International Marketing - Exporting Event Cinemas to South Africa - Case Study Example

International Marketing – Exporting Event Cinemas to South Africa 6. Business Objectives 6.1 Objectives Marketing Objectives a) Increase genral audience by 40% b) Gain more recognition among colleges and universities by touring at least one university or college per month Financial Objectives i. Meeting fiscal year 1 financial obligations ii. Increase corporate and individual contribution by 10% iii. Increase funding by 35% Personnel Objectives i. Have qualitifed team cabpable of providing high quality customer service to customers and compensate them fairly. 7. Marketing Plan 7.1 The target market segment The target market segment for Event Cinemas is as follows: i. By genre- comedy, adventure, action, thriller, drama, romantic comedy and musical. ii. By Age- Between 5 years and 54 years iii. By Rating – U, PG, 12,15 and 18 7.2 Final Product specifications (define and explain any product adaptation factors required for the export market) The main products/services is movie watching complimented with refreshment concession.Movies are by genre and rating. Movies By Genre a. Comedy- Humurous movies b. Adventure-Movies showing new experiences through explorations, struggles and situations, conquests, travels and creation of empires. c. Action- Movies that have continuous high energy, chase scenes, battles, rescues, mountains, martial arts, and races. d. Thriller- Movies that have elements of tension, excitement and suspense. e. Romantic- Love-themed movies f. Musical- Movies showcase song and dance routines Movies by Rating i. PG- This stands for Parental Guidance and means the movie is suitable for genral viewing, though some scenes are not suited for young children. A child over 8 years can watch but parents should decide whether their children should watch or not. ii. U- This means Universal and anyone of age four years and above can watch. iii. 12- This means the movie is not suitable for hcilren under 12 years unless accompanied by adult, and the adult should consider if the fil is suitable for the child. iv. 15- This means the movies are unsuitable for children under 15 years. v. 18- This means the movies are unsuitable for children under 18 years Refreshment Concession a. International chocolates and candies b. Frozen Sorbetto in coconuts, lemons, limes and oranges c. Cimematheque soda made from natural Italian spritzer, juices and syrups d. Cinematheque fresh popcorn Production adaptation South Africa Government is supporting its local movies and most South Africans love to watch them. Event Cinemas will need to add to its list of movies South African movies in order to attract more custoemrs. Other preferred movies are Bollywood (Indian movies) and Nollywood(Nigeria movies) that Event Cinemas will need to incorporate in their product/service offering. i. Cinemplex and facilities ii. 6 theatres per cinexplex iii. 20 metre digital screens iv. Comfortable sits (Airport lounge like) 7.3 Pricing Structures and Strategy Analysis Event cinemas will have two-tier pricing structure. Blockbusters movies will be charged at at least $15 while the rest of the movies will be charged at least $8. Pricing methods i. Located assigned seats- Those who are allocated assigned seats (have chosen preferred seats) will pay $3 more. ii. Close to the showtime the tickets are bought- Those buying earlier before the show time will pay less by $3 while those who pay close to the show time will pay the standard price. iii. How demand for tickets are- If demands for tickets are low, the price will go down by at least $2 and if the demand will be very high the price for ticket will be higher by at least $3. Prices for all movies will essentially start at the same baseline at $8 to $15. But these prices will fluctuate as the shift between supply and demand takes place before and during the release of the movie. Variable pricing is recommended as it will offer customers will an incentive to purchase tickets early, just the same way best flight deals are sought by frequent travelers. Fresquent movie-goers will be rewrded this way. Below is the price schedule for Event Cinema PRICING SCHEDULE FOR EVENT CINEMA When? Price?   Children $4.00 Evenings and weekends (after 6pm).* Adults $8.00 Students/VIP $6.00         Public Holidays     Adults $8.00 Students    $6.00 Children $4.00 Tuesdays! (all day and night) Adults $6.00 Students $5.00 Children                        $4.00 Weekday specials (before 6pm). Adults $6.00 Students $5.00 Children $4.00 Sunday evenings (after 4pm) Adults $7.00 Students    $5.00 Children $4.00 Adults $60.00 VMAX and Gold Glass      Adults $12.00     Children $NA 3D Movies Adults $11.50   Students       $8.50 If you bring your own 3D glasses the movie tickets will decrease by $1.50 Children $7.00 7.4 Restate distribution model chosen (2.4.2)and discuss key logistic issues and management. The distribution model for Event Cinems will be bricks and clicks. It will conduct its business both online an at physical locations (cineplexes in malls). Custoemrs will visit the company’s website for a variety of movies and showing dates and times. They will be able to chosoe the type of preferred movie, he day of the movie and the time, the city and the cinexplex. They will also be able to book for sits they want and pay online. They will then go physically to the cinemaplexes to watch the movie. Customers who prefer to buy tickets physically can do so at the cineplexes At the cineplexes customers who bought tickets online will give their tickets numbers to the theatre staff for confirmation of time, type of movie, type of cineplexes, and day of movie. Those who will choose to buy tickets at the cinexplexes will do so and both will be directd by the theatre waiters to their sits. 7.5 Promotion strategy and plan. What big ideas / communication concepts ? i. Website, blog and social media – Event Cinemas will develop a website for product/service marketing. Social media such as Facebook, Twitter, and Pinterest to build a following and introduce online the buying of tickets and booking of sits. The blog will be used to provide reviews of upcoming movies and create interest in potential customers. ii. Advertising- Intense advertising will be done in local newspapers, national radio and Television in the first year to introduce Event Cinemas to the market and create awareness of its products. Thereafter, it will be done twice in a quarter to remind customers of its products and services and create awareness of special discounts. Advertising will also be done before a special feature or movie begins. Hotels and malls televisions will also be used for advertisement. iii. Sales promotion- Coupons, contests, door knockers and introduction of customer loyalty rewards will be incorporated to boost sales. Seasonal promotions such as “friends for friends” , “buy four tickets get one free” will also be incorporated. iv. Grand opening- This will be done in the early Year1 to create awareness about Event Cinemas and its products and services. 7.6 Final positioning plan, brand and management Event Cinemas will position itself as a provider of ultimate movie experience, in a state-of the art environment and in a caring manner. Its brand tag will be “Everyone deserves to access a good movie”. All marketing materials will have Event Cinema logo such as fliers, T-shirsts, capes, and popcon containers among others. There are various issues of brand and management that may affect Event Cinemas brand. As a new brand in the market there is stiff competition that may affect the brand. The way people thnk about brands is influenced by change in technology and lifestyle. Consumers today expect modern, stylish and trendy brand images like logos that match the current trends rther than the perceived old fashioned ones. This forces the company to keep modifying the logo to suit the current trends and reach out to the potential custoemers and continue staying in the custoemer’s mind. People are also overloaded with information from different brands and critizice the behaviour of brands. 8. Financial Evaluation of 3 Year Plan P/L (Excel Spreadsheet) 8.1 3 year P/L   Year 1 (in dollars) Year 2 (in dollars) Year 3 (in dollars) Total Revenue 700,000 720,000 780,000 Expenses       Start-up costs 300,000 0 0 Advertising 32,000 20,400 13,900 Wages/Salaries 110,000 120,000 135,000 Debt Financing 0 150,000 150,000 Maintenance and Repair 120,400 60,000 42,000 Telephone and Internet 9,000 10,000 9,500 Business Licence 100 100 100 Insurance 9,000 90,000 90,000 Audit/Book keeper 9,500 9,500 9,500 Rent 120,000 120,000 120,000 Utilities 20,000 20,000 20,000         Total Expenses 730,000 600,000 590,000 Year Net Profit/Loss -30,000 120,000 190,000 8.1 Specify the assumptions made in creating this P/L. i. Current interest for both year 1, 2 & 3 is the rate of 4% ii. Long-term interest rate is at the rate of 8% iii. Tax rate is at the rate of 30% 8.2 Explain how you calculated 1st year sales The sales of the 1st year were calculated by totaling up the prices of tickets sold, food and beverages. The sales were the total sales for four cities ; Johannesburg, Cape Town, Durban, and Pretoria. 8.3 Explain the basis of and the reasons for your calculations to change the revenue in Y1 to Y2 and then to Y3. a) The price of tickets varied throughout the years depending with the kind of movie, type of cinemplex (Gold Class or VMAX), special promotion, special feature, day of the week, time of day and the age of the customer. b) Customers increased by 20% in Y2 and 30% in Y3 increasing thus sales of tickets and food increased. c) The price of tickets will be increased by 15% in Y2 and 20% in Y3 8.4 Explain the basis of and the reasons for your calculation to change any of the expense figures from Y1 to Y2 and then to Y3 i. The start-up costs were included in year I and include purchase of office furniture, grand opening, purchase of office equipment, special permits, signage, suppliers, and advertising among others. ii. As a new business Event Cinema will not pay taxes in the first year but will be paid in the second and third year. iii. Debt financing did not start in Year 1 but proceeded from Y2 and Y3 8.5 Resultant P/L Due to large start-up costs the company will have a projected deficit of approximately $30000 in Y1. If the expense and revenue targets are met in Y1 and Y2, then the projected surplus in Y2 will be $120,000 and Y3 190,000 Read More