Business Overview
Salvatore Cinema a movie theatre with four screens and a capacity of 200 is located in Indah Permai, Sepanggar. Sepanggar is located around main campus of University Malaysia Sabah, University Technology Mara Sabah, Polytechnic Kota Kinabalu and Kota Kinabalu Industrial Park (KKIP). As Sepanggar currently experiencing a leap in development due to the expansion of Kota Kinabalu, we decided to be the first company that serves the customer the best movie theatre in town.
Therefore, Salvatore Cinema will offer the best and latest movie with an affordable price and comfortable seats that can make our customer feel pleasure to spend their leisure time with us. Besides, our customer will enjoy our delicious caramel popcorn and others titbits while watching the movies. The Malaysian cinema industry still seems to be in a good state, with cinema admissions having more than doubled than last 4 years. The ticket prices are gradually increased from an average of about RM8. 00 per ticket in 2008 to about RM10. 00 in 2012.
Even though the price of the ticket is increasing, people are tending to buy the ticket. Local cinema chains such as Golden Screen Cinemas continue to invest in new cinemas which bring an increase of more than 50% compared to 2008. 1 Company’s Marketing Environment The marketing environment consists of a microenvironment and a microenvironment. Microenvironment is the actors close to the company that affect its ability to serve its customers. There are several things that include in microenvironment:
The Company
The company aspect of microenvironment refers to the internal environment of the company. This includes all departments, such as management, finance, research and development, purchasing, operations and accounting. Each of these departments has an impact on marketing decisions. For example, research and development have input as to the features a product can perform and accounting approves the financial side of marketing plans and budgets.
Suppliers
The suppliers of a company are also an important aspect of the microenvironment because even the slightest delay in receiving supplies can result in customer dissatisfaction. Marketing managers must watch supply availability and other trends dealing with suppliers to ensure that product will be delivered to customers in the time frame required in order to maintain a strong customer relationship. For our company we choose the best company that supply the cinema equipment.
Marketing Intermediaries
Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies, and financial intermediaries. These are the people that help the company promote, sell, and distribute its products to final buyers. Resellers are those that hold and sell the company’s product.
Public
Public is any group that has an interest in or impact on the organization’s ability to meet its goals. For example, financial publics can hinder a company’s ability to obtain funds affecting the level of credit a company has. Media publics include newspapers and magazines that can publish articles of interest regarding the company and editorials that may influence customers’ opinions. Government publics can affect the company by passing legislation and laws that put restrictions on the company’s actions.
Local publics are neighbourhood and community organizations and will also question a company’s impact on the local area and the level of responsibility of their actions. The general public can greatly affect the company as any change in their attitude, whether positive or negative, can cause sales to go up or down because the general public is often the company’s customer. Macroenvironment is the larger forces that affect the microenvironment. Macroeconomic consists of
Economic Environment
Economic environment refers to the purchasing power of potential customers and the ways in which people spend their money. If the economy in our country is not stable it will reduce the purchasing power and spending of the consumer. The profit of the company will also reduce due to the economy problem.
Technological Environment
The technological environment is perhaps one of the fastest changing factors in the macroenvironment. As these markets develop it can create new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology as it becomes outdated. They must stay informed of trends so they can be part of the next big thing, rather than becoming outdated and suffering the consequences financially.
Political Environment
The political environment includes all laws, government agencies, and groups that influence or limit other organizations and individuals within a society. It is important for marketers to be aware of these restrictions as they can be complex. Some products are regulated by both state and federal laws. There are even restrictions for some products as to whom the target market may be, for example is genre of the movies. If the movie is not suitable for children so company must follow the rules by allowed the customer above 18 years to watch the movie.
Cultural Environment
Cultural environment consists of institutions and basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which passed on from generation to generation and very difficult to change, and secondary beliefs, which tend to be easier to influence. As a marketer, it is important to know the difference between the two and to focus your marketing campaign to reflect the values of a target audience.
SWOT Analysis
It evaluates the company’s overall strengths (S), weaknesses (W), opportunities (O), and threats (T)
Strength
Include internal capabilities resources, and positive situational factors that may help the company serve its customers and achieve its objectives. SVC Cinema’s strengths are :
- Have updated technology
- Plays Malay, English, Hindi, Cantonese, Mandarin and foreign movies
- Strategic location
- Ambience
- Bland of retail and entertainment
Weakness
Include internal limitations and negative situational factors that may interfere with the company’s performance. Below are SVC Cinema’s weaknesses :
- High cost perceptions
- Maintain relationship with customers
- Lack of parking spaces
- Crowded spaces
Opportunities
Favorable factors or trends in the external environment that the company may be able to exploit to its advantage. Some of SVC Cinema’s opportunities :
- Loyal customers
- Deliver more high quality films with affordable price (4D films)
- Premium positioning in the industry
- Market leader 5 Unfavorable external factors or trends that may present challenges to performance.
Below are SVC’s threats :
- Competition increase
- Entertainment tax
- Government’s interference
- Piracy DVDs/Blue Rays 6
Threat of Competitors SVC
Cinema faces many competitors from other companies in Kota Kinabalu, Sabah.
Some of the competitors have greater financial resources than SVC Cinema. Therefore, they may be better in positioning themselves in market than SVC Cinema or to sustain losses from development in the start-up stage. SVC Cinema currently compete with four major competitors in Kota Kinabalu, Sabah such as GSC 1Borneo and Suria Sabah, Growball Cinemax Centre Point Sabah, Cathay Cineplexes Kota Kinabalu, Megalong Cineplex Megalong Mall Penampang.
Major Competitors
GSC 1Borneo & GSC Suria Sabah Golden Screen Cinema (GSC), the largest chain of cinemas in Malaysia was founded in 1998. GSC now has 26 cinemas in nationwide. GSC 1Borneo is located on the second floor of the 1Borneo Hypermall is the GSC’s 22nd location nationwide. It was opened on 6th June 2008 with 8-screen Cineplex, 1504 seating capacities, and DTS and SRD sound system. It features are allocations for physically-challenged patrons in selected halls and concessions counters.
Therefore, GSC Suria Sabah commenced it business on 20th May 2010 situated at 8th floor Suria Sabah Shopping Mall. It has 8 screens Cineplex; which one of the halls equipped with the first Digital 3-D hall, 1481 seat capacity, and SRD and SRD EX sound system. GSC Suria Sabah special features also includes twin seat, wheelchair space, and E-Payment and SelfPrint facilities are available. Growball Cinemax Centre Point Sabah Growball Cinemax Kota Kinabalu is located at 8th floor Centrepoint Shopping Centre, started it business in the year of 2010.
It has 9 screens including one 3D screen. Growball Cinemax offers the cheapest confectionery compared to other cinemas in Kota Kinabalu. In the other hand, Growball Cinemax also boasts a lounge that has a live band at selected times and multiple Karaoke rooms.
Threat of Substitutes
Threat from other sources of entertainment. Nowadays, advancement in technology such as film DVDs and Blue Rays, television, newspapers, magazines, radio, internet, MP3 and other advances in technology related to entertainment make SVC faces competition. These orms of entertainment compete with cinemas for the discretionary spending of patrons for the ad-spend of advertisers. SVC cannot be certain that they will not lose some of our cinema audiences to these competitors or lose advertising revenue to them. If SVC are not able to compete effectively, their business, results of operations and financial condition could be affected.
Buyer Power. SVC was the first cinema open in Indah Permai area. It was one of its kind and due to lack of similar cinema around, SVC has an upper edge as far as buyer was concern. It charges an affordable price and position itself as a premium service. Although other competitors such as GSC, Growball Cinemax, etc have come up with other advancement in their products or services, SVC still can enjoys a strong position in the market since it has further strengthened premium position by launching leisure cinema at a strategic place.
Marketing Strategies
Marketing strategies need to be broken down into strategies in specific areas such as differentiation product, pricing, distribution, and promotion. Objective Salvatore Cinema looks forward to be a premium positioning in the cinema industry. Besides that, Salvatore Cinema also expects to deliver the best services and high quality films that meet customers’ satisfaction with an affordable price to customers.
Differentiation. Product Salvatore Cinema serves a different service for our customer. We provide a special service to our customers. We make our customers feel like going to the cinema as in their own homes. We upgrading some equipment such as chairs provided for customers to watch movies. In other cinema, customer cannot adjust their chair according to customer’s own comfort, but for our chair, the chair can be adjusted according to customer’s own comfort.
Salvatore Cinema is also providing food delivery service in the cinema. Customers usually have to queue up to buy tickets, and after buying a ticket customers who want to buy popcorn or other food have to queue again. Salvatore Cinema provide food delivery service where customers only need to order a meal during purchasing tickets at the counter and our employees will deliver the order before the movie start. Salvatore Cinema will only open one hall that has a luxury concept. Salvatore Cinema will provide one hall with the concept of luxury as an attempt to get a response whether this concept are acceptable or not. If the concept is acceptable our company will open two halls for each branch for the luxury cinema concept.
Pricing. The Salvatore Cinema offers several rate for the ticket. For latest movies, the price will be RM11. Mid-night movie’s ticket will be at RM12. We are giving a lower rate of RM5 to the children. Besides that, we also charge a special rate for a particular day. On Wednesday and Friday, the price for a ticket is RM7. Friday is what we call as the ladies night. Obviously, the price of RM7 on Friday is only given at night time. Special rate for a student is only be given during weekdays which cost only RM6. Normal price is charge during weekends.
Distribution. Our channel strategy is to use selective distribution to have Salvatore Cinema tickets sold directly to customers, by online booking tickets or by calling Salvatore Cinema to book for tickets. During the first year, we will be providing flayers that state our address, website and telephone number to customers so that the customer knows how to reach us.
Promotion. For the first month of opening, Salvatore Cinema giving a regular size of popcorn for every purchase of a ticket for free. There will be a night for the ladies on every Friday. It is a privilege for the ladies on that night in terms of the ticket fee. The fee will be at RM7.
Market Segmentation
Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and application for the relevant goods and services depending on the specific characteristics of the product. Salvatore Cinema choses demographic segmentation to segment our product to make the product become more efficiency to distribute.
Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. Salvatore Cinema sets this segmentation based on the resident of Sepanggar. Salvatore Cinema is determined to be a community-oriented business and seeks to serve as much of the population as possible. With a college in town, there is an ample student market, consumers who often have limited transportation options.
Targeting. A target market or target audience is a group of people that will basically need or want your products and services. Target market is defined in terms of age, sexual orientation, gender, economic class, religion, ethnicity, or location. This socio-economic grouping process actually allows businesses to create profiles of the typical consumers who will likely buy the products of your company. SVC being the first of its kind has always been a market leader and therefore its offering to the customer is innovative . SVC has premium pricing and we target mainly family and students. SVC has brought to its customers the experience of comfortable and affordable. SVC uses the concentrated method as we have target a much focused audience out of the entire masses.
SVC Cinemas has also recently introduced the concept of luxury viewing to Sepanggar. SVC have been introduced for the first time in Kota Kinabalu, Sabah have two ultra-luxurious exclusive auditoriums, each equipped with 32 plush and fully reclining seats and generous legroom. Customers can also enjoy star like treatment at the exclusive lounge which provides an excellent pre cinema experience with scrumptious food and beverages SVC use differentiation method for pricing. We practices different price slabs for different target audience. For instance, we have tickets ranging from RM6 (for the youth) to
Positioning
Positioning is the development of a specific marketing mix to influence potential customers’ overall perception of a brand, product line or organization. The term position refers to the place product, brand or group of products occupies in consumers’ minds relative to competing offerings. SVC has a very well planned market position. Our premium positioning affects the customers perceptual positioning. Therefore, we decided on the marketing strategy and pricing, keeping the target market in mind. In case of SVC, we make use of all our tangible elements to prove to the customers that our movie tickets are worth the price they are paying.
Also, since some of the other movie theatres are still offering movies at rates as low as RM6, it is the task of the marketer to ensure that SVC comes across as a superior brand in terms of cinema viewing as well as the experience.
Executive Summary
Salvatore Cinema is the first cinema that opens in Indah Permai. Since our location is near to UiTM and near to housing, our company decided to open a cinema in Indah Permai. Our target market is UiTM student and resident those live near Indah Permai. Even though there is another cinema in Kota Kinabalu, we believe that our cinema is differs from others cinema.
Salvatore Cinema has our own strategies to promote our cinema. Our company will always upgrade our services and equipment to give the best service to customer. Salvatore Cinema will always give the best promotion form customer in order to make our customer satisfied with our service. In the future, Salvatore Cinema will provide more service to customer such as food delivery to the hall to make customer feel more relax. Our company also want to be the best cinema in Kota Kinabalu in the future. Our company will compete with another cinema in a healthy way.
