Strategic Marketing Plan for Reading Cinemas Essay
The view for the marketing plan had to be hanged and instead would now support a company-wide view. After the view change, a concise market analysis was taken out on Reading International and summarized in this report using examples from the original Reading Courtesan analysis. This is to define who the company is and where they are currently in the market place. The Strategic Plan is next to define where the company wants to be and how it can get there. Objectives and Priorities are first stated in order to give executive management a clear direction upon which they will be taking.
Each objective is to act as some sort of step which once achieved, brings the company loser to its ultimate goal; strengthening competitive position. The Strategic Plan covers how Reading International; needs to discover more about consumers in the market place, diagnose the situation of the internet, look towards changing the current attack strategy, developing and implementing a virtual environment, constructing a full three to five year timetable explaining at what point each objective is achieved, and also how the company is to measure whether the plan has been an overall success.
Costs and revenues have been roughly calculated to
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The important view change is firstly discussed and Justified to then reveal what problems and opportunities Reading International faces eve the next three to five years. Objectives and priorities are then set out based upon what Strategic Marketing Plan for Reading Cinemas By straitjacket was discovered trot the analysis. The strategic plan is then relayed tort the client which all in all will tell them, where the company wants to be and how it can do it.
The plan will be summarized with several key recommendations executive management must take away with them to ensure that the competitive position of the company is strengthened. New Analysis Prior to this report, the focus for the Strategic Plan was centered on Reading Courtesan but has now been drawn to Reading International as a whole company instead. This is due to the discovery of several key issues found upon further research after the Market Analysis on Reading Courtesan had been conducted.
Because of this change, a new concise analysis has been taken out on Reading International which will include examples from the original analysis. In doing so, it will explain exactly why the focus has changed whilst also portraying where Reading International sits in the global market place. This will provide a better understanding of the company for executive management. For the context of this report, a summary of this combined analysis has been included which recognizes the key issues that the many faces over the next 3-5 years.
The findings revealed who this company is and where they sit in the market. In terms of whom, Reading International is a large cinema company originating from the United States. The company occupies 56 cinemas across the United States, Australia and New Zealand (Reading International, 2013). The company also has a large focus towards the development, ownership and the operation of commercial real estate which makes up Reading Internationally second business segment.
Worldwide, Reading International resides nearly 4 million square feet of land and buildings (Reading International, 2013). Looking at where the company is in the market place, the cinema exhibition business segment has reached maturity (Reading International, 2013). Reading International will be looking towards improving their current cinemas to achieve more growth as well as developing niche- type of cinemas in selected markets and also procuring additional properties that contain existing cinemas. The objective behind these strategies is to attract more customers.
Currently, Reading International targets several key groups of consumers by running various promotions across each country; school children are targeted tit the ‘Early Bird’ promotion, students are targeted with ‘Terrific Tuesday, working professionals with ‘Friday Flicks’, couples with ‘Steer & Beer’ restaurant ‘combo’ deals, families with ‘Spit the Dummy, elderly with senior discounts, and general movie enthusiasts can sign up for the ‘Reel Club’. It appears that these consumers have been segmented on the basis of demographic grouping.
What Reading International needs to be aware of however, is that there is a whole new generation of consumers that will have an effect upon how Riding Internationally customers should be roped over the next couple of years. This generation is known as the Net- Generation (N-Gene), and should become a large focus for Reading International to target (Taproots, 1998). Consumers of the N-Gene can be described as any person born after 1982 and have been brought up using technology (How Stuff Works, 2013).
Even though some of these consumers were born in the sass’s, the generation had to have two or three decades before it could fully begin to blossom as a group of consumers. Today, there are over 80 million of these consumers recorded in Just the United States alone (Lewis, 2001). Looking into the future three to five years from now, there will be an extensive number more to these consumers demanding more and more from the technological market. Marketers will have to work hard to keep up and learn fast as like Reed (2010), states, ‘Digital technologies have changed the rules of the game’.
With having conducted a specific customer analysis, the issue of competitors can now be observed. From the original analysis, competitors for Reading International were discovered. They are; other competing cinemas, substitutes of entertainment and the Internet. It was the combination of this discovery and closer investigation which sparked the need to change the focus of the Strategic Plan from Reading Courtesan to Reading International. The Internet has proven to be the biggest competitor for not only Reading International, but the industry at large.
Research suggests that the Internet is Jeopardizing the future market for cinema and media alike (The Guardian, 2013). This is because consumers are exposed to such vast options of online entertainment, an enormous variety of information/visual mediums and relatively low costs to attain all of these. The cinema industry is finding it difficult to break through the clutter. Executive top-down planning is going to be required in an attempt to overcome the threat that the Internet poses to the industry. It is at this point, that problems and opportunities can be drawn from the analysis.
The first problem for Reading International is the changing characteristics of consumers. The rise of N-Gene will require Reading International to change their segmenting tools and promotional efforts in order to more efficiently attract these consumers. The second problem is that the Internet is negatively affecting the market or cinema. Reading International, along with the industry, currently uses a defensive strategy against the Internet by simply making films longer and louder in a desperate plea to ‘compel’ consumers’ attention (Lewis, 2001).
Reading International needs to rapidly realize that the expiration of film is near and technological substitutes are imminent, more specifically digital film (Lewis, 2001). If Reading International does not quickly realize how the environment is changing, then the company’s competitive position in the market place will begin to weaken. Opportunities that have presented wrought this process is that as part of Readings growth strategy, many of the company’s cinemas will be redeveloped and refurbished.
This will give the company a chance to upgrade any technological changes that become apparent over the next three to five years. Looking back to the original analysis of Reading Courtesan, it was discovered that that particular cinema would be undergoing a large $20 million redevelopment beginning in 2014. This is an example of what executive management are prepared for and planning to do to other cinemas around the world. Objectives and priorities Objectives and priorities have resulted from the analysis summary in which Reading International must turn their attention towards.
It is important for the company to have these points clearly stated. In doing so, it will give executive management a distinct path and direction that they need to take over the next three to five years. Each objective should be considered as one small step on a staircase, each leading to the ultimate goal of strengthening Reading Internationally competitive position within the market place. 1. Conduct an analysis on N-Gene to find out what their interests are and how they relate to cinema 2.
Find out which specific areas in the company the Internet is negatively attesting the most 3 Revise Reading Internationally current strategy and deliberate whether the current full frontal attack is worth keeping. 4. Come up with an idea which will counter these problems. 5. Develop an implementation plan for the idea 6. Research the changing market so when the idea is ready to be released, marketers will know the best way to market it 7. Construct, implement and monitor the idea 8. Strengthen competitive position These objectives are based in a timely sequence for Reading International to achieve ever the next three to five years.
The Strategic Plan will describe how these objectives will be allocated over the timeshare. Over the course of this timeshare, the main priority for Reading International is to maintain its current position in the market place. Up until the time that the new idea is introduced, Reading should continue to run current promotions pursuing current target markets. According to a report from Reading International, the company will continue to maintain a steady flow of customers to the time of implementation (Reading International, 2013) Strategy addressing these priorities
Following on from the objectives and priorities, the strategic plan for the next three to five years can be outlined. The first objective the company needs to achieve is to grasp a good understanding of the current consumer market and how it is changing. This is an important step to take as it is the customers whom are a resource upon which the success of the business is determined (Business Case Studies, (2013). Currently, Reading International does not know who their customers are well enough yet.
As discussed in previous sections, N-Gene is a growing group of consumers that Reading International needs to target more. They need to find out more about who these consumers are and how their interests relate to cinema. By doing this, Reading International will understand in more depth how they can specifically target this group of consumers. As the research suggests currently, Reading International may need to employ new technology and gadgets which this target market currently don’t have in order to entice them through Readings doors.
This consumer analysis will be conducted over the first five months of the project beginning. Taking the second step, Reading International needs to identify the worst areas damaged by the Internet. If the company knows what the Internet is affecting the most, then it can put more effort towards building these areas back up to strengthen its competitive position. Upon observation so far, it appears that it is the issue of piracy and lack of interactivity that is affecting not only Reading International, but the whole industry.
Studios now have to release films to theatres and the Internet on the same day so as to counter piracy (Film Connection Film Institute, 2013). However, this negatively affects the theatre industry as consumers download new releases off the Internet instead of going to watch it in a cinema. The cinemas have lost exclusiveness. Lack of interactivity refers to level of which media can engage their audience in. Television and film are described as being passive forms of entertainment (Taproots, 1998). The modern consumer, N-Gene, is an active receptor of information.
With any new media device, it requires the user’s full attention, concentration and participation to operate it. The general trend is suggesting that the more interactive a media device is, then the more the modern consumer will enjoy it (Taproots, 1 8) An Internet analysis will e conducted over the same five months as the first objective, however by a different team. The third step Reading International must take towards strengthening their competitive position is to revise their current strategy. Is this full frontal attack strategy really enhancing their position or Just maintaining it?
Like mentioned earlier, cinemas are making movies longer and louder to try and attract customers. Whoever has the loudest speakers seemingly is meant to get the most customers. However, all that this is doing is increasing hyper-competition within the cinema industry. Each enema is trying to quickly undertake competitive moves when the market is fluctuating yet any competitive advantage gained is relatively short lived (Reed, 2010). This gives Reading International a clear Justification as to why they need to review this strategy.
A flank attack approach should be firstly adopted to counter the Internet instead of barging it. Reading International should also look into co- petition. This term can be described as mixing both competition with cooperation in an attempt to strive for a higher value of creation as opposed to what would have been redeemed without the interaction (Reed, 2010). Reading International should create alliances with other cinema companies throughout the United States, Australia and New Zealand. These cinema companies could work together to all counter the effects that the Internet is having on the industry.
This objective will take approximately one month to achieve. As it is Just the strategy being revised and no cinema relationships being made, this objective will be achieved rapidly. The fourth objective is the point at which the fundamental idea comes from. The key points drawn from the problems so far is that the N-Gene consumers are very technologically pave, the media they like is interactive, and to beat the Internet, Reading International needs to provide consumers with something that the Internet cannot.
To help with this, Reading International could form alliances with other similar cinemas to create co-petition as Just discussed. This new product that Reading International will adopt is a virtual environment. Customers would wear a headset whilst watching a movie which would give them the effect of being inside the movie as if it was reality. One might contemplate that AD already does this, however a virtual environment is very different. D films make only parts of the movie come alive which appear to be coming out of the screen.
A virtual environment is far more interactive as it pulls the customer into the movie. They will have the feeling of being taken out of their seat and into the action. The Internet does not yet have this and it would also appeal to consumers of N-Gene. If Reading International could be the first cinema to implement such a thing, along with its alliances, then they would be the only cinemas on earth to have such a product. The fifth step is the most demanding objective for Reading International to achieve. So far, each objective has been given a time frame that it must be achieved within.
This step is to create a plan to incorporate the rest of the objectives over the three to five years in which the virtual environment is meant to be implemented within. So far, six months have been occupied already with the first four objectives. Over the next 12 months, Reading International will achieve three things. Firstly, Reading International needs to create an alliance with Hoots Cinema. This cinema has been selected on the basis that it occupies the same countries as Reading International, it is a similar to that of Reading International and boot to these cinemas are tierce competitors to each other (Hoots, 2013).
By doing this, it will create a stronger force against the Internet and give Reading International resource aid to fund the development of the virtual environment. Secondly, a vendor needs to be selected for the development of the technology. If this vendor agrees, it is advisable that Reading International and Hoots to use ‘Culls’ as the main developer of this virtual environment. This is because Culls has created a similar product for the gaming industry which has proven to be a large success (Forbes, 2013). It is an experienced and successful company in this domain.
Thirdly, the cinemas need to acquire the resources to fund the project. As discovered in the analysis, Reading International has a large collection of real estate assets in which they would consider selling some of to gain resources which would be used to improve the overall company. In total, Culls cost $16 million to build (Forbes, 2013). It would cost Culls a similar amount to create a cinema virtual environment which would mean that each cinema needs to acquire $8 million each for this investment. Reading International could produce this amount through the ale of land.
Next on the timeline is 18 months scheduled for the virtual environment to be developed. This is very much over to Culls to complete which gives Reading Internationally marketers a chance to review the market. By now, it should be clear how beneficial the web is for a marketer. A problem of this however is that old marketing conventions are still being used over this new medium (Scott, 2011). Because Reading International will be targeting consumers of the N-Gene more through the implementation of the virtual reality, they need to know how to effectively communicate with them.
Once the analysis has been conducted within the first five months of the project beginning, marketers could find out what types of media these consumers respond to mostly. For instance, if the analysis reveals that N-Gene consumers use social networking as a common method of communication, then Reading International could look towards setting up a Backbone page for the launch of this new product. This would attract the interest of these consumers and potentially spark communication about the product. The marketers will phase out the full frontal attack strategy over the 18 months and slowly diffuse in this flank attack.
By doing this, it will maintain Reading Internationally competitive position but also strengthen it at the same time. Three years would have passed and the virtual environment will be ready to implement within some cinemas. The implementation phase will take approximately 12 months. Because Reading International will have a large focus on the refurbishment of current cinemas over the next several years, it provides an opportunity for the virtual environment to be implemented at the same time in these cinemas.
As an example, It was found from the original analysis on Reading Courtesan that this cinema was to receive a major refurbishment finishing in 201 5 (Stuff, 2013). The new cinema will need be refitted with technology that supports the virtual environment. Over the final year of the project’s scope, Reading International will need to monitor how the virtual environment affects the business and the Internet to determine whether it would be a success.
Marketers need to look at trends specifically in the area of whether total customers have increased, who is coming to the cinema, how many people choose to watch movies with the virtual environment, and ultimately how the Internet has been affected by the virtual environment (level to movie downloads in comparison to past year) . Marketers will also need to monitor how current customers are affected by the virtual reality and whether they would use it. In terms of how much will the cinema make, this can be estimated roughly using a simple calculation.
According to an on-line article, the average New Zealand goes to the movies 3. 2 times a year (Stuff, 2013). If this were to increase by 1 because of the virtual environment, at an average price of $15 a ickiest by the total number of New Slanderer (4. 5 million according to the official New Zealand statistics website (2013)), revenue would be $283,500,000 for one year. This figure should only be used as a guideline however as the calculation was Just within New Sealant’s market and it assumed that virtual environment only increased current customers’ number of viewing times per year.
Conclusions and Recommendations This report has developed a strategic plan for Reading International to undertake over the next three to five years which will strengthen the company’s competitive position within the market place. A market analysis was firstly taken out on the company to reveal who the company was, and where it was in the market. From this analysis, it was found that the company faced two main problems and one main opportunity. The first problem was that the consumer market was changing yet Reading International had done nothing to investigate what was happening.
The second problem was that the Internet was ruining the market for cinema. It had become such an enormous problem which was the issue needed to be taken from a company-wide view. Objectives and priorities were laid out for the company to follow ever the next three to five years. Each objective was ultimately working towards the goal of strengthening Reading Internationally competitive position. The strategy plan revealed that a virtual environment was to tackle the issue of the Internet and keep this competitor at bay for some time whilst also attracting customers Reading International currently was not targeting.