Cineplex Entertainment: The Loyalty Program

By Group 8

Cineplex Entertainment
Brief History

Market share: 64 per cent Visits: 40 million per year Value proposition: Exceptional entertainment experience via branded concession counters and arcade Strategy revamp (2005): Development of new markets via showcasing of live events
Weak box office attendance in 2005 Adjustment in pricing and products in food and beverage concessions

Decline in operating performance

Cineplex Entertainment
Issues Objective Proposed way out Inconsistent revenues

Increase and stabilize revenues

Loyalty Program Issues: 1. Program Development 2. Reward Structure 3. Type of promotional campaign 4. Launch (Regional/National)
Distinguish valuable customers to target them for specific movies and special events

Why CRM

Share information with suppliers/distri butors

E.g. RPG (Drama)< RPG(Action/Child rens movies)

Motivations and Frequency of Movie Attendance

Disposable income Teenagers Young adults Young working Young families Older families Retirees High Socialization needs High High High High Work obligations

Loyalty Partner Options

Internal Development Complete control over program and data ownership Expenses: $5.5m in 1st year and diminishes 2nd year onwards Risk: Unredeemed points, difficult to divest if unsuccessful Database: Creation of new database may take several years Partial control over program and no control over data ownership Expenses: $5.5m yearly + $0.09 per point issued + Data access charges Financial risk: Commitment period of 3 years (else loss of accumulated data) Database: Existing database of 7 million people Partial control over program and over data ownership Expenses: 1st year $3m, 2nd year $1.7m, 3rd year $1.9m Risk: 50:50 cost sharing Database: Existing banks database

Flight Miles Partnership

Scotia bank Proposal

Marketing Communications Campaign

Facts Objective: Enroll 500,000 customers per year for first three years Rationale: Data bank large enough to derive meaningful customer related information Methodology: Create awareness via marketing campaign Budget: $300,000
In-Theatre
5.3m unique visitors 7.5 visits per guest Zero costs Promotion on concession products, POP displays, backlit posters, website Promotion to captive audience

Regional Newspaper
Half page adds More effective than national papers Costs: $1200 /$3600 (based on market size) +$850 (development costs)

Radio
Significant coverage across key markets Costs: $160 /$225 for 30 second comm. (based on market size) +$1100 (development costs)

Online
Promotion on campuses Corporate Sponsorships

Plan
Partner with Scotiabank New movies are released each Friday. Newspapers are key in providing reviews and movie listings. Newspaper ads to be placed every Friday for a number of weeks to target the moviegoing public. Further reinforcement via outdoor ads near movie theatres and posters within theatres.

Thanks