Fame Cinema - AMC Theatres v2 0

1

It is in partial fulfillment of the requirements for

Marketing Specialization subject

Services Marketing (3rd Semester)

“Project on –Comparative Study of Services Marketing by

Fame Cinemas, India

And

AMC Theatres, USA”

Prepared By:

Mr Mohammed Sharif (32)

Mr Anand Menon (44)

Mr Prasenjit Chakraborty (23)

2

I. Project Brief

We have studied the Services Marketing Strategy of Fame Cinemas in India and AMC

Theatres in USA, both represents the Film Exhibition Segment of Services Industry.

Our Scope of Study is limited to the Comparative Study of the Services Marketing

Strategy of the companies under study.

II. Executive Summary

1. Executive Summary In India, from single screens, to multiplexes and to the recent emerging trend of megaplexes,

the Indian film exhibition segment, which forms the largest component of the country’s filmed

entertainment industry in India, has undergone a sea change. In 2011-12, domestic

theatrical film exhibition revenues were estimated to be INR78 billion, contributing 79 per

cent of the total revenues of the Indian filmed entertainment industry.

In USA, An astonishing 1.45 billion tickets were sold in 2011-12. But beyond the headlines,

the industry is in contradictions: the number of theaters is declining, but the number of

screens is at an all-time high, revenues are up, but attendance is largely flat.

2. Situation Analysis: Market Summary

Market Growth

In 2015, it is estimated that theatrical revenues in India will increase to INR101 billion, driven

by the growth of multiplexes across the country and the implementation of digital technology

in cinemas, which is expected to facilitate wider release of films and reduce piracy.

In USA, the market will remain flat and difficult to predict in strong double dip recession as

Entertainment being non-essential gets striked off by families as the first step to reduce

monthly budget.

3

Market Trends

In India , they Key Trends are :

a) Rise in Multiplexes: In 2011-12, there were 1,075 multiplex screens in the

country. These comprised around 8 per cent of the total screens in the country,

but accounted for 40 per cent of total ticket collections. By 2015, the number of

multiplex screens is estimated to rise to 1,925, growing at a CAGR of 12 per cent

between 2011 and 2015.

b) Increasing Adoption of Digital Technology: As of March 2010, it is estimated

that there were 2,000 digital screens in India, a figure that is projected to rise to

2,500–3,000 over the next three to four years. Digital prints cost 80 per cent less

than conventional film prints, and enable producers to reach five times the

number of screens at the same cost. This has significantly improved realizations,

since 60 per cent of box-office collections are now earned within the first week of

a movie’s release. Digital cinema allows companies to exactly control at which

locations and how many times movies will be shown. It also expands the reach

of releases, from large cities to remote towns and villages across India.

c) Expansion into Lifestyle Entertainment : Multiplex owners are diversifying into

lifestyle entertainment, leisure and casual dining to house several entertainment

formats under a single roof to increase their revenues.

In USA, they Key Trends are:

a) Consolidation of Theatre halls: Due to Flat market in USA, foreign players with

deep pockets are buying out the established players like AMC theatres by Chinese

Dalian Wanda Group , or Phoenix Theatres by Reliance Entertainment.

b) Increasing Adoption of Digital Technology: Use of 3D and Imax technology to

attract viewers to watch the Movies for different experience which, conveniently

enough, also give theater owners a justification for charging more for tickets

4

Market Needs

In India the Market needs are in form of Infrastructure as there in no dearth of demand :

Increasing the Number of Screens

Improving the movie viewing experience

In USA the market needs are different experience and there is no dearth of Infrastructure:

Attract Viewers from other modes of entertainment by offering more 3 D or IMAX

format.

Market Demographics

In India, The Indian population will increase 20 percent in 2025, an increase of 220 million

people. But the number of 12-24 year olds is expected to increase by 30 percent, hence 66

million more potential viewers. Based on current theaters and screens, this is an increase of

roughly 3500 per screen. ( Basis No addition of Single Screen theatres presently at 13438

and CAGR addition of Multiplex Screens at 12% and ending up at the end of 2025 at 5978

screens.)

In USA, The U.S. population will increase 17 percent in 2025, an increase of 54 million

people. But the number of 12-24 year olds is expected to increase only 9 percent, just 4

million more potential viewers. Based on current theaters and screens, this is an increase of

roughly 100 per screen.

SWOT Analysis of Fame Cinemas, India

Strengths Weaknesses

� Brand Equity “FAME” � Scale

� Experienced Management Team � Regulatory approvals

� Professional board

� Distribution Arm (Shringar)

� Robust Processes

Opportunities Threats

� Multiplexes: At nascent stage � Over-building

� Favorable India demographic � Lack of quality content

� Retail boom: Change in the life-style & spending patterns

� Piracy

� Growing middle class with higher disposable income

5

SWOT Analysis of AMC Theatres, USA Strengths Weaknesses * Diversified media and entertainment business

* Loss Posted in last 2 years

* Consistent revenue * Ageing Property

* Strong library content

Opportunities Threats

* Alternative media outlets (i.e., online) * Increasing use of Digital Video Recorders (DVRs)

* Newspaper and broadcasting market growth

* Growth of online video, alternative media

* HDTV growth * Economic slowdown in the US

* Multi-year sports agreements * Regulatory risks

* Free to air Mobile DTV with 'up sell' opportunities

Product Offering Fame Cinemas offering to Indian population

27 theatres with 102 screens

Hospitality Services in theatres

AMC Theatres offering to American Population

346 theatres with 5034 screens

Hospitality Services in Theatre

More than 46% of screens have 3D & more than 2% have IMAX

3. Marketing Strategy Mission of Fame Cinemas, India

The mission is to provide World Class viewing experience to it’s patrons.

Mission of AMC Theatres, USA

The mission is to provide Amazing experience to it’s patrons.

6

Target Market

In India: Fame Cinemas target the Metros and Tier II Cities as of now but in long term

will consider Tier III Cities also as India is now a growth market. The reason for

targeting Metros and Tier II cities is to target families with disposable income and

aspiration to enjoy the services offered by Fame Cinemas.

In USA, AMC Theatres is available in almost all states of USA, being a mature/

declining market, AMC Theatre now targets 12-24 years and 55+ yrs which comprises

of 40% of the market.

Positioning

Fame Cinema positioning strategy in India is to position itself as a Film

Exhibitor for the aspiring Indian population. Although their product is

similar to other competitors like Cinemax, Big Cinemas etc, but vastly

different from Single screen theatres , their unique proposition is the

location of Fame Cinemas, which are always in the most prime property

of the location it operates from.

AMC Theatres positioning strategy is similar to other players in US

market, but the unique positioning is to develop a loyal clientele through

earlier Movie watcher program and now through AMC Stubs program, i.e

Loyalty Reward program which no US exhibitors are offering as of now.

Point Of Difference

Fame Cinemas in Indian Market wrt Single Screen Theatres

AMC Theatres in US Market wrt other exhibitors

Seating Arrangement 18 inch riser and stadia type

18 inch riser and stadia type

Sound Dolby Digital Sony Digital

Projector Screens Digital Digital

Seating type Bucket Seat Loveseat Type

Advance Booking Available Available

Reward Programs Buy 1 Get 1 AMC Stubs

7

Marketing Strategies

Marketing Mix

Product

Features Fame Cinemas AMC Theatres

Core Product

Movie Exhibition Provides Provides

Actual Product

Sound System Dolby Digital Sony Dynamic Digital

Seating type Bucket type Loveseat type

Comfortable Seating Provides Provides

Centralized AC Provides Provides

Augmented Product

Food Court Provides Provides

Convenient Ticket Booking Provides Provides

Car Parking Provides Provides

Loyalty Reward Program Doesn’t provide Provides

Based on the above study, It can be inferred that Fame Cinemas and AMC Theatres

have not much difference in the Product offered to the Consumers.

Pricing:


Pricing Strategy

Age Based Doesn't Follow Follows

Show timing Based Follows Follows

Seating Position Based Follows Doesn't Follow

Group Discount offer Doesn’t Follow Follows

8

Actual Price in INR **

Fame Cinemas

Silver Premier Executive

Matinee Show 270 250 200

Evening Show 320 300 250

Night Show 320 300 250

AMC Theatres

Senior Adult Child

Matinee Show 476 476 420

Evening Show 532 588 420

Night Show 532 588 420

** : Actual Price of "The Dark Night Rises" on 22nd Jul at FAME Malad, Mumbai and AMC Montebello, Los Angeles. Assuming 1$= Rs 56

Based on the above study, It can be inferred that Fame Cinemas follow Seating

Position and Show timing Based Pricing Strategy, whereas AMC Theatres follows

Age and Show timing based Pricing Strategy. It also shows the pricing approach for

Fame Cinemas is Value Based Pricing, whereas for AMC Theatres , being in mature

market has to follow Competition based pricing and hence even there is huge

difference between purchasing parity between India and USA , the Average movie

ticket prices in AMC Theatres is only 1.8 times of Fame Cinemas ticket price.

Place


Available in No. of States 7 in India 32 in USA

No. of theatres 27 346

Screens 102 5034

Based on the above study, It can be inferred that Fame Cinemas has long way to go

to capitalize its position in a growth market, whereas AMC Theatre is firmly positioned

in a Mature and highly competitive market with market share of 19%.

9

Promotion:


Promotional Strategies

Daily Advt, in Local Newspaper Follows Follows

Online Marketing Follows Follows

Ticket Booking through 3rd Party Service providers Follows Follows

Loyalty Card system Doesn't Provides Provides

Buy 1 Get 1 Free Schemes for Selected Clientele of Credit Card, but with riders. Provides Doesn't Provides

Baby Matinee Shows to attract families with small kids Doesn't Provides Provides

Based on the above study, It can be inferred that Fame Cinemas operating in a high

growth market can benefit well with Word of Mouth Publicity and spends minimal on

Promotional schemes to attract Customers, whereas AMC Theatres in a Mature

market has to come out with Loyalty Card System to maintain it’s clientele. For e.g.

AMC Stubs™ is an all-new program that AMC Theatres offering to their guests as a

way to reward them for going to AMC theatres. The benefits are:

$10 reward for every $100 spend

Free upgrades on concessions anytime

Online ticket purchase fees waived

Access to online ticket stub collection

People:


People Strategies

Nos Of Employee 1650 18500

Employee Attire Uniform Uniform

Employee Behavior Courteous Courteous

Attitude towards patrons Pleasant Pleasant

Training and Development Well Trained Well Trained

10

Fame Cinema Recruitment and Training Process : Fame Cinema recruits both

through Online Advt of open positions and through Recruitment consultants. HR

function is still managed centrally from their Mumbai Headquarter and HR

representative in each location coordinate with Theatre Manager to arrange interview

with right Candidates. Post recruitment they arrange On the Job training programs for

quick integration of the New employee to Fame Cinema way of work.

AMC Theatre Recruitment and Training Process: AMC Theatre receives approx.

1.75 Million job applications a year. To ensure consistent hiring practices these

applications are handled online .Local Theatre Managers select promising candidates

based on applications and online assessments (Psychometric tests), then Schedule

Interviews. The Individual interviews follow an AMC Script using “behavioral

assessments” and situational Questions, helping them to assess applicant’s

compatibility with AMC performance standards for all Associates. Once an employee

is selected he/she undergoes weeklong training, including cross training in all aspects

of theatre operations.

Process

The process is a sequence of actions to deliver the service to the customer.

Fame Cinema : In this case the following is the process followed by FAME. The

customer arrives to FAME by car and first goes to the ‘pay n park’ to park the car.

The customer then moves on to the ticket window to purchase the ticket for the movie

he is interested to watch. Then the customer enters the building. Here the usher at the

door checks for the tickets. Then the customer will move on to the screening area and

watch the movie. In the interval the customer will mostly come out to eat or drink

something from the cafeteria. The customer goes back to the screening area to

continue the movie. Watching a movie at Fame Cinemas is like taking a short

vacation. There is a cool ambience, quality service and convenience in booking.

AMC Theatres: The AMC Theatre process is similar to FAME Cinema.

11

Physical Evidence


Ambient factors

Air conditioning Yes Yes

Excellent ventilation Yes Yes

Seating Arrangement Stadia type Loveseat

Design factors

Uniform Color Deep Purple T shirt Deep Black Shirt

Interior Color Scheme Purple Hue Based Red Hue based

Extensive parking lot Yes Yes

Spacious interiors Yes Yes

Social factors

Well dressed employees Yes Yes

Courteous Yes Yes

Elite and up market crowd Yes Mixed

Family atmosphere Yes Yes

Visual Picture

Inside Seating

Food Court

Documents

Fame Cinema - AMC Theatres v2 0