CASE STUDY ON

MAKING MAGIC THE MULTIPLEX WAY

ASSIGNMENT

Economics & Management Decisions

SUMMARY:
The case study on MAKING MAGIC THE MULTIPLEX WAY reveals the
shift in consumers preferences with respect to watching films. Nowadays,
people are expecting more than an experience from entertainment
industry. Cinema goers are ready to pay reasonably well for getting that
kind of more than an experience. This shift in consumers preference is
due to the change in their economic status and change in attitude towards
viewing experience. People have started to prefer multiplexes over single
screen cinemas since they find more variety under reasonable prices.
Multiplex culture has started to spread out to many other small towns and
cities which have led to drastic shift among film goers. The contribution of
multiplexes to film industry accounts to 35% which is a very encouraging
economic factor. Thus the middle class people are also able to get more
than a cinema viewing experience by the revolution caused by the
emergence of multiplexes.

Questions:
1) What lessons can you draw from the case regarding consumer
behaviour?
Due to the increase in employment opportunities, there has been a
significant growth in population in urban areas like metro cities. Since the
earning capacity of individuals has increased gradually, people are ready
to spend more for entertainment segment. But there has also been a
significant shift in the preference of spenders when it is concerned with
entertainment. Various new financing options from banks like credit
purchases has also made middle class urban India to start enjoying things
which upper classes had been enjoying for the past couple of years.
People like to either have more entertainment for less money or
more entertainment under a single roof. Multiplex industry has timely
capitalised of this need of consumers and has started to improvise more
on these needs. These factors can be drawn regarding the change in the
consumer behaviour.

2) Do you think change in consumer perception in middle class has

been instrumental in emergence of multiplexes? What can be
the other reasons?
Definitely the change in consumer perception of the middle class has
been instrumental and influential to a large extent for the emergence of
multiplexes. And also the need for more entertainment under a single
roof and at a reasonable price has been rightly understood which has
led to the proper positioning of multiplex business.
The population of middle class India is more which the target market for
the multiplex industry is. The earning capacity of middle class has also
 considerably improved to a great extent and continues to improve still
further too.
The other reasons for the emergence of multiplexes are
a) Emergence of fashion outlets of various brands in multiplex malls
since from a marketing point of view there is an immense potential
in positioning and selling of products.
b) Global brands find it as the right place for positioning their brand and
products among the maximum spending community.
c) Food chains have found an excellent place to sell out their products
in a mass scale since people who come to multiplex have an idea of
experimenting out with new things under a single roof.
d) Window shopping is more prominent in these multiplex malls which
help for advertising and marketing in a much easier way.
e) Due to the presence of many shops / brands under a single roof, the
maintenance cost is shared in smaller unit which consumes less from
the profit a shop earns.

3) Which of the groups, according to you, would have demand for

multiplexes?
No of Household in
CATEGORY OF Millions
PEOPLE 1994- 1999- 2006-
1995 2000 07
Very Rich 1 3 6
Consuming 29 55 91
Climbers 48 66 74
Aspirants 48 32 15
Destitutes 35 24 13
From the
above table, the data can be used for interpreting which segment of
population has been influential for the emergence of multiplexes.
 100
91
90

80 74
70 66

60 55

50 48 48

40 35
NUMBER OF HOUSEHOLDS (in millions) 32
29
30

20 15 15
13
10 6
13
0

CATEGORY OF HOUSEHOLDS

1994-95 1999-2000 2006-07

From the graphical representation of the data, it can be analysed and

interpreted that the potential market for the multiplex industry has been
and will be among the Very Rich, Consuming and Climbers segment of the
entire population. There will be a continued increase in trend as long as
the earning capacity of the people, belonging to the above mentioned
groups, improves. India is the future global market and its symptoms have
already started to make its presence which in turn will improve the
economic status of various groups of Indian population.

4) Would law of diminishing marginal utility apply to movie

watching? Will this affect the growth rate of multiplexes? Or
can it be seen as a cause for establishment of multiplexes? Give
arguments in support of your contention.
The law of Diminishing Marginal utility would take a back step when it
comes to entertainment industry as long as there is innovation in it. The
income level of the very rich, consuming and climbers group will
continue to increase as long there is increase in growth opportunities of
India since these three groups are linked to each other. Growth of the
multiplexes will not be affected in a negative sense but every new
multiplex must come out with a novel idea in targeting these target
potential markets innovatively with new and attractive features which
will be valuable for the consumers. This means that knowing that there
will be change in consumer preferences periodically; it should be the
responsibility of the multiplexes to revive itself with innovative ideas for
 its existence. The consumers would not compromise on getting the full
cinema viewing experience which is got at perfect quality in
multiplexes.

5) Can multiplexes use the concept of consumer surplus for

attracting more consumers? How?
Consumer Surplus is the difference between the prices which the
consumers are willing to pay and the amount which they actually pay.
As the earning and buying capacity of the consumers increases, the
concept of consumer surplus can be used to attract more customers.
The multiplex developers can take this opportunity to make good
business by providing good quality entertainment to the customers. As
the spending capacity of the consumers is good, the consumers wont
mind to spend more to get satisfaction in the service they get from
what they pay. So only the multiplex business offers tickets at higher
rates than the single screen cinema halls thereby able to invest more
on technologies which can attract more and more customers by giving
them an incredible experience.

From the entire case study, it is clearly evident how multiplex

business emerged to its peak by utilising the increased potential among
the middle class people. They were quick to sense the opportunity that
has come into existence among a particular group of people. Thus it can
be said that multiplex business will tend to be more profitable as they
improvise their technology to provide an excellent viewing experience
to the customers.

CASE II Sunder Singh

1.

What does the purchase of a product like Nike mean to Sunder Singh?
Sunder Sing, just escaping homelessness is clearly proud that he was able
to save and buy a pair of Nikes. He could undoubtedly have purchase a
different brand that would have met his physical needs as well for
much less money which he does not say why he bought the more
expensive Nikes, a reasonable interpretation is that they serve as a visible
symbol that Sunder Singh is back as a successful.

Sunder Singh is not Unique among low-income consumer in wanting and

buying items such as Nike shoes. As one of an expert says. The low
income consumer wants the same product and services other consumer
want. He suggests that marketing efforts reflect those desires. Another
expert state. Theres this stereotype that they dont have enough money
for toothpaste and thats just not true. There has been some significance
to them being called lower income, but they do buy things.
The working poor are forced to spend a disproportionate present of theirs
income on housing, utilities and medical care due to lack of insurance.
They generally relay on public transportation, they spend a smaller
portion of their relatively small income on meals away from home and all
forms of entertainment such as admission, pets and toys; they spend very
little on their own financial security. However Sunder Singh illustrated they
spend the same percent of their income though a smaller amount on
apparel and accessories. Nike is the number one global sports brand in
the world. Its famous swoosh is instantly
recognizable. For youth Nike is a fashion brand. Sunder Singh, a 32 years
single man without family and cheated by his girl friend; currently a
newspaper seller after losing his best & hours shift job with 2 employer
proves that he belongs to economically lower middle class. Buying from
own saving a second hand Nike shoes from fleamarket shows he loves to
have a fashion like an upper economy class consumers. For him
Nikemeans a fashionable icon. Sunder Singh virtually belongs to
believers of VALS approach to psychographics segmentation.

2) What does the story say about our society and the impact of marketing
on consumer behavior?

The story says the following about the society:-

Negative nature of sunder girl friend who marries with other without
caring him and leaving him indestitute.

The positive ethical nature of young man who helps Sunder Singh in
getting a livelihood.

The effects of ditching on Sunder Singh by his depression and come back
to live a normal respectfullife.

The impact of marketing on consumer behavior is listed below:-

Consumers are now in a way of adapting to modern culture.

Marketing raises the hedonic needs of consumer by making them aware

of available products and
services in market.

Change in motivational intensity.

Arousal in motivation of consumer behavior.

Influencing consumers personality.

Affecting of change on Brand Personality