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

2/3/13

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

Firms image

Value
2/3/13

to customer

1.EVALUATION OF POTENTIAL
PARTNER

2/3/13

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 ones 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
Cineplexs 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 wouldnt 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

2/3/13

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
dont 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.

Lowest initial investment costs $200000

Vast experience in IT strategy and in
developing CRM programs for leading
organizations
Program proposals

2/3/13

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 Canadas

important national bank would help in

Sharing financial risk

Boost cost efficiency

Increase program coverage via branches

Accrue revenues faster

2006s 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