patrons to attend screenings.
Community Engagement: Lime Light Cinema engages with the local community by distributing program schedules through record stores and donut shops, fostering a sense of connection and accessibility.
Candy Bar Operation: The cinema's candy bar operation generates a high contribution margin and has potential for further profitability through strategic pricing and product adjustments.
Weaknesses:
Previous Image: Despite rebranding efforts, Lime Light Cinema still faces challenges associated with its previous identity as a pornographic film house, leading to negative perceptions among potential patrons.
Limited Promotion Channels: Reliance on traditional advertising channels such as newspapers and limited digital presence (e.g., Facebook) may restrict Lime Light Cinema's ability to reach and engage younger audiences.
Competition from Home Entertainment: Increasing popularity of home entertainment options such as DVDs, online streaming platforms like Netflix, and emerging technologies pose a threat to cinema attendance, particularly for second-run commercial films.
Revenue and Profitability: Lime Light Cinema's current revenue and profitability levels may not be sufficient to sustain operations and meet the company's financial objectives, especially with the need to increase local profitability by at least 25%.
Opportunities:
Digital Marketing Expansion: Leveraging digital marketing channels including social media platforms (e.g., Instagram, Twitter, TikTok), email marketing, and a dedicated website can enhance Lime Light Cinema's online presence and attract a wider audience.
Partnerships and Collaborations: Establishing partnerships with local businesses, cultural organizations, and educational institutions can expand Lime Light Cinema's reach and enhance its reputation as a cultural destination.
Community Events and Special Screenings: Hosting community events, themed screenings, and film festivals can create unique experiences, drive attendance, and differentiate Lime Light Cinema from competitors.
Membership Benefits Enhancement: Offering additional benefits and exclusive perks to members, such as priority seating, special discounts, and exclusive events, can incentivize membership enrollment and foster loyalty among patrons.
Threats:
Competitive Landscape: Lime Light Cinema faces competition from established commercial theaters and the other repertory theater in Victoria, as well as alternative entertainment options like home streaming services and digital platforms.
Changing Consumer Preferences: Shifts in consumer behavior and preferences, including the rise of streaming services and digital entertainment platforms, may reduce demand for traditional cinema experiences.
Economic Factors: Economic downturns, changes in disposable income levels, and fluctuations in consumer spending patterns can impact cinema attendance and affect Lime Light Cinema's revenue streams.
Technological Advances: Ongoing technological advancements in home entertainment systems,
portable devices, and streaming technologies pose a long-term threat to the traditional cinema industry, potentially diminishing the appeal of theatrical screenings.
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