1. How might the reward program described in case exhibit 5 affect the movie and event –going behavior of major market segments? At retail, what is the average value of each reward structure for customer’s dollars spent – 5 %, 10%, 15% or 20%? Which reward structure would you choose? Why? (For the sake of simplicity, ignore the one-time fees and rewards)? The reward programs as depicted in exhibit 5 are evaluated as below in terms of retail value they offer to customers of Cineplex entertainment. The obvious intention of the reward program is to enhance customer loyalty by rewarding them for their repeated, frequent patronage. Therefore, we will consider the discount percentage for 10 adult movie purchases and 10 concession combo …show more content…
As evident, option 2 offers maximum value for customer. I will also choose option 2 for reward structure due to below reasons: ✓ There is a nominal onetime membership fee of USD 2 which is immediately reimbursed to the customer on first enrollment and first movie purchase- both equivalents to USD 1.1 each. ✓ Additionally, this ensures that only serious customers enroll in database, thereby adding to relevancy to CRM database ✓ The membership fee keeps the member motivated to engage in repeat purchases until the first reward at least. This provides with sufficient time to understand customer behavior and design offerings which can help build a relationship. 2. What is the likely increase in Cineplex Entertainment’s revenue from your proposed program – 0%, 5%, 10%, 15% or 20%? What are the varying financial consequences for Cineplex Entertainment? Would you proceed with a reward program? By rolling out the reward program, Cineplex is going to incur additional fixed as well as variable costs as well. Fixed Cost Burden: ✓ Cost of setting up CRM
The first new service is aimed at rewarding loyal customers by offering them a selection of memberships that would make their regular movie going experiences more pleasurable and inviting. The membership would consist of four tiers consisting of silver, gold, platinum, and diamond. The benefits inferred upon membership into the various tiers will include:
2. What forces are driving changes in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
Revised: August 28, 2002 In April 2001, Matt Heyman, co-founder of Cinemex, the largest chain of movie theaters in Mexico City, looked out the window of his office and pondered the future of his company. In just seven years, Heyman and his partners had nurtured Cinemex from a student idea into the largest theater chain in Mexico City, but they faced new challenges every day. Many of these challenges came from competitors. For years competitors ran old, poorly-maintained theaters, but in recent months they had begun to imitate Cinemex’s top-of-the-line exhibition venues. Their latest tactic: offering two tickets for the price of one on Wednesdays. Heyman wondered whether Cinemex should
1. When it is difficult to determine the effect of a salesperson’s effort son sales rather than pay any incentive through commission it is better to use a bonus with salary as part of the compensation package
The Canadian entertainment industry that is served by Cineplex has been recording sustained growth since 2011 where a growth of 5 percent was recorded. PwC’s Global Entertainment and Media Outlook for 2014-2018 (PWC, 2014) indicate that the industry is set for a take-off. The industry has a
I believe that matching the 2 for 1 deal, was not in the best interest of Cinemex. While it did help boost attendance, Heyman is cutting the prices of the tickets drastically since implementing which in turn cuts down his revenue. Even after his competitors initiated the sale, Weeks 27 – Week 34, Cinemex showed a steady increase in attendance before even implementing the 2 for 1 deal. There are so many outside factors that can help determine the attendance at a movie theater (ex.popularity of films, weather, location, time of year). With the special, more consumers will attend the movies on a Wednesday when they are receiving the deal, which slows down your revenue for the remainder of the week. While Cinemex is
This type of rewards system is getting more and more common because retailers are trying to gain customer loyalty by offering them incentives to come back and shop.
d. Since this is a variable pay and not a permanent increase, it does not ensure a long term
Competition between theaters often comes down to distance from home, convenience of parking and proximity of restaurants. Innovations by one theater chain are quickly adopted by others. The differing approaches of the theater chain companies are reflected in their cost of fixed assets per screen.
This paper is provided to create, organize, and manage a total rewards program for an insurance company. First, it indicates the requirement of a total rewards system for the company. Then, it formulates a competitive strategy and explains it. Since the communication of a strategy is as important as the strategy itself, the paper includes a communication plan of the strategy. And last but not least it studies devising a competitive pay structure.
2. What forces are driving changes in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
Costco’s business model is to generate high-volume sales and rapid inventory turnover by offering low prices on a limited set selection of brands and a few selected privately labeled products. This model does not turn a profit on its own with the company operating slightly below its break-even cost. However, to make up for this Costco charges a membership fee and this is a simple way of padding their profit but also enabling them to provide a customer experience that emphasizes value.
Concession sales and ticket sales are the two biggest sources of revenue for a movie theater. Both continue to increase in cost to the consumers and may have reached a price point that is starting
Looking at where the company is in the market place, the cinema exhibition business segment has reached maturity (Reading International, 2013). Reading International will be looking towards improving their current cinemas to achieve more growth as well as developing niche-type of cinemas in selected markets and also procuring additional properties that contain existing cinemas. The objective behind these strategies is to attract more customers. Currently, Reading International targets several key groups of consumers by running various promotions across each country; school children are targeted with the ‘Early Bird’ promotion, students are targeted with ‘Terrific Tuesday’, working professionals with ‘Friday Flicks’, couples with ‘Steer & Beer’ restaurant ‘combo’ deals, families with ‘Spit the Dummy’, elderly with senior discounts, and general movie enthusiasts can sign up for the ‘Reel Club’. It appears that these consumers have been segmented on the basis of demographic grouping. What Reading International needs to be aware of however, is that there is a whole new generation of consumers that will have an effect upon how Reding International’s customers should be grouped over the next couple of years. This generation is known as the Net-Generation (N-Gen), and should
Since RKO Warner is really focused on growth we suggest a shift in risk to the District Manager (DM) level giving them more control over pricing within their respective districts. As RKO grows it will be more and more difficult for Berns to have his eyes on everything. Tying the DM 's directly to the VP of purchasing and VP of operations will give them a clearer picture of how much leeway they have in pricing their videocassettes for sale and rental. This will allow for the DM 's to have sufficient control and knowledge of the financials to implement the objective based portion of the incentive plan. The objective portion of the plan should be discussed with the store mangers before implementation to provide some transparency into the process and reneging fears down. Keep in mind the objective based portion makes up the minority of the incentive plan and will based on total revenue with no distinction between sales and rental revenue.