CINEPLEX ENTERTAINMENT: THE LOYALTY PROGRAM

GROUP 7

1. PROJECTING YOUR OWN MOVIE GOING EXPERIENCE, DISCUSS

CUSTOMER PERCEPTIONS AND ASSESS LIKELY RESPONSE LEVELS TO THE REWARDS FROM DIFFERENT SEGMENTS.

Internal Development Teenagers Young Adults Young Working High High Moderate

Flight Miles Partnership Low Low High

Scotiabank Proposal Low Moderate High

Young Families
Older Families Retirees

Low
Low Low

Moderate
Moderate Moderate

High
High High

2. WOULD YOU RECOMMEND DEVELOPING THE REWARD PROGRAM ALONE, OR PARTNER WITH FLIGHTMILES OR SCOTIA BANK? WHY?
ATTRIBUTE Costs to company INTERNAL DEVELOPMENT $5.5 mn & diminishing thereafter 16.56% (5.3 mn unique visitors) Complete Control over data & program ownership There will not be any Brand cannibalization PARTNERSHIP FLIGHT MILES WITH PARTNERSHIP WITH SCOTIA BANK Approx. $6.51 mn ($3 mn + $ 1.7 mn + $ 1.8 mn) 21.25% (6.8 mn customers) NA Promotion in theatres and bank branches One of the big 5 banks in Canada Shared Financial Risk (50:50) Prior Experience with data management Each debit/credit card holder will be issued a Cineplex Loyalty card Naming rights on 3 major theatres Bank machines in all theatres Constrained decision making power Multiple card system $15 mn + $0.9/transaction + paying each time they access data 21.87% (7mn database) NA Immediate entrance to data of 7 mn people and other flight miles partners $250000 contribution to Cineplex designed marketing campaign Easy reach to large Canadian population No additional card to be carried 3 years commitment No easy exit option Would lose access to all data on exiting Extra cost incurred to access DB & to issue points customer

Penetration Rate Data Ownership Pros

Cons

Financial risk unredeemed points

of

New DB and team to monitor the same

Long term project

GO WITH SCOTIA BANK PARTNERSHIP OPTION

Advantages: Cheapest and easiest way for Cineplex to establish a large customer database Financial and data management risks would be shared No barriers for contractual exits Win Win Situation Suggestions: Shared decision making powers Gather customer preferences via advanced technology at PoS Execute a single card/cardless strategy

3. SHOULD THE LAUNCH BE ROLLED OUT REGIONALLY OR NATIONALLY?

Launch should be rolled out Nationally

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 national roll out

4. HOW WOULD YOU APPLY THE LEARNINGS FROM THIS CASE TO A BUSINES LIKE PVR IN INDIA?

PVR located in metros Low inclination for flight travel High usage of credit/debit cards in metro cities Select the bank with maximum or second maximum transactions during ticket purchase Internal Development is cost-intensive and not their core competence

THANK YOU !!