Project_on_consumer_research_study_on_multiplexes_in_vadodara_actual.docx

PROJECT ON CONSUMER RESEARCH STUDY ON MULTIPLEXES IN VADODARA

Submitted by: Shivang a. kalambekar M-13 T.Y.BBA (marketing management) Faculty of commerce,

Submitted to:Mr. Sachin bhattbhatt Department of commerce, Faculty of Commerce, M.S.University of Baroda

M.S.University of Baroda

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Certificate of Research Guide This is to certify that Shivang a. Kalambekar Roll no. M-13 a student of M.S.University has done his full-semester project training

The project work entitled “CONSUMER RESEARCH STUDY ON MULTIPLEXES IN

VADODARA” embodies the original work done by Shivang A Kalambekar

Project Guide

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Declaration I hereby declare that the project work entitled “War of the multiplexes – A Customer Satisfaction & Customer Preference Survey on Multiplexes in Vadodara ” submitted to MSU BBA is a record of an original work done by me under the guidance of Mr. Sachin Bhattbhatt and this project work has been done under BBA degree . The information given herein, statements & other related papers enclosed along with this report are to the best of my knowledge & belief, true & correct in all respects.

Shivang A. Kalambekar Maharaja Sayajirao University of Baroda T.Y.B.B.A - Marketing Roll No.: M – 13

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ACKNOWLEDGEMENT I owe a great many thanks to a great many people who helped and supported me during the writing of this project .My deepest thanks to Mr. Sachin Bhattbhatt , Department of Commerce , MSU , the Guide of my project for guiding and correcting me at every step during this research work . He has taken pain to go through the project and make necessary correction as and when needed. I express my thanks to Dr. Paremal H. Vyas, Associate Programme Director, and MSU BBA for his support. I would also thank MSU BBA for giving me an opportunity to work in this direction. I want to express my deep gratitude to all my friends and classmates for their support and guidance. I also extend my heartfelt thanks to my family. Last but not the least I would like to thank the almighty God.

Shivang A. Kalambekar Maharaja Sayajirao University of Baroda T.Y.B.B.A - Marketing Roll No.: M – 13

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LIST OF TABLES Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12

Particular No. of films Revenue contribution domestic Revenue contribution international History of Bollywood Emergence of multiplex Growth drivers Industry organization Challenges Attributes Inox evolution Existing inox multiplexes Upcoming inox multiplexes

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LIST OF GRAPHS Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

Particular No of admissions Industry revenues Growth rate Distribution of theatres Distribution of income Screens per population A multiplex Age wise distribution Retail space Change in expenditure Entertainment tax rates Digital screens state wise Age Gender Occupation Quality Comfort Value for money Status symbol Ticket price Frequency of visit Monthly expenditure Most preferred multiplex Suggestion for reduction in ticket price Suggestion for more offers and discounts Suggestion for more ticket booking facilities Suggestion for reduction in price of refreshments Overall most satisfying multiplex Reason of overall entertainment Reason of physical facilities Reason of staff behavior Drive-in theatre Single screen theatres Future of multiplexes Competitive advantage Business model Income mix Total revenue Income mix 6

38 39 40

Total revenue Cost mix No of patrons

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CONTENT AT A GLANCE SR. NO. 1 2 3 4 5 6 7

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9 10

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11 12 13

PARTICULARS CERTIFICATE OFRESEARCH GUIDE DECLARATION BY CANDIDATE ACKNOWLEDGEMENT LIST OF TABLES LIST OF GRAPHS EXECUTIVE SUMMARY CHAPTER – I  INTRODUCTION.  RATIONALE OF THE CONSUMER RESEARCH STUDY  SCOPE OF PROJECT  OBJECTIVE OF PROJECT CHAPTER – II  ENTERTAINMENT INDUSTRY  MULTIPLEXES  REVIEW OF LITERATURE CHAPTER – III  RESEARCH METHODOLOGY. CHAPTER – IV  DATA ANALYSIS AND INTERPRETATION CHAPTER – IV  FINDING, SUGGESTIONS & CONCLUSIONS LIMITATIONS QUESTIONNAIRE BIBILIOGRAPHY

PAGE No. 2 3 4 5 6-7 9 11 14 14 15

17 30 62 64 68

86 105 106-110 111 8

EXECUTIVE SUMMARY This study is all about to understand the consumers’ perception towards the multiplexes and to forecast the future of multiplexes in ‘B’ grade city like Vadodara .It also measures the customer satisfaction and room for improvement for the multiplexes .Related topics like demand for a drivein theatre in the city and the fate of single screen theatres in India and specifically in Vadodara have been discussed here within .This study is carried out with the help of non-disguised structured questionnaire which discloses the responses of the respondents towards the multiplexes. As per the data collected we found that all respondents welcome the culture of multiplexes in the city. The people are very happy to have the pleasant experience of watching the movies in multiplexes which they so far used to get only in metropolitans but now in their homeland. The study reveals that the future of the multiplexes in Vadodara is very bright. The people are willing to spend more on entertainment and the metropolitan culture has started intruding in the city. From the feedback of 31 respondents interviewed, INOX emerged as a clear winner out of the 4 multiplexes – INOX, Fame, PVR and Chandan in Vadodara. Respondents feel that single screen theatres still stand a chance and would love to have a Drive-in theatre in the city.

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CHAPTER-1

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INTRODUCTION A movie theater, cinema or Multiplex is a venue, usually a building, for viewing motion pictures ("movies" or "films"). Most movie theaters are commercial operations catering to the general public, who attend by purchasing a ticket. The movie is projected with a movie projector onto a large projection screen at the front of the auditorium. Some movie theaters are now equipped for digital cinema projection, removing the need to create and transport a physical film print. A multiplex is a multi-screen entertainment complex showing different films under one roof with other type of supporting business in the vicinity like Restaurant, Shopping arcade and other entertainment avenues such as Game parlor, DJ party hall, Bowling, Cafeteria, Ice skating etc. Emergence of multiplex has made movie going out an event. People can go at just about anytime and find something to watch. It also enables exhibitor to show a variety of movies appealing to several segments of moviegoers while serving patrons from common support facilities such as Box Office, Concession areas, rest room, and lobby. The multiplex model is based on the concept of Umbrella Entertainment built around a primary anchor movie. Cinemas are considered to be an integral part of cities and they contribute to the definition of a local geography and identity. They also contribute to the preservation of the collective memory, since they constitute a significant social and cultural practice linked to a specific place, which acts as a common reference or landmark for many individuals. The impact of multiplexes and megaplexes on the urban fabric, as well as urban planning policies in certain countries, is considerable . Most of the multiplexes are located near the center or in the suburbs of major cities, and since they constitute a part of the urban fabric they must contribute to the quality of urban life and respond to urban planning needs. In relation to city centers, there is always the danger of urban decay and therefore they must be regenerated. This implies containing the growth of commercial developments on the suburbs. The main question that arises relates to the ways that a multiplex affects the development of a city, the quality of life of its residents (and tourists), and, perhaps, the planning legislation in some countries. India currently has 11500 existing screens, 95% are standalone, single screens. These single screen cinemas are poorly maintained as the owners find it difficult to upgrade and renovate their facilities, due to unavailability of organized finance. The deteriorating quality of these cinemas dissuaded viewers and they started using alternative viewing options. Over the last few years, multiplexes have emerged as a trend in urban India. "Multiplexes" are essentially cinemas with 3 or more screens. They provide a quality viewing experience and are generally located around shopping malls to increase footfalls in these malls. Each screen in a multiplex has small seating capacities in the range of 150-300 seats as compared to single screen cinemas which have capacities in the range of 800-1,200 seats. The journey of multiplex which was started in 1997 with inauguration of first multiplex Priya Village Roadshow (PVR) Saket in New Delhi is currently at crossroads roughly a dozen players have entered in the business in small or big way. New players are trying to enter this sector and the 11

existing players are busy expanding their horizons. The multiplex has gone beyond the metros to redefine entertainment in Tier 1 and 2 cities. The entertainment industry growth is 19% in India. And total market worth is about 51,300 crore in India in year 2008.The multiplexes are often characterized by a good ambience, comfortable seating, air-conditioning, and modern infrastructure On one hand the primary sources of multiplex income are: Patron’s spending viz. ticket sale, F&B, and parking, Advertisement Income, Management fee and Revenue sharing. On the other hand the prominent components of expenses are: Cost incurred for the working of a multiplex are: Distributor Share, F&B Cost, Lease Rentals, Other Operating costs, and Entertainment Tax. The multiplex owners are working on different business models to increase their reach and profitability. Vadodara is the third most-populated city in the Indian state of Gujarat after Ahmedabad and Surat. It is one of four cities in the state with a population of over 1 million, the other being Rajkot and the two cities listed above, although it has a massive population of over 3 million. It is also known as the Sayaji Nagari (Sayaji's City after its famous ruler, Maharaja Sayajirao Gaekwad III) or Sanskari Nagari (The City of Culture, a reference to its status as the Cultural Capital of Gujarat). Vadodara or Baroda, formerly the capital city of the Gaekwad State, is situated on the banks of the Vishwamitri, a river whose name derived from the great saint RishiVishwamitra. It is located southeast of Ahmedabad. It is the administrative headquarters of Vadodara District. Vadodara is home to almost 1.6 million people (as of 2005), the beautiful Lakshmi Vilas Palace and the Maharaja Sayajirao University of Baroda (M.S.U.) which is the largest university in Gujarat. Its famous for various faculties and departments, including the Fine Arts, Performing Arts, Technology, Management, Psychology, Social Work, Law and Medicine streams. It has a high literacy rate by Indian standards of 78% (2001). Major industries include petrochemicals, engineering, pharmaceuticals, plastics and Forex. Famous companies such as ABB, Reliance Industries, Larsen and Toubro, IPCL, ONGC and Sun Pharmaceuticals all have a strong presence in this city, also it has presence of IT multi-national companies.

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Key Terms  Marketing Research Marketing Research is the function which links the consumer, customer, & public to the marketer through information - information used to identify & define marketing opportunities & problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of market as a process. Marketing research specifies the information required to address these issues; designs the method for collecting information; manages and implements the data collection process; analyses the results; and communicates the findings and their implication (G. C. Beri, 2000; page no. 4).

 Customer Also called client, buyer, or purchaser, is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services. However, in certain contexts, the term customer also includes by extension anyone who uses or experiences the services of another. A customer may also be a viewer of the product or service that is being sold despite deciding to not buy them. However, "customer" also has a more generalized meaning as in customer service and a less commercialized meaning in not-for-profit areas. To avoid unwanted implications in some areas such as government services, community services, and education, the term "customer" is sometimes substituted by words such as "constituent" or "stakeholder". This is done to address concerns that the word "customer" implies a narrowly commercial relationship involving the purchase of products and services. However, some managers in this environment, in which the emphasis is on being helpful to the people one is dealing with rather than on commercial sales, comfortably use the word "customer" to both internal and external customers.

 Consumer It is a broad label for any individuals or households that use goods and services generated within the economy. The concept of a consumer is used in different contexts, so that the usage and significance of the term may vary.

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 Brand Preference It means the preference of the consumer for one brand of a product in relation to various other brands of the same product available in the market. Customer may be buyer or user. Buyer is the person who makes actual or uses the product or service. The choice of the consumers is revealed by their brand preference.

 Customer Satisfaction It is the individual perception of the performance of the product or service in relation to his or her expectations (Leon G. schiffman & Leslie Lazar Kanuk, 2009; page no. 29).

SUBJECT Customer’s Preference and Satisfaction for the Multiplexes in Vadodara.

 RATIONALE OF THE CONSUMER RESEARCH STUDY The Proposed research study would report on selected customers’ expectations and experiences with regards to their feedback about their particular choice of multiplex located in Vadodara City in the state of Gujarat. In this study an attempt would be made to measure and evaluate customer’s satisfactions or dissatisfactions from conveniently drawn sampling units, who have enjoyed watching a movie from a particular multiplex. This will help us to know the outlook of customers towards different multiplexes and the quality of services provided by them.

 SCOPE AND COVERAGE OF THE RESEARCH STUDY:The study shall be undertaken in Vadodara City in the state of Gujarat, to measure and evaluate current state of customerspreference , customer satisfaction and their actual experiences with regard to selected particular choice of multiplex located in Vadodara City in the State of Gujarat. There were a total of 4 multiplexes covered – Chandan , Fame ( 7 Seas ) , Inox and PVR .

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

PROJECT OBJECTIVE

For any research work there has to be some objective which can highlight the purpose of doing the research work. The objective of the study is to find the consumer preference for a particular multiplex among consumers in Vadodara city. In the study the researcher aims at analyzing the following aspects:      

To collect data from selected consumers’ of movies from the Vadodara City in the State of Gujarat, on selected criteria. To obtain the opinion from selected customers’ of particular choice of multiplex about their preference, satisfaction and actual experiences with availing the service of multiplexes. To obtain the opinion from selected customers’ about type of services provided by different multiplexes in the city. To study the overall perception of selected consumers’ of a particular multiplex. To find out the alternative choice of consumers in case of non-availability of their favorite multiplex To find out still existing market for single screen theatres and new opportunities for a Drive – in theatre.

This research was conducted in two phases. In the first phase the study was based on the results of a wide survey, that is, personal interview with the aid of printed questionnaires. The second phase of study was conducted by Secondary Research using Google and other Databases. The internet basically serves the purpose for the same.

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CHAPTER-2

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THE INDIAN FILM INDUSTRY Entertainment is always seen as a major source for leisure, relaxation and information and improved living standard translates into higher needs for leisure and entertainment. It is also an established fact that entertainment is generally recession proof. The Indian Entertainment industry, which primarily consists of film software, distribution and exhibition, television software and broadcasting, music, radio, is one of India’s oldest and prominent industries. It is the largest in the world in terms of ticket sales and number of films produced annually. India accounts for 73% of movie admissions in the Asia-Pacific region, and earnings are currently estimated at US$8.9 billion. The industry is mainly supported by the vast cinemagoing Indian public. The Central Board of Film Certification of India cites on its website that every three months an audience as large as India's billion-strong population visits cinema halls. Indian films are popular in various parts of the world, especially in countries with significant Indian communities. The Hindi film industry, based in Mumbai is the largest branch of Indian cinema. The number of movies produced in India is the largest in the world. Approximately 23 million Indians go to see a film every day. According to a survey done by Earnest & Young, more than 70% of the Indian Film Industry believe that the film business in India is expected to grow by more than 15% in the next three years. Going forward with improvement in distribution, exhibition infrastructure, the advent of digital cinema and better exploitation of films, the industry is likely to grow at a compounded annual growth rate of 18% to gross $2244mn by this year. The overseas market has become increasingly lucrative for Indian producers with most films realizing 15-20% of their income from overseas. Entertainment & Media industry’s total revenue pie is estimated to grow at a compounded annual rate (CAGR) of 19% to be worth Rs.83,740 crore by 2010. The current size of the industry is about Rs.35,300 crore. The industry is estimated to outperform the country’s GDP growth each year till 2010 according to the 2005 annual edition of FICCI – Price Waterhouse Coopers’ report on the Indian E & M industry. The study attributes this to economic growth, rising income levels, consumerism, coupled with technological advancements and policy initiatives taken by the government, that encourage inflow of investments into the sector. Emergence of tier 2 and tier 3 cities in India holds a huge potential in the organized film exhibition industry and the organized retail industry. It is estimated that by 2006 – 2007, India will have a 91 million high consuming households, 74 million climbers and 15 million aspirant households, which will fuel the demand for entertainment. Further nearly two thirds of India’s population is below the age of 35 .

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The exhibition industry in India has over 12000 cinema screens with 13 screens per million head of population, the lowest screen average in the world. India’s screen density is very low. A combination of highly fragmented ownership, high entertainment tax rates, large cost of setting up new theaters, and unavailability of organized funding has resulted in many such theaters not being able to continuously upgrade or renovate their facilities, thus resulting in a decline in the quality of such theaters. Cinema industry also has undergone a change in culture & taste. Today no film can dream of 300 day run. The shelf life per film has drastically come down. If the film is good then, unfortunately pirated CD market makes sure that it is seen across the entire geography. If the film is bad, anyway nobody will come to theaters to watch it. Therefore piracy is a lose-lose situation. Herein comes the basic logic of converting theaters into digital exhibition medium and connecting it through satellite based networking. By the above, a new film can be released across many locations without variable cost of prints and make the new content available on the release day, in many locations, thereby solving supply issue of the content at the right time. Non-availability of new content on the release day, at their respective nearby place, is one of the major reasons for rampant piracy of films. The release of film in many locations simultaneously, reduces risk of failure and reduces piracy. This move will also in one stroke bring multiple content to theaters and theaters will no longer be just film exhibition centers but a place where gamut of entertainment & education can be served. Industry Facts:  Revenue for 2004 was estimated at Rs. 59 billion (US$1.3 billion), which was less than 1% of global film industry revenue and a fraction of the U.S. Film industry revenue, which was US$9.49 billion in 2003. (Source CII )  Nearly 80% of Indian Industry revenues come from Domestic and Overseas Theatrical.  On the contrary US Film Industry earns only 35% from box office sales and remaining 65% is derived from other revenue sources.  This clearly signifies the onset and potential of Multiplexes in the India.

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Language Number of films produced in 2007 Hindi Tamil Telugu Malayalam Kannada Bengali Gujarati Marathi English Oriya Bhojpuri Punjabi Telugu(dub) Tamil (dub) Others Total

223 162 245 77 75 42 16 73 9 21 76 12 17 11 31 1090 Table 1: No. of films produced

Graph 1 : No of admissions

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Graph 2 : Industry revenues

Table 2 : International Revenues

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Table 3: Domestic revenue

Graph 3 : Growth rate of industry

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Graph 4 : Distribution of theatres

Graph 5 : Film industry revenues

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THE HISTORY OF BOLLYWOOD 1896 1913

After 1920 In 1931

1945

1952

1964 1970 1989 1995

1997

The Lumière brothers' films screened in Bombay's Watson Hotel. Dhundiraj Govind Phalke is seen as the father of the Indian cinema: from his first work Raja Harishchandra (1913) onwards he constantly filmed episodes from the great Indian epics – the Mahabharata and Ramayana. The Indian film industry developed steadily; more and more production companies were set up. India's first sound film was produced. Sound films helped the Indian producers to find their feet properly; imported foreign films started to be less important. The first sound films were also produced in Bengali, Tamil and Telugu in southern India and Bengal in the same year.In the thirties, three producers (Prabhat, Bombay Talkies, New Theatres) were predominant in making popular yet socially critical films. The period during the Second World War and Indian Independence was an important phase for the Indian cinema. Many unforgettable films were made in these years. Saw the first Indian film festival in Bombay. The Bengali filmmaker Satayajit Ray completely altered Western perception of Indian films with “Pather Panchali“ : this was the first Indian film to win international recognition at European film festivals. In subsequent years the Indian film industry concentrated on light entertainment. This and above all the increasing importance of stars changed the industry considerably. The legendary director, producer and actor Raj Kapoor came to Switzerland for the first time to shootSangam In the seventies the mainstream cinema produced mainly action films. Meera Nair wins the Golden Camera at the Cannes film festival for her first film Salaam Bombay. Aditya Chopra's Dilwale Dulhaniya Le Jayenge, most of which was filmed in Switzerland, was the year's greatest success, and this brought a lot of imitators on to the scene. Advent of multiplexes

Table 4 : History of Bollywood 23

THE PROBLEMS FACED BY THE INDUSTRY      

Indiscipline among filmmakers. This made the industry fragmented and disorganized. Piracy leading to massive losses for the industry. Lack of resources in terms of finance, human etc. Lack of corporatized management. Limited studio space and lack of security lending to an expensive foreign locales resulting in drain of resources. Reluctance of financial institutions to fund non asset based ventures Lack of expertise to handle latest equipments.

SWOT ANALYSIS INDUSTRY

OF

ENTERTAINMENT

 Strengths  Entertainment is one of the most booming sectors in India due to its vast customer reach& a large customer base.  The growing middle class with higher disposable income has become the strength of the Entertainment industry.  Change in the lifestyle and spending patterns of the Indian masses on entertainment.  Technological innovations like online distribution channels, web-stores, multiand mega-plexes are complementing the ongoing revolution and the growth of the sector.  Indian film industry is second largest in the world and the largest in terms of the films produced and tickets sold.  The low cost of production and high revenues ensure a good return on investment for Indian Entertainment industry.  Multiplexes with primes location with high average ticket price & strong brand equity.

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 Weaknesses  The Entertainment sector in India is highly fragmented.  The lack of efforts for media penetration in lower socio-economic classes, where the media penetration is low.  The film exhibition business’s fortunes depend on the success of the films they are showing  Rapid development of digital technology and the advancement in the broadband and networking space  Low margins and seasonal factors in the movie exhibition

 Opportunities  The Indian film industry is the largest film industry in the world in terms of number of films produced and tickets sold each year expecting growth will be continue in upcoming years in to producing movies.  The concept of crossover movies has helped open up new doors to the crossover audience and offers immense potential for development.  The increasing interest of the global investors in the sector.  The media penetration is poor among the poorer sections of the society, offering opportunities for expansion in the area.  Rise in the viewer ship and the advertising expenditure.  Technological innovations like animations, multiplexes, etc and new distribution channels like mobiles and Internet .

 Threats  Piracy, violation of intellectual property rights poses a major treat to the Media and Entertainment companies.  Lack of quality content has emerged as a major concern because of the 'Quickbuck' route being followed in the industry.  With technological innovations taking place so rapidly, the media sector is facing considerable uncertainty about success in the marketplace.  Increased competition from other entertainment sources like IPL, affecting occupancy rates in Theatre.  High Real Estate price is a huge barrier to profitability of this sector.

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UNTAPPED MARKET India's craze for films has not been fully exploited by the "Film Exhibition" industry due to the lack of screen density in the country coupled with the poor quality of screens. "Films" has been one of the integral components of the Indian entertainment industry contributing nearly 27% of the total revenues of the entertainment industry. Besides, films also contribute to other components of the entertainment industry like music, television and live entertainment. The Indian film industry is one of the most complex and fragmented national film industries in the world comprising of a number of regional film industries like Hindi, Tamil, Telugu, Kannada and others. The Hindi film industry is the most popular among them. Though India produces the largest number of films in the world (Approximately 1000 per year), it accounts for only 1% of the global film industry revenues. In spite of being over 90 years old, the Indian film industry was accorded the status of industry only in 2000. Over the years, the Indian film industry has been highly unorganized as film financing was dependent on private and individual financing at extremely high interest rates. Only recently, the industry has got access to organized finance. With vertical integration taking place between producers, distributors, exhibitors, broadcasters and music company’s corporatization is now taking shape in the Indian film industry. We believe, that corporatization, will bring about transparency, accountability and consolidation which will help to improve the overall profitability of the Indian film industry as well as reduce piracy and leakages which presently account for 14% of the Indian film industry's revenues.

Graph 6 : Screens per population

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TREMENDOUS SCOPE Film exhibition forms the most important component of the Indian film industry. According to the - KPMG report domestic theatrical revenues contributes 57% of the total Rs59bn film industry revenues and are expected to grow at 17%. Overall, the Indian film industry is expected to grow at 16% CAGR it is expected to reach Rs143bn in 2010. The main pockets for film exhibition in India are Delhi, Mumbai and South India. Due to various regional language film industries in the South, it has become an important film exhibition pocket. Hyderabad and Bangalore are 2 southern cities where occupancies are exceptionally high at around 70%-80%. The opening of the film industry to foreign investment coupled with the granting of industry status to this segment has had a favorable impact, leading to many global production units entering the country.

CORPORATIZATION OF INDIAN FILM INDUSTRY The trend of corporatization of the Indian film industry, considered to be one of the most important aspects for the growth of the industry, continued to gather momentum in 2006. Some of the key indicators of corporatization in 2006 include:The IPOs of production house: Like UTV and Saregama in 2005, 2006 witnessed the IPOs of Prime Focus Ltd. and K Sera Sera Productions Company. Percept Picture Company received funding from Bennett & Coleman. Several companies entered into long term contracts: with directors and actors to secure their content pipeline . Industry sources also indicate that more than half of the releases in 2006 were by corporate rather than individuals. Corporate are also establishing their presence in the film distribution space with media conglomerates like UTV Software, Sahara Group and Eros International entering this segment.

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GLOBALIZATION OF INDIAN CINEMA Today, Indian cinema is becoming increasingly westernized. This trend is most strongly apparent in Bollywood. Newer Bollywood movies sometimes include Western actors (such as Rachel Shelley in Lagaan), try to meet Western production standards, conduct filming overseas, adopt some English in their scripts or incorporate some elements of Western- style plots. However, the meeting between west and India is a two-way process: Western audiences mostly of Indian origin are becoming more interested in India. The earnings from overseas market have wooed the Indian Filmmakers. The films are specially targeted to woo the overseas audience. The market is enough to get return on investment. The Indian actors and other film personalities become global stars. On the contrary, Western producers are funding maverick Indian filmmakers . The Hollywood film personality has started eying on Indian Film market respectfully.

FILM SCREENING A film screening is the displaying of a film, as part of its production and release cycle, before it is widely released to movie theaters. In general, "screening" applies to showing under special circumstances: either the environment or purpose will be different than that experienced by a mass market moviegoer. To show the film to best advantage, screenings can occur in plush, low seat-count theaters with very high quality (sometimes especially certified) projection and sound equipment, and can be accompanied by food and drink and spoken remarks by producers, writers, or actors. Screenings typically occur outside normal theatrical showing hours. The different types of screenings are presented here in rough chronological order of their use:

Types of screenings: 

Critic screenings occur for national and major market critics well in advance of print and television production-cycle deadlines, and are usually by-invitation-only. When a studio anticipates negative critical reviews, this step is frequently skipped; the studio instead relies on advertising, in-theater previews, word-of-mouth, and established knowledge of the target audience for the success of the film.



Private screenings are provided for investors, marketing and distribution representatives, and VIP media figures.



Premier screenings are provided for well-wishers from the film industry including actors, actress, film financer, and producer, distributor, invited VIP guests etc.

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

Film festival It is the presentation or showcasing of films in one or more movie theaters or screening venues. The films are usually of a recent date and, depending upon the focus of the individual festival, can include major international releases as well as those made outside a country's established film industry. Sometimes there is a focus on a specific genre or subject .

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MULTIPLEX Multiplex constitute only 2.3% of about 11,000 cinema halls in India, but they collect around 28% to 34% of the box office collection for the top 50 films in 2007. More than 300 additional multiplexes with 300 screens are slated to commence operations by end of 2009, a growth rate of 80-100% . An increase in the number of multiplex screens should result in an increase in film exhibition revenues, so the opening of new multiplexes represents a significant growth opportunity for the industry.India needs approximately 20,000 screens to cater the entire cinema viewing population.

Graph 7 : A Multiplex 30

EMERGENCE OF MULTIPLEX IN INDIA In 1979, world’s first multiplex ‘Eaton Center’ in Toronto, Canada was opened for the general public. In 1997 PVR established, first multiplex in India – PVR Anupam, New Delhi. The PVR Anupam changed the Indian movie exhibition landscape. Movie exhibition till mid nineties was dominated by Cinema halls – the traditionally single screen halls. Cinema halls witnessed a surge of customers mostly during the festive season and on weekends. The emergence of multiplexes changed the movie exhibition business in India. Today, all eyes in the entertainment industry have turned towards multiplexes, as they generate a larger share of revenue though they accommodate less number of seats per theater. The emergence of new multiplexes has reduced the audience for traditional cinemas. The multiplex business is not only prompting traditional cinema theater owners to convert their property into multiplex but in recent times has also attracted many international players to venture into the business. No wonder the multiplex business is so lucrative that foreign entertainment giants like Time Warner, South Korean multiplex operator Megabox, and Australia’s Hoyts are in talks with real estate developers such as the DLF group, the Raheja Group and Sobha Developers to set up chains of multiplexes across the country. New players are trying to enter this sector and the existing players are busy expanding their horizons. In recent times the multiplex has gone beyond the metros to redefine entertainment in Tier 1 and Tier 2 cities like Lucknow, Indore, Nasik, Aurangabad, Kanpur, Amritsar. The good news for most of the movie exhibitors is that at present roughly 70 percent of the total box office collections in the country come from non-metros. These multiplex has multiple screen movie theater complex which also offers lifestyle shopping. It offers brand new experience of watching movies. Today multiplex are considered not just a part of the entertainment, it is an opportunity for family outing which include movies, shopping, dining out, gaming parlors, buying books, buying groceries, etc. Most of the multiplexes malls in India have common structure, which believes structure of the ideal multiplex. Ideal multiplex malls have a four to five floors with various leisure and recreation options for customers. The top floor has multiplex and rest of the floors offer facilities. The structure of the multiplex mall explores the consumer psychology, where customers who come with the intention of watching a movie are made to pass all the floors in the shopping mall. It increases the possibility of their making some impulsive purchases. Moreover, the multiplexes do not allow outside food and beverages into the movie theaters which offer them opportunities to sale of their own products at a premium. The decade old Indian multiplex industry has definitely changed the movie exhibition industry in India. The multiplex industry, in India, is still in an early growth stage, and is way behind the size and scale reached in the developed countries.

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Table 5 : Emergence of multiplexes

SCOPE OF MULTIPLEX The cinema exhibition industry in India is growing at 10% per annum driven by multiplexes, which are expanding rapidly in major metropolitan cities as well as second and third tier cities. Favorable demographics in a cinema-crazy nation, tax exemptions, and quality locations such as malls, are driving growth of multiplexes in India. Most of the multiplexes in India are anchor tenants in the large format malls making a favorite destination for the youngsters as well as the families. Multiplexes captured the market as complete family entertainment centers. The digital revolution has helped the Media and Entertainment industry to go digital. There are more than 100 digital cinemas in India today. They have completely transformed the experience of the viewers. With an increase in the incomes of the people and increasing expenditure on the leisure activities, multiplexes are poised for high growth in India. Other than the sale of the movies tickets, Food & beverages is the major source of revenue for the multiplexes. Space economies and the optimal utilization of the capacities are the major advantages or benefits that the multiplexes enjoy over single screen theatres.

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WHY IS THERE A MULTIPLEX BOOM? In India there are about 20,000 theatres and there is a plenty of space and resources for an equivalent number of theatres to be started all over. Thus, there is a high growth rate for the multiplexes in the entertainment industry. Due to the high growth rate of the multiplex industry; various benefits are provided by the government such as overall tax concessions, reduction in entertainment tax and so on in order to motivate the industry person. Some of the other factors involved are given below: 

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Aspirations: There is a huge group of people who are very ambitious and have a status symbol (premium or the top class) or desire to possess it. Thus, these groups of people prefer to have an edge over others (middle and lower class) by viewing movies in a multiplex rather than a single screen theatre as it is a matter of pride and honor for them. Attitudinal Change: Gone are the days when one used to think about saving the money by not going to the theatre along with the family to watch a movie and instead go out for a picnic to enjoy the whole day. Gradually, this concept has changed now because if a person plans to spend his whole day for enjoyment along with his family, then multiplexes are the best option as they have everything from shopping stores to restaurants, cafeteria, games corner and so on. Combination of various facilities: The concept of satisfying the consumer under one common roof is growing rapidly all over the world. Thus there are two types of combinations found;  One is a “Mall with a Multiplex”. E.g. ‘R Mall has a multiplex ‘R Adlabs’ within itself. Recently, Fame Adlabs too opened its new multiplex in Malad within the mall named “Inorbit”.  Second is a “Multiplex with shopping facilities and various Amenities” within its roof. E.g. Imax Adlabs is a multiplex having within its games arena, cafeteria and other such amenities. Also, a person can shop during the promotional activities carried out by various companies within the multiplex and take advantage of various benefits and offers provided by them. The relationship between the multiplexes and the malls is referred as the “Synergy Effect”. It thus helps in satisfying the consumer with the required amount of amenitiesand facilities needed by bringing all the required resources under one common roof. This helps the consumer to enjoy his whole day at one common place instead of planning to go to various places in order to shop, dine and have fun with his family members. 

Provides employment facilities even for those who are not involved directly: This is one of the interesting cases found in the multiplexes. There are many departments involved in the smooth functioning of the multiplex such as 33

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Human Resource, Marketing, Food & Beverages, Administration and so on. All these departments are employed directly as per the requirements. Now, there is also a lot of employment scope for those people who are not involved directly in the multiplex industry. Many of the multiplexes that have huge space such as Imax Adlabs organize many events such as children’s day, teacher’s day, child festival and so on. Thus, to organize such events many people from outside are involved such as decorators, musicians, caterers who indirectly gets employed. More number of screens: This is one of the most important reasons for the multiplex boom. These are more screens, roughly 3-5, when compared to the normal movie theater (Single Screen). As there are many screens in the multiplex, people get a huge variety and range of movies to view. Also, the movie timings are flexible and thus a customer can view any movie of their choice as per their availability and convenience. Due to this the turnover of audiences as compared to the single screen theatres are relatively very high. Risk minimization: Also, the benefit that the multiplex has over the single screen movie theatre is the ‘risk minimization’ factor. The multiplex has various partners, various company collaborations, and thus they work together to achieve the goals set up by the organization. Also, the risk is minimized when the space is let out to various corporate organizations such as Reliance, Vodafone, HDFC, and so on for various product and promotional launches.

Such has been the runaway success of this cinema viewing experience that today, even though multiplexes make up just 2% of India’s nearly 11500 screens, they account for more than half the box office revenue of Hollywood releases in the country and more than a third for Bollywood. That success, however, has not been limited to the glitzy cinema halls.Industry analysts say that multiplexes, with their smaller halls, have also redefined filmmaking by creating a niche for experimental cinema among urban, educated audiences. Multiplexes, where ticket prices are five times that at a single-screen cinema, ensure a faster return on investment for producers and, because of quick turnarounds, have become instrumental in raising the output of films, he said. “The idea now is to recover investments within the first weekend,” said Bose, who has authored several books on Bollywood. The multiplex industry is expected to grow more than 44% to $220 million by next year, according to a recent report by brokerage B&K Securities. The overall Indian film industry, now worth about $2 billion, is expected to grow to $4.3 billion by 2011, Ficci says. While more and more single-screen cinemas are converting to multiplexes in cities, they still remain the entertainment mainstay for millions in small towns and villages. They are also popular with the urban poor because of their cheaper tickets. Analysts say high ticket prices have also meant that average occupancy levels in multiplexes have hovered at 34

around 40%. They say that as multiplexes mushroom and begin cutting into each other’s territories, occupancy levels could plummet to 30%. “This could mean the multiplex boom is a bubble that will burst unless ticket prices are brought down,” Multiplexes earn lot more from other revenue sources as compared to box office collections. However, due to the role of PULL creator that the movies play in this scenario, overall returns are highly correlated to Box office contribution. Most multiplex projects breakeven at an occupancy rate of 40-45%. This figure may vary as per the maintenance standards of various theaters and the revenue streams running parallel to it. Real estate is the major cost component and a strategic resource for the multiplex business. Typical built up area required per seat is around 30 sq. ft. and average no. of seats per seats per screen is around 250-400 as compared to single screen cinemas which have capacities in the range of 800-1,200 seats. A recent trend in multiplex operations has witnessed the proliferation of multiplexes in to nonmetro urban centers of the country. The primary targets in this include Pune, Baroda, Indore, Ahmadabad and Jaipur. The stiff competition that is likely to intensify with the coming up of so many multiplexes does not seem to worry any of the players. No doubt the industry is likely to witness a few shake-outs with the indiscriminate mushrooming of multiplexes, but the ones with a prominent chains and proper financial backing will hold their ground.With multiplexes came the multiplex style of management: plush seats, superior sound quality, add-ons - all at a price, of course. Consumerism has always existed. Today multiplexes are offering better facilities to a section of the audience that can afford it. Theatre owners are not allowed to change the nature of their business unless they retain 33 per cent of the original number of seats in their new enterprise. Further, the government has not considered the fact that not everyone can afford to watch a film in a multiplex considering the high rates of admission. This will only promote a backdoor boost to video piracy.

 Other Multiplex growth drivers  Multiplexes have access to prime locations as a large number of mall developers are considering setting up movie theaters to attract footfalls in the mall. Multiplex operators are emerging as anchor tenants for malls and are therefore being offered attractive rental rates.  Occupancies in multiplexes are higher as compared to single screen cinemas as the seating capacity per screen in a multiplex is less than that of a single screen.  Different screens in a multiplex have different seating capacities. The multiplex operator can therefore choose to show movies on a larger or smaller screen based on the expected potential of a film. Besides the multiplex operator can also choose to show movies on larger screens in the first few weeks of release and later continue to show this film on a smaller screen.

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 Multiplex operators can charge different prices depending on the time and popularity of the film.  Multiplex operators use common manpower for several screens and hence have better cost efficiencies.  Multiplex operators can offer a wide range of food and beverages as multiple screens use common food and beverage facilities. This wide range helps in increasing the F&B spend per patron.  Multiplex operators can achieve significant operating efficiencies due to better film management and common vendor relationships.Due to the large number of screens, multiplex operators have better bargaining power with distributors.  Entertainment tax, levied by the state, is the main levy on the exhibition industry. This varies from 30% to 100% of the net ticket price from state to state. Recently certain states have announced entertainment tax holidays for newly constructed multiplexes. This is likely to increase the profitability for these multiplexes.  Film production is presently going through a wonderful phase as far as supply of funds is concerned. This space has been attracting a lot of attention because of its inherently strong fundamentals. A number of players with deep pockets have entered this space, which should keep the content pipeline robust over the coming years. In this year so far, an investment pipeline of $1.7bn has been announced in this space. Producers are now flush with cash and are no longer overly dependent on informal sources of funding. This trend will continue in the medium-term and supply of content will not be a problem for multiplexes. Moreover, ticket sale reporting is far more transparent in multiplexes than in single-screen theatres. This results in higher film revenues for producers.  The shelf life of a movie has dramatically reduced from a few months earlier to merely a 1-2 week window now. This has significantly reduced the time window within which producers / distributors can monetize the movie and recover their costs. Multiplexes, with multiple screens, have far more flexibility in scheduling of movies, which enables them to exhibit multiple shows of a single movie simultaneously, thereby helping distributors recover a majority of the anticipated revenues from the film during the first week itself.  Today, multiplexes are contributing 35-40% to the overall domestic box office collections with less than 5% of the total screens under operation. The format is highly relevant for the distributors and none of them can afford to bypass it and still make money on films.

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 Hollywood films are increasingly finding acceptance in India, making India the fifthlargest market of Hollywood films in Asia and the 15th largest market for Hollywood globally. An increasing number of Hollywood films are being released in India in multiple languages with greater number of prints . The number of foreign films released in India is set to grow, especially with large studios such as Yash Raj Films foraying into foreign film distribution. It is expected trend to benefit the multiplex industry in terms of ensuring a steady content.  Multiplexes are often regarded as the footfall magnets for malls. The concept of shopping-cum-dining- cum-entertainment outing is gaining popularity among the urban populace, where multiplexes in malls become the most relevant destination choice. Almost all upcoming malls have a multiplex operator as an anchor tenant. Hence, the supply of real estate will not be an issue for the sector, even though the pace might be slow due to development delays. India is presently witnessing a retail revolution with many big players foraying into organized retail and many mall development plans being announced in order to cater to their expansion plans. The pace of mall development will surely ensure availability of quality real estate .  India is a highly favorable country for consumer industries with all the key indicators pointing towards higher consumer spends in the coming years. It has seen its per capita income doubling in the last 6 years, it has more than 60% of its people under the age of 60, urbanization and exposure to western lifestyle is rising, all leading towards increasing consumerism in the coming decade. In the buoyant times; people tend to spend more on the leisure based consumption. For the multiplex sector, the target group is in the age group of 15-30 years of age, which visits the theaters more often than others.  India is an entertainment hungry nation, and the major sources of entertainment are cricket and Bollywood. More than 3.3bn tickets are sold in India annually, this makes us the most cinemas going population in the world. Most of the single screen theatres are run by single proprietor, often without proper operational management skills. Moreover, because of the poor quality of prints supplied to the single screen theatres in the rural areas, footfalls have been coming down. On top of it, these screens are not eligible for entertainment tax exemptions. These factors have eroded the viability of these screens resulting in poor infrastructure spend whichfurther reduces footfalls.  With the entry of multiplexes, which provide better quality movie watching experience at a higher price compared to single screen theaters, more and more 37

middle income group people are coming back to the theatres thus unlocking a latent demand. This is a classic case of leisure consumption winning over value proposition in India. As content supply booms, more and more people will turn to multiplexes because of the rising willingness of people to pay for such services.  There is enough space for more multiplex projects given the quantum of demand and lack of supply in the sector. Our preliminary analysis suggests that at national level and considering only the urban population demand in the age group of 15-30 years, 662 multiplexes with 3 screens per property i.e. 2000 screens can operate at 35% capacity. All of the multiplex players combined are operating only 500 screens at present.

 Growth drivers for multiplex in tier2 and tier3 cities Favorable demographic changes.  Increase in disposable income with expanding Indian middle class people.  Organized retail boom.  Entertainment tax benefits for multiplex cinemas.  Good quality of hindi cinemas.

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Graph 8 : Age wise viewers

Graph 9 : Retail space

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Graph 10 : Change in expenditure

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Graph 11 : Entertainment tax rates

Table 6 : Growth drivers

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Table 7 : Industry organization

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 Drawbacks of a Multiplex  Multiplexes charge a 30%-50% premium on ticket prices as against standalone cinemas. This is one the major drawbacks of multiplex operators as multiplexes attract only a section of the society consisting of the Rich and Upper Middle class. The premium charged by multiplexes is for the better ambience as well the high quality audio and visual effects.  In certain areas, multiplexes have become a cause for traffic jams. People residing near multiplexes find this to be a nuisance. To set up a multiplex, a series of approvals and licenses have to be acquired by the mall developer as well the multiplex operator. This is due to the heavy regulation imposed by state governments. These regulatory issues are a cause of concern as they cause delays in setting up a multiplex.  Multiplex are a source of increasing pollution and consumption of limited valuable natural resources.  Multiplex business requires huge financial investment and is very risky as multiplexes often succumb to their losses due to less footfalls , less patronage , less business , etc especially in recessionary times .

 The Major Players Multiplex, in India is witnessing unprecedented growth. A few big corporate house have already entered the business and others are planning to venture in the business through acquire existing players. However, industry experts rule out any consolidation in the industry. They believe market is still in the growth stage and there are enough opportunities for the existing players. In current scenario competition is heating up among the existing players. Adlabs, PVR, IOX, Fun, Fame, DT Cinema, Satyam Cineplexes have chalked out big expansion plans to increase the number of screens in the next few years to get better share of movie revenues. These include nationwide  PVR  Fun cinemas  E city  Inox  Adlabs  Fame  Cineplex 43

A TYPICAL MULTIPLEX  

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Multi Screens: A normal multiplex has 4 screens with 8-10 movies running so that customer can choose the desired movie. Ticketing options: The ticketing options in multiplexes are very systematic as compared to a normal single screen theatre. There are lots of options available for booking the tickets such as advance booking, home delivery, internet booking, tele- booking and current booking. Thus, one doesn’t has to spend a lot of time in booking a ticket as there are various options available. Cafeteria: The multiplexes also have cafeteria in their vicinity which gives the consumers limited options to satisfy their hunger and thirst as quickly as possible during the screening of the movies. Entertainment: Entertainment facilities are available for the children within the multiplex arena in the form of games arcade, fun house etc. Also, special events such as Valentine’s Day, Friendship Day and many more are organized which entertain the teenagers. Malls: The invent of malls within the multiplex and vice versa has madeshopping easier as everything can be done under a common roof, from enjoying to shopping, dining etc. Restaurants: They also form a part and parcel of the multiplex and satisfy the consumers with wide range of food and beverages.

 AIM OF EVERY MULTIPLEX  To appeal to a wider audience as possible to increase viewing and therefore profit. To accommodate all different walks of society.  To increase how often people go to the cinema.  Mainly specialises in main stream films because they are the ones society is most aware of due to the media and this is why they mainly specialise in general genres such as comedy , romance , family , action and adventure and steer clear of controversial films to prevent offence and secure viewing.  Not always to make a profit but also due to contracts have to show films for a certain amount of time due to the demands of distributors and film companies.

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MARKETING MEDIA CHANNELS FOR COMMUNICATION  Print Print media such as Newspaper, magazines, journals, pamphlets, poster etc.at he time of release of movie, these media are used to advertise intensively. E.g. Bombay Times, Midday.

 Radio Second most used medium. Multiplexes attract customers by various contests on Radio. Leading Radio stations Radio Mirchi, Radio City etc

 Web Personal website for multiplex is used by firm to market the movie. Promotional activities and the new happenings along with new releases information is being constantly provided on website. Bookings are also done on website.

 SMS New trend setup by multiplex is use of mobile sms for marketing. The database of numbers is compiled by collecting phone nos. from the customer who watch movies. And then any promotional things, new release movies, reminder to customers is been done via sms.

 Hoardings This is used to recall customers about the movies being screened at multiplex. Thus along with multiplex are also promoted. Hoardings are placed both at populated place and in multiplex which attract customers.

 Tie-ups: Multiplex has tie-ups only when it has promotional activities to be conducted within its premises. It works with the company that is promoting and markets both the company’s product as well as officials of multiplex.

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 Public relation: This activity supports all the activities which are used to promote multiplex. Writing and giving any promotion and it take care of any misunderstanding between consumer and multiplex.

 In –House Branding: This promotional activities been taken in the premises of multiplex. Different sections like, entertainment area, cafe area and dome area and so on. Every section tries their best to retain the viewer.

MARKETING STRATEGIES  Entertainment Marketing Marketing of entertainment services is referred as entertainment marketing. Entertainment services include screening of movies, their premiers, press & media required special screening of movie show & also different types of eatables served within the multiplex is divided into two types namely:  Movie Marketing: this is one of the most important areas which is marketed & helps in creating a brand image for the company. The main focus is to market the movies that are big screened along with creating & making aware the people about the multiplex. Also during such premier’s press & various media channels are invited to cover the whole premier event which has a positive effect on the multiplex. As stars are called for the premiers of special movies along with outside people, this act as s “synergy effect” and thus more & more number of people become aware about the multiplex and its day to day activities. All above this with the help of various media channels, huge & extensive advertising is done for the movies which add to the recall value on the minds of the people.  Café Marketing: This is an altogether new concept started and undertaken by multiplexes for marketing its movies. It basically helps in promoting its movies with thehelp of eatables sold in the cafeteria within the premises of the multiplex. Here the eatables are named after the movies & various film stars during the release of much hyped & successful movies. 46

 Special Events Marketing: the positive point that multiples gains over others is that along with the screening of various movies it also screens special event such as F1, cricket matches, various documentaries and social messages that are to be passed in community. Multiplex also organize celebration of religious festivals as well as special days such as valentine day, friendship day, Independence Day & republic day & events.It arranges for many events & birthday parties as per the customers’demands.  Tie up With Various Corporate: Multiplex has tie-up with many corporate associates as they help each other in their day to day activities. Both of these go hand in hand. Their relationship is of “give & take” type; it is like the corporates organize or host the events that are conducted in the multiplex & in turn the multiplex gives it sales indirectly.  Movie Shootings & Advertisements: Multiplex also allows shootings for movies & advertisements as it helps to publicize & create a brand name for itself. Movie shootings advertisements take place here because of the ambient factors & also space the surrounding. Also it acts as a business activity as the movie makers are not given the premises free of cost.  Special Screening of Hollywood Movies: A new concept started by many multiplex is the screening of Hollywood movies at their theatres. These special screenings are referred as “Midnight Matinees”. Midnight Matinees is another innovative attempt on the part of multiplex to combine various elements of leisure & partying with cinema viewing.

MULTIPLEX V/S SINGLE SCREENS IN INDIA A lotof such cinema halls / theaters were set upover 30-50 years back, largely by local entrepreneurs and businessmen. A combination of highly fragmented ownership, high entertainment tax rates, large cost of setting up new theaters, and unavailability of organized funding has resultedin many suchtheaters notbeing able to continuously upgrade or renovate their facilities, thus resulting in a decline in the quality of such theaters. However over the last 5-7 years, factors such as strong economic growth, falling interest rates, increased interest in real estate development, increased consumption levels, etc. have resulted in a large boom in the Organized Retail sector in India. A number of large organized 47

retail outlets have been trying to attract large footfalls by building in attractive properties such as branded food & apparel outlets as well as theater chains. In fact, movie theaters – especially the new format multiplexes which provide high quality viewing experience – are fast expanding in numbers with newly added attractions and stores offering various products and services.

 Demands of Single screen theatre Owners       

Entertainment Tax reduction. Hike in service charge. Exit policy (The business could not wind up). Electricity at concessional rates. Abolition of show tax imposed by municipal bodies. De-linking of Property Tax from box-office collections. Exemption on taxes for film hoardings in theatre premises.

With multiplex industry’s soaring business and ominous presence, can the single screen cinema halls sustain its business, is the biggest buzz. Single screen theatres and talkies in the city are a passé now. They are inconspicuously disappearing into oblivion in the wake of rampant multiplex culture. Besides the government ordinance which ensures a complete entertainment tax waiver and concessions to multiplexes, the populace audience also has deserted the single screens. The nature of multiplex entertainment, which offers video arcades, bowling alleys andpool parlors spiced up with their lavish and multi-cuisine food courts, does ensure that the audience is lured towards its glitterati.

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Graph 12: Digital screens state wise

FAREWELL, SINGLE SCREEN So what if multiplexes constitute just 1% of the total number of cinema halls, and 4-5% of the 12,900 screens, in India, the industry is talking about the end of single screens. Single screens, with their low quality ambience, would find it tough to survive in the long run, it is felt. But over a period of time, theatres will die a natural death. This is because there isa rising demand forquality cinema exhibition infrastructure. Also, before long, digitization will be the industry standard and exhibitors will have to shift to it.Though the propensity to watch movies in India is high, there is a big gap in terms of quality- viewing experience between the metros and the smaller cities. Now, increasing property prices is a big concern, of course. But most multiplex owners have tied up properties for at least the next couple of years. Also, being the anchor tenants in a mall, they are always offered special rates by developers.It's the same for other top players as well. One of the key focus areas is also expansion to smaller towns, with populations of up to five lakh (500,000). Property prices in these places have been comparatively stable, which makes these cities more attractive. So, at least on the surface, there's nothing much to stop the multiplex boom. The coming of age of direct-to-home services like movie-on-demand and live gaming are unlikely to make the millions of fans across a country of fanatic fans resist the first day-first show temptation of Bollywood.

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SEGMENTATION, TARGETING AND POSITIONING  Segmentation  Geographic segmentation: Region: South India includes Chennai, Bangalore, Tamil Nadu, Karnataka etc. West India includes Mumbai, Gujarat, Maharashtra, Goa, Rajasthan etc., North India includes Punjab, Delhi, MP, UP, Bihar, Haryana etc., and East India includes Kolkata, West Bengal. City: class 1, class 2, metros. Population: population over 20000. Over 50000, over 100000 etc.

 Demographic segmentation Age: Current Population: 1 billion+ (1,080,264,388) growing between1.4% to 1.8% annually. Age structure: 0-14 years: 31.2%, 15-64 years: 63.9%, 65 years and over: 4.9%. Median age: 24.66 years . A younger population tends to have higher aspirations, and will spend more as it enters the earning phase.

 Segmentation factors  Urban consumer’s shopping basket is changing:Within the overall private final consumption expenditure there are category shifts happening in urban consumption pattern. A study by KSA Technopak, India shows that urban consumers have increased their expenditure on leisure & entertainment. Spends on eating out, movies and theater, and books and music has increased the most. At the same time urban consumers’ saving and investment has reduced from 14% to 5.2 %.

 Increase in Disposal Income :Multiplexes generally cater to high and Middle income Groups, with an increase in the number of households within this earning group, will result to higher consumption and spending patterns. Similarly migration of households from lower income to middle income levels will further drive the consumption patterns. Urban consumers have increased their expenditure on leisure & entertainment. Simultaneously spends on eating out, movies and theater, and books and music will increase. 50

 Changing Demographic profile: India is witnessing a significant change in the age profile of its’ over 1bn population, which is likely to lead to accelerated consumption over the next few years. India has a median age of 24 years for its population against 36 years for the USA and 30 years for China. A younger population tends to have higher aspirations, and will spend more as it enters the earning phase. The owners mostly divide the films as per the category of films i.e. they mostly show the movies which are more successful in screens like animation movies at morning shows only. After that they show all family type movies or adult movies at night.

 Targeting Companies now are mostly targeting teenagers i.e. college going students, which are capturing hearts of all who like to watch movies in theatres. They keep cheap price for tickets during the morning shows and the price is increasing as time in a day passes. This usually attracts the youngsters and people who work at night shift. The different schemes are framed to increase the sales on Tuesday to Thursday where the sales goes down. The rates of ticket high for new release and when there are any hit movies running on Saturday and Sunday.

 Positioning Cinemas have acquired a very good position in the viewer’s mind. It usually attracts all the age groups as they provide good services. Cinemas are located at many places but the public is more attracted towards Mall. Within a short period of time they have attained goodwill in the market.

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SERVICE MARKETING MIX  Product This takes the customer-benefit concept and translates them in order to determine the aim and intention of the organization. It is based of idea that actual service offered could be divided in to no. of levels which relates to customer’s need, satisfaction and benefit.  Core service benefit level: The Core Competency here is Screening of Movies. This provides platform for the development of other peripheral levels.  Expected service level: The minimum set of expectations customer has about service and which marketer must strive to provide are cinema hall, Box – office, Food & Beverage counter, Proper lighting facility etc.  Augmented level: It includes fundamental service and benefits that distinguish from competitors. The augmented services are enormous like the Shopping arcade and other entertainment avenues such as Game parlor, DJ party hall, Bowling, Cafeteria, Ice skating etc. Good options for food like the Cafeteria where you get food made in hygienic conditions.

 Price This is only element of the marketing mix which generates revenue. It must correspond to the customer’s perception of value. Uses differential or flexible pricing for segmented customer. Factors affecting pricing classified as:  Internal factor which are controllable: Organization, other marketing mix elements, positioning, Fixed and variable costs.  External which are uncontrollable: Competition, Demand, Regulatory factors and unregulated factors. Characteristics of service such as Intangibility, perishability, variability affects. The average between Rs. 70 & Rs 250 depending upon the box office performance of the movies screened and the show time & day. The rates of morning shows are quite cheap and affordable and as the day time pass the rates are likely to be increased to target different patrons.

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 Place The production place and distribution place is inseparable. The distribution means provision of personal service and information to the customer which adds value. The 2 important aspects which must be taken care of:  Availability of service at right time and right place.  Should be accessible with care and convenience by customers. To select location the determining factors are target marketplace, sales, interaction, customer needs and wants, infrastructure facility, competitors operation place, flexibility to accommodate future needs etc. The exhibition companies are targeting urban as well as rural parts of country. Franchising can help to increase the sales. The multiplex has its outlet in popular malls only.

 Promotion It helps in encouraging sales and creating awareness among segmented group. Continuity in communication, tangibility to service, through internal employee behavior the promotion can be done. Apart from Advertising in (radio, print media), sales promotions (Contest, games, premium gifts, coupons), personal selling (Inbound call center, frontline employee), public relations (Sponsorship of event, inter college festivals, events, press release, social and community involvement), publicity, Word of mouth (reference through celebrities), Website etc. Marketers may support InTheatre advertising and promotions with standees, Backlit Display boards, Floor Graphics etc. Popcorn Bag Sponsorship, Product Sampling and Coupon Distribution. Provision of schemes to target non-peak period in a day or week with various schemes like Buy 1 Get 1 Free , variable rate of discount on other days (Monday, Wednesday, Thursday).Corporate bookings, group bookings , Discount of popcorn and cold drinks. Membership card to provide better service to regular customer, Competitions, quiz, game show, Product launches Product displays and on-the-floor contests

 People The interpersonal relationship between multiplex (Website, box office person, security & bag checker, Ticket checker, person at food & beverages counter, cleaners, call center people, home delivery person, online person etc.) Andcustomer plays very important role in customer satisfaction. This people are known as internal customer. The service quality is being judge by the customer on the behavior of the internal customer such as Reliability, Responsiveness, assurance, empathy, tangibility. The multiplex owners must empower the employee along with promoting teamwork, training 53

and development etc. Behavior in a friendly manner and always ready to help. Well dress especially in their uniform. The best employee can create loyal customers; achieve sustainable growth, profit increases.

 Process Designing of process includes Location facility, design and layout for effectiveness in workflow and to the customer convenience, procedure and job definition, degree of customer contact, customer participation, equipment selection, adequate capacity and quality measures. Managing queues so that available space can be utilized. The movie must be available to patrons customer) at their according time. The availability of service with a consistent quality should be the basic objective. Try level best to provide interactive experience to patrons .

Physical Evidence This is the tangible clues for the service which interacts with the customers. This includes seating facility which inferences comfort, layout, availability; facility inferences payphones, toilets, children amusement, atmosphere inference friendly, cold, indifferent; accessibility inferences location of entrance, car parking; service delivery inference efficient, prompt; overall appearance inference cleanliness, décor, lighting, attractiveness. Ambience includes temperature, lighting, noise, music, scent, color. Space felt comfort, accessibility, visibility. The directions are displayed regarding basic necessary things in specific places like screen, toilet, food counter, boxoffice, drinking water etc. They are providing to customer with different facilities like centralized air-condition, comfortable seats etc. which create good ambience. Furniture, layout, color of interiors, tickets, luxury & comfort.

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BASIC FUNCTIONAL AREAS  Design layout: Traditionally a movie theater, like a stage theater, consists of a single auditorium with rows of comfortable seats, as well as a lobby area containing a box office for buying tickets, a counter and/or self-service facilities for buying snacks and drinks, and washrooms. These Stage theaters are converted into movie theatres by placing a screen in front of the stage and adding a projector. Many of these early theatres contain a balcony, an elevated platform above the theater's rearmost seats. The rearward main floor "loge" seats were sometimes larger, softer, and more widely spaced and sold for a higher price. Rows of seats are divided by one or more aisles so that there are seldom more than 20 seats in a row. This allows easier access to seating, as the space between rows is very narrow. Depending on the angle of rake of the seats, the aisles have steps. In older theaters, aisle lights were often built into the end seats of each row to help patrons find their way in the dark. Step in the aisles may be outlined with small lights to prevent patrons from tripping in the darkened theater.

 Pricing and admission: In order to obtain admission to a movie theater, the prospective theatergoers must usually purchase a ticket, which may be for an arbitrary seat ("open" or "free" seating, first-come, first-served) or for a specific one. In the case of free seats, already seated customers may be forced by staff to move one or more places for the benefit of an arriving couple or group wanting to sit together. The price of a ticket may be discounted during off-peak times e.g. for matinées, and higher at busy times, typically evenings and/or weekends. It is traditional to offer the lower prices for Tuesday for all showings , one of the slowest days of the week in the movie theatre business, which has led to the nickname "cheap Tuesday." Almost all movie theaters employ economic price discrimination: tickets for youth, students, and seniors are typically cheaper.

 Movie theater culture: Movie theaters are associated with dating, popcorn and expensive treats. It is rather common that people throw and leave their garbage on the floor in a movie theater, as opposed to the cultural standard of cleaning up after oneself.

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 Lobby, food and drinks: Movie theaters usually sell various snack foods and drinks on concession stands. The facilities for buying snacks and drinks often represent the theater's primary source of profit since most of the ticket revenue goes to the film distributor (and onward to the movie studio).

 Luxury Screens: Cinemas in city centers are increasingly offering luxury seating with services like complimentary refills of soft drinks and popcorn, reclining leather seats and service bells.

 Seating: Patron has a ticket for a specific seat. The seat can also be selected by the patron. The seating arrangements are divided as per the facility provided by the exhibitor keeping all segmented target audience. The price for plush back or couple seat is higher than other seats.

 Presentation: A modern theatre presents shorts commercial advertising, then movie trailers, and then the feature film. Advertised start times are usually for the entire program or session, not the feature itself. Thus people who want to avoid commercials might want to enter later, and those who want to avoid the trailers, again later. Some movie theaters have some kind of break during the presentation. There may also be a break between the introductory material and the feature, usually limited to special circumstances involving extremely long movies. During the closing credits many people leave, some stay till the end. Usually the lights are switched on after the credits, sometimes already during them. Some films show additional scenes while the credits are rolling. In multiplexes, theater chains often feature a continuous PowerPoint-like presentation of slides between showings featuring a loop of movie trivia, promotional material for the theater chains or advertising for local and national businesses.

 Digital cinema: Digital cinema refers to the use of digital technology to distribute and project motion pictures. The final movie can be distributed via hard drives, DVDs or satellite and projected using a digital projector instead of a conventional film projector. Digital cinema is distinct from high-definition television .

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 Age restrictions: Admission to a movie may also be restricted by a motion picture rating system. According to such systems, children or teenagers below a certain age may be forbidden access to theaters showing certain movies, or only admitted when accompanied by a parent or other adult. Furthermore, where movie theaters do not have this legal obligation, they may enforce restrictions on their own. Accordingly, a movie theater may either not be allowed to program an unrated film, or voluntarily refrain from that.

 Ticket check; movie hopping: The theaters are arranged in such a way that tickets are checked at the entrance into the entire plaza, rather than before each theater. At a theater with a sold-out show there is often an additional ticket check, to make sure that everybody with a ticket for that show can find a seat.

 Anti-Piracy: Piracy occurs when unauthorized copies are made of music, movies and similar works. Initially, unauthorized recordings were made using hand-held video cameras to surreptitiously record movies shown at movie theaters. Most found guilty face a fine of varying degrees, although in some cases a jail sentence can be imposed. This is most likely to occur only for people manufacturing large quantities of unauthorized CDs/DVDs.

 Revenue or Accounting system: The distributor drive hard bargains entitling cinemas to as much as 55% of the gross ticket revenue during the first week and the balance changes in 10% increments per week from there.

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Risks and Concerns  Slowdown in content supply: As multiplexes are the consumers of content, they have no control over the supply quality and quantity. Multiplexes thrive on rising footfalls which in turn depend on the better supply of films from producers. Hence, any disruption on the supply side will definitely have a negative impact on the multiplex players' growth.

 Alternative entertainment avenues: Movies compete for customer attention with other forms of entertainment viz. DVDs, TV, cricket, festivals etc. An increased acceptability of these avenues will divert footfalls away from multiplexes. However, it is believed that there is enough room for all to exist and grow simultaneously. A case in point is US, where almost all forms of entertainment are present and have been well received by the consumers. Even then, footfall growth hasn't halted over there. Moreover, there might be possible synergies among these formats which might benefit multiplexes.

 Mall development delays Supply of quality real estate has been a problem in the past for multiplex players. Mall delays due to various reasons will hurt expansion plans of the companies. We are building in a 50% delay in mall handovers to the multiplexes in our analysis. Any delay more than this will hurt future growth of multiplexes.

 Uncertainty over entertainment tax: Entertainment tax in India is among the highest in the world leading to a much higher occupancy levels required for breakeven of multiplexes. Even though state governments have announced tax free windows for these players, uncertainty looms over the viability of multiplexes after the window expires. We believe that the levels entertainment tax will come down in the future, otherwise any increase will be passed on to the consumer to a large extent like it is done at present.

 Worsening economic environment: The whole footfall growth story depends on rising prosperity in the country leading to higher discretionary consumer spends. If the economic environment starts worsening for a prolonged period, it will affect patronage levels negatively pulling down top line growths. This are assuming very low CAGRs at the top line levels for all of the players and are quite optimistic that multiplexes will grow as expected. 58

Table 8 : Challenges

THE ROAD AHEAD The industry is excited about the opportunities for the multiplex growth in the tier II and tier III cities (smaller cities and towns). But the nature and profile of the multiplexes are different from those that exit in the metros. They tend to have less number of screens per multiplex and the price of tickets is usually Rs.70-80.All over the country the multiplex industry seems to be basing its growth on the mall format. The logic of this format seems to be to take advantage of the upper middle classes desire for shopping, entertainment and other leisure related aspects in ambience and ‘clean’ surroundings. The multiplex industry is quite concentrated in nature. It is dominated by about five companies which, between them own about 90 per cent of the screens in the multiplex sector. The multiplex industry is presently dominated by PVR Limited, Inox Leisure Limited, Cinemax India, Frame, Adlabs, Shingar Cinemas and E-City Ventures (owned by Zee Group). The new entrants who have announced plans to enter the segment include the DLF group (under DT Cinemas brand), Indiabulls and Reliance Retail (Mukesh Ambani group). The multiplex industry hopes to expand in the Southern part of India. The cumulative 59

investments that are expected in the next two year in south India are expected to be about Rs.850 crores for around 380 multiplexes. These multiplexes are in various stages of development. Industry participants have estimated that 125 south Indian towns have a potential for about 1000 multiplex screens. Pyramid Saimira plans to establish about 200,000 seats at an investment of about Rs.600 crores. The finishing cost per multiplex seat for the company is estimated to cost between Rs.30,000 to Rs.40,000. Shingar Cinemas plans to increase the number of multiplexes under its ‘Fame’ brand. It intends to invest Rs. 75 crores on six multiplexes in Vijayawada, Visakhapatnam, Chennai and Hyderabad. Their cost per seat is about Rs.50,000 to Rs.80,000. Cinemax intends to establish13 multiplexes by 2010 at an estimated cost of Rs.100 crores. PVR plans to establish 60 screens in South India. Adlabs recently announced plans to operate cinema halls across USA. It claimed to have entered into agreements to operate 200 screen cinema exhibition chains across 28 cities in USA. Adlabs and its parent, Reliance Entertainment Limited seems to be working on business logic that size and presence in all segments of the entertainment business matters most. It has announced its decision to enter the ‘multi-sensory’ cinema experience to audiences in India through a tie- up with Cinema Park Network, USA. This company had helped set up the Millennium Pavilion in Disney World, Orlando, USA and will upgrade some of the Adlabs Cinemas.

 REVIEW OF LITERATURE  Impact of multiplexes Author – Vishnu Parashar Objective – To study impact of multiplexes on the society He has explained the growth drivers in the multiplex industry and also the major players present right now . He has also discussed the risks and concerns associated with multiplex business . He has also given an outline of the costs and business models followed by multiplexes .

 Working of multiplexes Author- MrunmayeeBhave Objective – to understand working of multiplex She has explained Emergence of Multiplexes in India ,Film Exhibition Business in India and the Multiplex Boom . She has also compared Multiplex v/s Single Screen theaters and given framework of Segmentation, Targeting and Positioning 60

 Customer preference and customer satisfaction survey of multiplexes in Lucknow Author - Shalini Singh SachinAwasthi Objective - Customer preference and customer satisfaction survey of multiplexes in Lucknow They have given outlines to PEST Analysis ,Service Marketing Mix , Service Marketing Triangle for a multiplex . Their Basic Functional Areas , Risks and Concerns and questionnaire design have also been explained in detail

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CHAPTER-3

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SUBJECT Customer’s Preference and Customer Satisfaction for the Multiplexes in Vadodara.

PLACE The Survey is been done on the 4 Multiplexes In Vadodara • Fame (7 seas) • Chandan • PVR • INOX

DURATION The Survey was done from March 31 to April 5, 2012

DATA COLLECTION The views of the respondents were ascertained by means of a questionnaire. As far as possible, persons with different age groups , occupations and educational backgrounds were selected as a sample but the majority of the respondents are youth who constitute 93% of the total sample due to the nature of the industry. I approached 150 people as a sample and the questionnaire was filled by them.

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MARKETING RESEARCH PROCESS  Defining the problem The problem area for me is the perception and preference of different customer segment for different multiplexes and their services. To identify their weak point and to work on them for the mutual benefit of both the multiplexes and the customer is the major use of the marketing research. The decision problem faced by management must be translated into a market research problem in the form of questions.

 Determine research design The research design adopted by me was the CAUSAL DESIGN. Causal research seeks to find cause and effect relationships between variables. It accomplishes this goal through laboratory and field experiments.

 Identify data types and sources  Secondary data may be obtained from the internet , multiplex website , survey reports.  Primary data can be obtained by filling up questionnaires from the common public.

 Design data forms and questionnaires The questionnaire is an important tool for gathering primary data. Poorly constructed questions can result in large errors and invalidate the research data, so significant effort should be put into the questionnaires design. The questionnaire should be tested thoroughly prior to conducting the survey.

 Determine sample plan and size The minimum sample size on which the survey was to be conducted was 25 .For my project I asked 31 people who visited the various multiplexes in Vadodara between March 31 to April 5, 2012 to fill up the questionnaires.

 Data collection  Data is collected both from primary source as well as secondary source.  The primary source data was obtained by respondents filling the questionnaires themselves .  The secondary data was obtained from the respective multiplex's website and internet portals.

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 Data analysis  Before analysis can be performed, raw data must be transformed into the right format.  The data is tabulated to count the number of samples falling into various categories.

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CHAPTER-4

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RESEARCH FINDINGS 1. Age:-

age

Below 18 years 19-30 years 31-50 years 51 years & above

Graph 13 : Age

2. Gender:-

gender

male female

Graph 14: Gender

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3. Occupation:-

Occupation student service business housewife

Graph 15 : Occupation Student of schools and colleges visit multiplexes more often than others . A major shift towards multiplexes from single screen theatres can be seen here for watching movies .

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4. Please rank the reasons for your choice ( 5 being most important , 1 being least ) a. Better sound and picture quality b. Comfort c. Value for money d. Status symbol e. Ticket prices

reasons for choice 1 Quality most important very important important less important least important

Graph 16 : Quality Quality of picture and sound and the comfort offered were the top most reasons for watching a movie in a multiplex.

reason for choice 2 comfort most important very important important less important least important

Graph 17: Comfort

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reason for choice 3 value of money most important very important important less important least important

Graph 18: Value for money

reason for choice 4 status most important very important important less important least important

Graph 19: Status symbol Status symbol is less important for consumers of multiplex

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reason for choice 5 Ticket price most important very important important less important least important

Graph 20: Ticket price

Ticket price is least important element for customers.

6. How often do you visit a Multiplex? (Choose Any 1 Option) a. Weekly b. Twice a month c. Monthly d. Twice a year e. Yearly

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frequently visit multiplexes 14 12 10 8 frequently visit multiplexes

6 4 2 0 weekly

Twice a month

Monthly

twice a year

yearly

Graph 21 : Frequency

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7. What is your monthly expenditure on movies ? (Choose Any 1 Option) a. b. c. d. e. f.

< 100 100 – 300 300 – 500 500 – 700 700 – 1000 > 1000

expenditure on movies 14 12 10 8 6

expenditure on movies

4 2 0 < 100

100-300 300-700 700-1000 >1000

Graph 22: Monthly expenditure

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8. Rank the multiplexes in descending order (4 being favorite , 1 being least ) I.

II.

Characteristic Picture and sound Quality

Air conditioning

IV.

Food and refreshments

VI.

Inox

PVR

Washroom facility Drinking water facility

VII.

Staff behavior

VIII.

Gaming zone

IX.

Fame

Seat comfort

III.

V.

Chandan

Ticket booking facilities

X.

Shopping experience

XI.

Security arrangement

XII.

Parking facility

XIII.

Value for money

XIV.

Overall Ambience

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Results ( No. of people who consider the best multiplex in each characteristic )

Chandan 2

Fame 8

Inox 18

PVR 2

Seat comfort

6

8

14

3

III.

Air conditioning

6

11

12

2

IV.

Food and refreshments

6

10

12

3

Washroom facility

4

8

16

3

Drinking water facility

8

10

11

2

VII.

Staff behavior

6

8

13

4

VIII.

Gaming zone

6

11

13

1

Ticket booking facilities

6

13

10

2

X.

Shopping experience

4

5

18

5

XI.

Security arrangement

4

10

14

3

XII.

Parking facility

5

8

15

2

XIII.

Value for money

5

8

16

2

I.

II.

V. VI.

IX.

Characteristic Picture and sound quality

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XIV.

Overall Ambience

2

10

5

18

Table 9 : Attributes 9. Which is your most preferred Multiplex in Vadodara? (Choose Any 1 Option) Chandan

Fame

Inox

PVR

Prefered Multiplex 20 18 16 14 12 10 8 6 4 2 0

Prefered Multiplex

Chandan

Fame

Inox

PVR

Graph 23:- preferred Multiplex

10. Your suggestions (Choose Any 1 Option for each attribute) Attribute

Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

Reduction in ticket prices More offers and discounts

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Ticket booking convenience Reduction in prices of refreshments

suggesting reduction in price

strongly agree

agree don't know Disagree agree

Graph 24 :- Suggesting on reduction in ticket price

suggesting more offers and discount

strongly agree agree don't know disagree strongly disagree

Graph 25:- suggesting on more offers and discount

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suggesting on ticket booking convience strongly agree agree don't know disagree strongly disagree

Graph 26:- suggesting on ticket booking convience

suggesting on reduction in prices of refreshments

Strongly agree Agree

Don't know Disagree Strongly disagree

Graph 27:- suggesting on reduction in prices of refreshments

A lesser ticket price is what is most demanded by the customers interviewed as they feel agree. Besides that very highly priced food and beverages are a headache for the customers

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11. Which is the Multiplex which has given you highest overall satisfaction? Chandan

Fame

Inox

PVR

Multiplex which has given you highest overall satisfaction

Chandan Fame Inox PVR

Graph 28:- highest overall satisfaction 12. The reasons for your choice (Choose Any 1 Option for each attribute) Attribute

Highly Satisfied

Satisfied

Neutral

Dissatisfied

Highly Dissatisfied

Overall Entertainment Physical facilities Service provided by staff

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attribute on overall entertainment

Higest satistaction satisfaction neutral dissatisfaction Highest dissatisfaction

Graph 29:- attribute on overall entertainment

attribute on physical facalities

Higest satistaction satisfaction neutral dissatisfaction Highest dissatisfaction

Graph 30:- attribute on physical facalities

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attribute on service provided by staff

Higest satistaction satisfaction neutral dissatisfaction Highest dissatisfaction

Graph 31:- attribute on service provided by staff

Overall entertainment was the biggest factor in deciding about the multiplex giving satisfaction as customers want a full movie experience that is best in every way. Personal touch through behavior of staff was also important in shaping the outlook of the customer towards the multiplex.

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13. Do you think there is a need for a Drive – In theatre in Vadodara?( Choose Any 1 Option ) Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

need for a Drive- In theatre

Higest satistaction satisfaction don't know dissatisfaction Highest dissatisfaction

Graph 32:- need for a Drive- In theatre

14. Do you think single screen theatres have come to their end ? (Choose Any 1 Option ) Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

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single screening theatre has come to their end Higest satistaction satisfaction don't know dissatisfaction Highest dissatisfaction

Graph 33:- single screening theatre has come to their end

15. Do multiplexes have a bright future in India ? ( Choose Any 1 Option ) Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

bright future of multiplex in India

Higest satistaction satisfaction neutral dissatisfaction Highest dissatisfaction

Graph 34:- bright future of multiplex in India 83

CHAPTER-5

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THE WINNER OF “WAR OF MULTIPLEX” IN VADODARA

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INOX EVOLUTION INOX was set up to carry out the business of setting up, operating and managing a national chain of world class multiplexes under the brand name ‘INOX’.It opened its first multiplex, the Pune Multiplex in May 10, 2002 and today has a wide presence across 7 cities with 8Operational Units having 32 screens and around 9,290 seats. Year 1999 2002 2003 2004

2005

Milestone Incorporated Launched multiplex at Pune Bund Garden and Vadodara with 4 screens each Launched multiplex at Kolkata, Elgin Road with 4 screens Launched multiplex at Kolkata Salt Lake with 4 screens Launched multiplex at Goa, Panaji with 4 screens (hosted the International Film Festival of India) Launched multiplex at Nariman Point, with 5 screens Launched multiplex at Bangalore with 5 screens Launched multiplex at Jaipur with 2 screens Entered the Distribution business Won the Best Entertainment Retailer of the Year Award, 2005, at the ICICI Bank Retail ExcellenceAwards

Table 10 : Evolution of Inox

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VADODARA MULTIPLEX This 4 screen, 1318 seater multiplex is located at Race Course Circle, which is amongst the most premium localities part of the city, being located in the midst of affluent residentialarea, and less than a kilometer from the commercial districts of R.C. Dutt Road andAlkapuri. In addition to the multiplex there is a mall lobby on the ground floorfor other retail development, which has been leased out to tenants like McDonalds,Pantaloons and Café Coffee Day, Weekender, Baskin & Robbins and others. This multiplexwas also designed by TK Architects, and fitted with state-of-the-art cinema equipment.The multiplex also has parking facilities which is another 30,000 square feet in area. This is anentertainment hotspot for the premium class .

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SWOT ANALYSIS  Strengths     

Amongst the best locations in the city Financial strengths for acquisition and development ofproperties Early mover advantage – Amongst the first corporates Professionally managed organization Have been instrumental in playing a key role in shaping industry related policies.

 Weaknesses  Dearth of managerial talent with related businessexperience  Promoter not related to exhibition business

 Opportunities  Acquisition opportunities of single multiplexes/smallerchains in the consolidation phase of the industry  A shift in business model to the more efficient management contract  Opportunities in international markets

 Threats  Increased competition from organized and unorganized players  Alternative entertainment formats and technologies of admission to the cinema. According to the Gujarat Rules, the tickets shall be sold only at booking office(s) as approved by the licensing authority and specified in the license.

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Table 11 : Existing Facilities

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Table 11 : Upcoming Facilities

Graph 35 : Competitive advantage

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COMPETITIVE ADVANTAGE  Research backed investment They carry out in-depth research comprising of population segments, income patterns, spending habits, preferences and alternatives of consumers, as well as regulatory framework before selecting the cities where they wish to set up a multiplex.

 The early mover advantage Presently, the players in the multiplex industry are largely regional. They would be amongst the few players to conceptualizeand implement a business plan of establishing a national chain of world class multiplexes. This gives the company the advantage to lock properties in what they consider to be the best catchment areas of various cities which may make it difficult for future competition to enter in those areas.

 Location Location is as critical as content for the success of a multiplex business. While selection of right content helps in reaching out to the right target, selection of right location results in attracting higher footfalls. All the multiplexes would be located in high traffic commercial business districts or in the midst of affluent residential areas of each town / city of operation, which would provide them with a competitive advantage.

 Economies of being a national chain Controlling a chain of multiplexes across the country, gives an edge over local competition in accessing content – both interms of quality of content as well as terms of agreement between the content provider and the exhibitor, as well as provided them with some economies of scale due to better negotiating leverage and sharing of come common costs.

 Brand creation They have created brand equity through all their multiplexes, after their launch. Further, they are increasingly being recognized inthe industry as a committed long term player. All the projects represent quality benchmarks in the industry.

 Reputed Promoter They are promoted by GFL, which has experience in manufacturing and exports of refrigerants . GFL has an excellent reputation and track record with banks, financial institutions and investors and is known to conform to transparent corporate governance

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practices. GFL, being a listed company, has initiated measures for compliance with corporate governance, and is in compliance with all the requirements of corporate governance.

 Work with the best They have identified and used the best talent in the industry, from concept architects, interior designers, project managementcompanies, engineering consultants, etc., as also the best equipment available internationally, to put together state-of-the-artmultiplexes.

 Proven project management skills They have an in-house professional team for project implementation supported by Feedback Strategic Consultancy Services Private Limited. This model of implementing projects has enabled them to complete properties within budgets and time.

 Marketing strength The brand ‘INOX’ has been established in the consumers mind due to marketing through newspaper ads, radio spots, direct mailers, internet mailers and the use of promotions like paid previews, contests, movies merchandise, Disc Jockeyin the lobby over the weekend etc. Premieres of films are also used as an important marketing tool.

 Customer Orientation ‘INOX’ has built a clear focus on customer orientation, by providing services such as, telebookings, home delivery of tickets, internet and SMS bookings.

 Integrated Technology Backbone They have a laid a lot of emphasis on a technology and systems. INOX has a strong MIS system, on the backbone of a technically sturdy software system, which providesthem with regularly updated performance reports on all Operating Units. This assists them in day to day operations. They use software for the following:      

Ticket Sales; Concessions; Telesales/home delivery; Reports; Analysis; Accounts.

INOX has installed a specialized management exhibition software called Showbiz Multiplex at all Operating Units. They have invested in IT Infrastructure to connect all units with Corporate Office. 92

 STRATEGY 

:

Establish a national presence

 To identify prime locations for multiplexes and primary look at ‘City Centre Locations’. These would typically be multiplexes in premium residential or commercial areas in the cities where they operate, in pursuit of high traffic or high spending centers.  Expand into newer territories in the country in line with goal to create India’s largest network of world class multiplex exhibition facilities across all the leading towns and cities of India.  Identify acquisition opportunities which could be operating multiplexes/multiplex chains.

 Building a strong brand  Emphasis on “Live The Movie”, experience which largely associates itself with superior customer service, immaculate upkeep of facilities, ensuring highest levels of fire and life safety etc.  Explore opportunities for tie ups with various other suitable partners like mall developers or key retail brands so as to form powerful alliance relationships that will enable them to stay ahead of competition.

 Focus on a profitable growth  Increasing number of patrons:The thrust on the increasing number of patrons is through a ‘pull’ – innovative programming and ‘push’.  Innovative Programming: In addition to the traditional 12-3-6-9 format, they have introduced various innovative programming slots. Block Bookings : These are tie ups with various corporates for their employee entertainment or client promotion schemes say banks for their customers, special shows for employees.  Flexi Timings and Variable pricing : They offer different ticket rates depending on the timing of the show, day as well as seating arrangement which is typically classified as Gold and Premium. They also have the flexibility of timing the show which could begin at intervals of half an hour to one hour for various screens giving the patron convenience of watching a showoff their choice . The flexible ticket pricing approach helps optimize no. of patrons and spending per head.

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 Increasing F&B Revenues  Having a good mix of F&B items available and upgrading the menu periodically;  Display of F&B and a good and attractive picture filled menu board;  Make food combos for sale enhancement;  Offer food combos at block bookings.

 Advertising Advertisements for movies are done in the entertainment section of the prime newspapers of the city. Inox –“Live The Movie” experience is also emphasized for brand building perspective. For megamovies, the dresscodeof the employees at refuel counter and ushers are at times changed to bear movie promos and movie special prints are made on popcorn boxes, stalls at lobby etc.

 Controlling Cost A special emphasis is given on controlling costs at the Operating Units, without sacrificing on service delivery orsafety. They have a tight budgetary control system for monitoring and controlling costs across all operating units. The same are also reviewed on a monthly basis by an Audit Committee of the Board. 

Set new standards in customer service

Aim is to give patrons a great experience. The first thing they aim at is accessibility. They have initiated a ticket on phone service where tickets are delivered to customers upon phone booking. They have also initiated SMS bookings and internet bookings. Ushers and employees at ticket counters and gates are trained on soft skills by professional organizations to ensure standardization and high level of customer service satisfaction.

 Increasing Customer Loyalty Through soft skill training of staff, clean hygienic ambience, variety of F&B items available, accessibility through phone,SMS, internet and ticket counters.

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 Value Added Services SMS, internet bookings, telebooking and home delivery, Presence and accessibility of duty mangers. Highly clean andhygienic environment and emphasis on fire and life safety . Also they partner with contest2win and mouthshut.com wherethey speak to two million customer base through their website.

KEY FUNCTIONAL AREAS  Programming Programming is one of the most important departments in any film exhibition business. The programming department isresponsible for the regular supply of films to all our screens. The main objective of the programming department is to source the right films for the right market (based on thorough analysis of the profile of the market), at the most competitive terms, and screen the films in a manner and at the show that enables maximization of revenues from each film. Programming, or sourcing of content is a centralized function. However, decisions on programming are taken at the Corporate Office based on inputs from heads of respective multiplexes, in respect of local factors including tastes and preferences of the patrons in the areas where the cinemas are based.

 Operations This department takes care of the day to day operations of the multiplex and ensures its complete compliance with the highest standards service, comfort and safety. The key responsibilities of this department include ensuring the patrons are provided with the highest standards of friendly and proficient service, in an environment that provides a high degree of comfort, pleasure, sanitation and hygiene, and with fully regard to all norms of safety against hazards of fire, etc. Each of the multiplex operates as an independent Operating Unit, headed by a General Manager. The teams in each of our Operating Units report to the General Manager of the Operating Unit. The function of various departments in an Operating Unit can be broadly classified as under:  Box office and Tele-Sales: All the multiplexes provide a single window service for sale of tickets with a totally computerized and networked environment through highly customized software, catering to multiple choice of screens and movies. Box office sales are supported by a Tele-Sales team that not only provides the patrons the ability to book tickets from comfort of their homes, but also provide information for all movie related queries. Patrons also book tickets through the SMS and Internet route 95

 Concessions: The concession / candy / snack bar is called Refuel. Refuel follows the station concept with multiple counters offering all products, emphasizing speed, efficiency and courtesy of service. Refuel also features modern touch-screen computer terminals, networked with our integrated box office software, thus reducing transaction time and queuing. While popcorn and aerated waters (like colas) remain the focus of concession stands, they have also been successful intaking cinema snacks to a higher level, by offering pre-packed items, like sandwiches, samosas, puffs, etc. to encourage impulse buying.  Ushering: This department handles the challenging task of coordinating the movement of patrons within the cinema and in multiple auditoriums in the multiplex in an efficient and friendly way.  HR &Training: This department services the needs of the Operating Units for all matters relating to human resource and training. One of the key strengths of the employee is the high level of training where HR department has been successful in setting an industry standard.  Projection and Engineering: This department is responsible to ensure maximum uptime for all cinema equipment, and a high quality, comfortable and safe movie viewing experience, by ensuring preventive and breakdown maintenance of allequipments pertaining to projection, sound, air-conditioning, safety, etc.  Finance: This department ensures an accurate capturing of revenues, booking of costs, safeguarding of assets, and ensuring proper controls and documentation for inhouse and statutory compliance.  Housekeeping: This department is directly responsible for the hygiene, upkeep and maintenance of the multiplex. This department plays a key role in ensuring that Operating Units are known for their superior upkeep and maintenance. This department is outsourced.  The operations department is also responsible for implementing standard operating procedures, ensuring that patrons get the same high quality of service and amenities across all Operating Units in India.

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 Marketing Marketing department is responsible for extending, formulating and maintaining the position of the brand. In addition, themarketing department is the interface for patrons. It organizes promotions, events, campaigns and contests to attract patrons tothe multiplexes. It is also responsible for branding alliances, and meeting advertising revenue targets.The department consists of a Vice President at the Corporate Office who is assisted by the marketing manager of each Operating Unit and a central team comprising of brand manager, promotion manager and manager for alliances. A head of public relation (“PR”) handling corporate communications and PR of all Operating Units is also part of the team. Each of the marketing managers in the Operating Units is assisted by a marketing executive and in some Operating Units also a PR executive. They get associated with known PR agencies to assist them in PR for launch of various properties. It helps us in getting good mediamileage during the time of the launch.

The department’s goal is to present the brand as the finest in the exhibition industry. Their slogan ‘Live the Movie’ demonstrates thatthey are dedicated to provide a holistic entertainment experience to our patrons. Other medium to attract audiences to the multiplex are direct mailers, newspaper advertisements, internet, outdoors, radio and alliances with brands In addition the following marketing tools are used to create awareness amongst the patrons:  Loyalty Clubs They identify premium and frequent customers through feedback forms and data generated from contest forms. This database has more than 25000 members across India. They are planning to start a loyalty program to reward customers with certain privileges like invitations to premiers, special events etc.  Promotions The presence of tenants within the mall, with good brand value, enables them to conduct joint promotions with the other tenants and increase footfalls. They also do movie promotions with specific big movies – Hollywood and Bollywood, where they offer to the patrons various gifts like movie merchandise, invites to premier and tickets to the movies. This is promoted in house and through the various FM radio channels.

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We also house various festivals in different cities like Pune International Film Festival, International Film Festival of India in Goaand Asian Film Festival in Mumbai.  Star Visits The purpose of celebrity visits is to make the movie experience memorable as the patrons interact with their favoritestars thereby attracting crowd and increase box office collections. We have had Aamir Khan, John Abraham, Anil Kapoor, Esha Deol,Hema Malini, Pooja Bhatt, Vikram Bhatt, Vivek Oberoi, Kim Sharma, Jimmy Shergill and several other stars, visited our multiplexes. We also get cricketers/ famous sports personalities and other well-known personalities visiting our multiplexes.

BUSINESS MODEL  Patrons’ Spends: A patron is a customer who visits the theatre. A patron spends on tickets, parking if applicable and F&B (together called average Spend per head). Our revenue from patrons is a direct function of number of patrons and Spend per head.  Number of patrons It is the number of patrons coming to the theatre. It’s a product of occupancy, number of seats available and number of shows. The following table and chart depict the growth in our quarterly number of patrons.  Average Ticket Price (ATP) ATP is defined as the gross ticket sales divided by the total tickets sold in a day. Over a period of time we have been successful in steadily but moderately increasing our ticket prices confirming that the patron is willing to pay a reasonable premium for a superior world class movie viewing experience.  Food & Beverages(F&B) We normally have a good mix of F&B to enhance our patron experience and Spend per head. These are fast food in natureand having high margins.

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 Advertising: A multiplex offers advertisers a great opportunity to capture the attention of more than 4000 patrons per day. Advertising opportunities in a multiplex include on-screen advertising, posters inside the theatre, promotional stalls, etc. Some of the key advertisers who have used multiplexes for advertising opportunities include Kingfisher, Airtel, Hutch, Maruti, Hyundai, etc. They also have allowed various entities to use a part of lobby space at times to give the patrons a ‘movie plus’ experience.This happens through sale of movie based merchandise. Such partners pay a fixed sum or percentage of their sales. Some ofthe partners who have worked with INOX - Yummy Tummy, Crazy Corn, Coca-Cola, Mamamia Icecream, Act II, etc.

 Conducting Fee Wherever the premise belongs to INOX and a larger mall has been developed, they lease out the retail space to various popular retail players such as Mc Donald, Pantaloon etc on a business conducting agreement. They receive Conducting Fee from such retail partners as our income. This is currently applicable to the Pune Multiplex and Vadodara Multiplex.

 Management Fee:  F&B Cost This is the cost that they incur in sourcing various food and beverages from vendors. This is usually a direct function of our F&B revenues.  Entertainment Tax Entertainment tax represents the tax payable on the box office collections. This usually is a key component of cost, except in cases where the multiplex enjoys a concessional tax regime due to a tax exemption policy. Many States have, in order to encourage the growth of this industry, announced an entertainment tax policy, which grants exemptions to multiplexes, subject to fulfillment of certain conditions .Most of the Operating Units currently enjoy an entertainment tax exemption. Such exemption, where available, directly adds to profits.

 Personnel costs Personnel cost includes salaries and other cost associated with employees and other recruits at each Operating Unit. This also includes the cost of training required to deliver the high levels of service.

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 Operating costs  Property Rentals Where are Operating Units are not owned, property rentals are a key element of cost. Such rentals are typically negotiated with the property developer at a fairly early stage of the property development. Typically, these are structured as long term leases, where they pay a monthly rental to the property developer. Usually, multiplex rentals are lower than normal rentals for retail space, since multiplexes are considered to be “anchor tenants” due to the footfalls that multiplexes attract to the retail development.  Utilities The major cost here is the electricity cost used for running air-conditioners, lighting, etc at the Operating Units. This also includes municipal charges for water.  Marketing Cost This includes spends on newspaper advertising, hoardings, posters, and the related creative cost.

Graph 36: Business Model

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Graph 37: Income Mix

Graph 38 : Total Income

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Graph 39: Cost Mix

Graph 40: Total no. of patrons

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 Summary Inox backed by best picture and sound quality , overall facilities , shopping and restaurants , easy access , reasonable prices and good staff behavior emerged as a clear winner amongst all the multiplexes of Vadodara , namely PVR , Chandan and Fame . Known for having premium segment customers INOX really lives up to the hype and public image created by the company. But it still has to improve its ticket booking facilities. Multiplexes are known for attracting large no. of footfalls especially youth who have disposable income to spend on entertainment, shopping, recreation and food . Mostly students visit these multiplexes on a monthly basis. Female patrons although less in no. spend more. Similarly businessmen although visiting these multiplexes rarely spend lavishly on themselves and family . There is a huge demand for a Drive-in theatre in Vadodara . Respondents feel its still early to rule out single screens as they serve lower income classes .

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CONCLUSION

Multiplex, in India, is the new business model for the film exhibition industry. It is transforming movie viewing habits in India. It is set to take over a significant slice of the entertainment market of India. Today multiplexes constitute just 1% of the total number of cinema halls, and 45% of the total screens in India. The industry experts believe that it is beginning of the end of single screens in India as the multiplexes with certain advantages such as multi-screen potential, flexibility in operations; scope for other commercial viability will rule movie exhibition business in Indian film exhibition industry . The multiplexes enjoys rebates and exemptions Single Screen doesn’t enjoy such exemptions from the government.(Entertainment Tax) on part of government. They just don’t offer movie but also offer so Talking of the ambience, multiplex offer better Single screens on the other hand don’t offer sitting , Dolby digital sounds and good such facilities to view graphics for viewers . Multiplexes, by offering food courts, ATM etc . The mushrooming of multiplexes has thrown up huge competition amongst multiplexes and is giving the stand-alone theatres a run for their money. However, multiplex owners are still upbeat about their business. “In India, we had 3,100 million admissions last year and only 12 screens per million. So there is a huge potential for growth”. The road ahead for theatre owners is both exciting and challenging. “The service industry is ever changing and you have to change proactively”.

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LIMITATIONS  This study is purely based on the responses received from the respondents.  Since we are not the authorized researchers so this study is made keeping in view utmost cost effectiveness.  This study is done in a limited time span  The study focuses on the youth segment of the population  The Research study would mainly be undertaken based on collection of primary data and information mainly from urban population, it would be inappropriate to generalize it as fit and good for the whole population.  The Research Study shall be mainly carried out in the Vadodara city in the State of Gujarat; hence this research work does not aim to cover the opinion of all the consumers’ of particular brand of multiplex located in a different city of Gujarat .  Findings can be applied to only select sample size and care must be taken while applying to the other group of consumers’.

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QUESTIONNAIRE Dear Sir / Madam: I am Shivang Kalambekar student of 6th sem. of BBA (Marketing) from maharaja sayajirao university of Baroda, conducting a War of the multiplexes – A Customer Satisfaction & Customer Preference Survey on Multiplexes in Vadodara. This questionnaire is part of a research study being conducted by me. The aim of the study is to understand the consumers’ perception towards the multiplexes and to forecast the future of multiplexes in ‘B’ grade city like Vadodara. Any information provided would be used only for academic purpose and kept confidential.

I.

Personal profile:

1. Name of Respondent:-

2. Age:-

   

Below 18 years 19-30 years 31-50 years 51 years & above

3. Gender :-

 

Male Female

4. Occupation:-

   

Student Service business housewife

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II.

Research questions :-

5. Do you prefer to watch a movie in a Multiplex Theatre? a. Yes

b. No

6. Please rank the reasons for your choice ( 5 being most important , 1 being least ) f. Better sound and picture quality g. Comfort h. Value for money i. Status symbol j. Ticket prices

7. How often do you visit a Multiplex? ( Choose Any 1 Option ) f. Weekly g. Twice a month h. Monthly i. Twice a year j. Yearly

8. What is your monthly expenditure on movies ? (Choose Any 1 Option) a. b. c. d. e. f.

< 100 100 – 300 300 – 500 500 – 700 700 – 1000 > 1000

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9. Rank the multiplexes in descending order ( 4 being favorite , 1 being least )

XV.

XVI.

XVII.

XVIII.

XIX.

XX.

Characteristic Picture and sound Quality

Chandan

Fame

Inox

PVR

Seat comfort

Air conditioning

Food and refreshments

Washroom facility

Drinking water facility

XXI.

Staff behavior

XXII.

Gaming zone

XXIII.

Ticket booking facilities

XXIV.

Shopping experience

XXV.

Security arrangement

XXVI.

Parking facility

XXVII.

Value for money

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XXVIII.

Overall Ambience

10. Which is your most preferred Multiplex in Vadodara? (Choose Any 1 Option) Chandan

Fame

Inox

PVR

11. Your suggestions (Choose Any 1 Option for each attribute ) Attribute

Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

Reduction in ticket prices More offers and discounts Ticket booking convenience Reduction in prices of refreshments

12. Which is the Multiplex which has given you highest overall satisfaction ? Chandan

Fame

Inox

PVR

13. The reasons for your choice (Choose Any 1 Option for each attribute) Attribute

Highly Satisfied

Satisfied

Neutral

Dissatisfied

Highly Dissatisfied

Overall Entertainment Physical facilities

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Service provided by staff

14. Do you think there is a need for a Drive – In theatre in Vadodara?( Choose Any 1 Option ) Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

15. Do you think single screen theatres have come to their end ? (Choose Any 1 Option ) Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

16. Do multiplexes have a bright future in India? ( Choose Any 1 Option ) Strongly Agree

Agree

Don’t Know

Disagree

Strongly Disagree

-:THANK YOU FOR RESPONDING:-

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BIBLOGRAPHY

        

www.inox.com www.marketingabout.com www.docstoc.com www.authorstream.com Media and entertainment Industry Report 2005 , FICCI Media and entertainment Industry Report 2005 INOX Annual Report , 2007 www.researchonindia.com Fame Presentation

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