Cineplex Entertainment: The Loyalty Program

Analysis by-

Akash PATIL

Bhumit KOTHARI

Case Blazer II

Contents

Case Synopsis

Problem Definition

Case Inferences

Case Recommendations

Conclusion

Synopsis of a Case

Founded: 1979

2003: Merged with Galaxy Entertainment Inc.

2005: Acquired Famous players

Brands: Cineplex Odeon, Galaxy, Famous

Players and Cinema City

“an exceptional entertainment experience”

Synopsis of a Case

65% Market share- Privacy, rental movies, etc.

Developing new markets: Live markets, wrestling matches, hockey games, etc.

Optimum Segmentation

Customer Relationship Management (CRM)

Profitable Segments: Teenagers, young adults, etc.

Segmentation

Segmentation

TeenagersYoung Adults

Young working

Young families

Older families

Retirees

Contents

Case Synopsis

Problem Definition

Case Inferences

Case Recommendations

Conclusion

Problems in a Case Increase and stabilize Cineplex’s inconsistent

revenues.

Could loyalty program be implemented ?

If recommended going ahead with program, which loyalty partner should be used?

How would the reward be structured and promoted?

What would be the promotional campaign entail, and how should the launch take place?

Sub Problems

Customer spending & frequency

Program to launch regionally or nationally?

Choose loyalty partner

Marketing communications

Contents

Case Synopsis

Problem Definition

Case Inferences

Case Recommendations

Conclusion

Case Inferences

Current Market share: 64%

95% respondents interested- Rewards program

56% respondents- 10% discount

Net income has been affected by Interest on long term debt, Interest on loan, loss on debt

Operation costs in 2005 increased as compared to 2003 and 2004

2005 2004 2003

Total Revenue 490299 315786 295540

Cost of operation 421529 248818 242636

Gross income 68770 66968 52904

Amortization 42948 - -

Loss on debt 4156 - -

Impairment assets 4296 - -

Loss (gain) on disposal assets 122 (111) (92)

Interest on long-term debt 18401 8280 4020

Interest on loan 14000 14000 1381

Interest income (378) (473) (922)

Foreign exchange gain - - (3696)

Income taxes (1463) (1149) 366

Income from discontinued operations

28116 6357 6184

Non-controlling interest 1828 - 304

Net Income 12976 30248 39323

14% 21% 18%

1…

2…

17.90%

Gross Income%

2005 2004 2003

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Net Income

Chart Title

2005 2004 2003

2005 income has been fall by 57%

2004 income has been fall by 23%

Contents

Case Synopsis

Problem Definition

Case Inferences

Case Recommendations

Conclusion

Case Recommendations

Launch Program: Regionally

Loyalty Partner: Internal development

Preliminary Reward structure: Option 3

Marketing Communication campaign: Social Media, Radio

Database vendor: Alpha

Contents

Case Synopsis

Problem Definition

Case Inferences

Case Recommendations

Conclusion

Conclusion

Loyalty program

Retain existing customers

Acquire new customers

Build relationships

Create brand advocates

Thank you!