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• Vidisha Mohapatra

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CRM CASE ANALYSIS: CINEPLEX ENTERTAINMENT: THE PROGRAM Click toLOYALTY edit Master subtitle style VIDISHA MOHAPATRA PGP/15/123 Customer relationship management

2/3/13

DECISIONS TO BE TAKEN •

Recommendations for Loyalty Program Development –

Reward structure

–

Tie-in partner

–

•

Flight Miles

•

Scotia bank

Type of promotional campaign

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•

In-theater advertising

•

Newspaper/Radio advertising

TRIGGERS •

Inconsistent revenue yield per year –

•

Weak box office attendance(2005) –

•

Variable attendance dependant on movie genre Sharp drop in Net operating Income

How to link individual customers to targeted movies and concession purchases? No reliable database yet of customer 2/3/13preferences –

CINEPLEX CORPORATE STRATEGY AND RESULTS •

Chain of movie theaters –

Mergers and acquisitions •

•

Galaxy Entertainment Inc,Famous players(2005)

Conglomeration of various brands –

Cineplex Odeon

–

Galaxy

–

Famous Players

2/3/13Cinema –

City

STRATEGY FOR THE REWARD PROGRAM •

Regarding the loyalty program –

Data control and ownership

–

Resource requirements •

–

Cost and labor

Length if time to establish the database •

Min 500000 members

–

Robust execution

–

Firm’s image

– Value 2/3/13

to customer

1.EVALUATION OF POTENTIAL PARTNER

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DEVELOPMENT

st incurred

$5.5mn and diminishing thereafter

$15 mn + $0.9 /transaction+ Near about $6.51 mn data access cost

netration Rate 16.56% (5.3 mn unique visitors) 21.87%(7 mn database)

21.25%(6.8 mn custom served)

ta Ownership

Complete

None

None

vantages

1.Unlimited data access and control 2.Would know one’s brand the best

1.Immediate entrance to data 1.Leverage on earlier of 7 mn people and other corporate sponsorships Flight Miles partners 2.One of the ‘Big 5’ ban 2.Offer of $250000 by Flight in Canada Miles towards marketing 3.Ready to share campaign Cineplex’s financial risk 3.Easy reach to large number proposed to share 50-5 of Canadians – already cost widespread awareness 4.Prior experience with built(exhibit 3) data management 4.No need to carry multiple companies cards 5.No requirement to op bank accounts but each debit/credit card holder issued Cineplex loyalty card.

advantages

1.Face financial risk of 1.Lenghthy commitment of 3 unredeemed points yrs 2.Difficult to divest the program 2.No easy exit option 3.New department and database 3.Would lose all access to required accumulated data on exiting 2/3/13 4.Lenghthy time of development 4.Extra cost incurred in

1.Naming rights on 3 m theaters 2.Exlusitivity agreemen on bank machines in all theaters 3.Customers wouldn’t li

RECOMMENDATION: •

Opt for partnership with Scotia bank

•

Advantages: –

–

–

•

Cheapest and easiest way for Cineplex to grow its customer base – benefit from dual strategy Financial and data management risks would be shared No barriers for contractual exits

Modifications: 2/3/13 – Execute

a single card/cardless strategy

2.EVALUATION OF POINTS SCHEME OPTION 1

OPTION 2

OPTION 3

OPTION 4

Membership fee

None– incentive 1 time Annual fee of $5 – None– incentive enough for membership fee of customers might enough for customers to join just $2 – very low be deterred from customers to join but still joining questionable

Concession discounts

None – no incentive for customers

Sign up points

500 – too many 100 – too low None – customers points;1 free child points; might not not tempted to admission be attractive join enough

250 – adequate points to tempt customers to join; no incentive yet but motivation exists

Value sum of benefits on reaching highest point level

$51.77 – too high a value for benefits; costly to support for company

$62.22 – good enough benefits for customers and none too costly for company

Value per point /Will it be too costly for the 2/3/13 company?

$28.97 – lowest $36.56 – highest but not justified at but justification no membership questionable fee

10% – customers 15% - too high 10% – customers tempted to join discount ;costly for tempted to join the company

$68.37 – moderate No benefits – no value at 2500 incentive for points but still customer to join prove to be costly

0 – no cost at all but no customer gained at all

$32.14 – moderate cost for the company

RECOMMENDATION: Choose option 4 as the suitable reward structure

•

Moderate cost for the company

•

Attractive enough for customers –

–

–

No upfront membership fee Adequate sign up points(250) – no incentive yet but motivates customers to earn more points Permanent discount for concessions •

•

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Enhance share-of-wallet for Cineplex (reference link)

But at higher level of points (2500-

3.SELECTING THE MARKETING COMMUNICATION CAMPAIGN OBJECTIVE: Reach 500000 customers per year for 1st 3 years with a budget constraint of $300000 By partnering with Scotiabank,increase the customer reach while decreasing cost with dual strategy. NEWSPAPERS

RADIO

ONLINE ADS

GRASS ROOT INITIATIVES

National newspapers don’t have reach to every targeted segment. Regional newspapers do have reach but they are very costly to insert In and develop ads.

Significant overage in key markets. Low advertisement and development costs. Free advertisement space on many radio stations’ websites.

To target the young Engage in WOM publicity audience (16-24) online in a big way for young advertisements audience. Develop more especially on music promotional campaigns websites like mtv.ca and for universities and more muchmusic.ca as well as in campus offers for Google could be done. special events. Target young working adults too by corporate sponsorships.

Rather than relying on Helpful in targeting the Low advertisement costs Engage in mobile newspaper ads, look out young segment(16-24) per thousand advertisement and for other media . impressions(25 Canadian couponing target Rather than relying on just traditional advertisement media ,looktoout for dollars) young Smartphone more cost effective and non traditional ,mobile and onlineusers. media that can 2/3/13

enhance reach.

4.WEBSITE VENDOR SELECTION •

Opt for Gamma company. –

–

Ø

Lowest initial investment costs $200000 Vast experience in IT strategy and in developing CRM programs for leading organizations Program proposals

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•

Manage marketing platform and all aspects of e-communications

•

Track members on -going basis through different promotional media

5.NATIONAL OR REGIONAL ROLLOUT •

Opt for a national rollout –

–

Having partnership with one of Canada’s important national bank would help in •

Sharing financial risk

•

Boost cost efficiency

•

Increase program coverage via branches

Accrue revenues faster

2006’s new PoS installation had the technical capability of supporting the 2/3/13national roll out. –

DECISION SNAPSHOT •

Opt for partnership with Scotia bank

•

Opt for option 4 in reward program

•

•

Opt for online, radio and non traditional media to target the youth segment Opt for a national roll out in partnership with Scotia bank. 2/3/13

THANK YOU

2/3/13