PRICING STRATEGIES- ENTERTAINMENT INDUSTRY

PRICING STRATEGIES- ENTERTAINMENT INDUSTRY

BY GROUP-8

PVR CINEMAS

Priya village road show, popularly known as PVR is the pioneer in establishing the theater system in India. PVR started its operations in the year 1998 and redefined the way movie service provided in India. It is the first Indian company that corporatized the theater system. Till then theaters were owned by the individuals.PVR knew that establishing multiplexes alone cannot help it to expand. Therefore it started an innovative idea of holding the theaters and screens.

PRIMARY OBJECTIVE:

Pricing a movie ticket is a complex issue. PVR believed in providing high quality movie experience at an affordable price. Its objectives:

1. Increase profits.

2. Attract new customers.

3. Maintain current customers.

4. Increase profit per customer.

5. Generate cash.

6. Improve ROI.

ANALYSE COMPETITORS PRICE MIX:

We have compared PVR's pricing strategies with other multiplexes. In multiplexes, tickets are priced depending on perceptions such as brand value of movies. While in PVR, lifestyle concepts like Gold Class where tickets are priced at Rs. 500 because benefits include ultra-reclining seats in addition to exclusive butler services. The price quoted by PVR on weekends and on weekdays clearly depicts that it is targeting high earning people as they can afford such prices on weekends.. and on the other hand that is on weekdays it is targeting students, low income people, retired people

PRICING METHOD:

Skimming Pricing Method & Penetrating Pricing Method:

The pricing strategy adopted here is a skimming price stratgey. PVR had a clear cut picture of what kind of services to be provided to customers. Since they had a unique way of interaction with their customers, they had to incur heavy costs in implementing this stratgey of high price. So, its worth paying such price for tickets in PVR.The pricing strategy adopted by PVR is skimming the market on weekends and penetrating the market on weekdays.

SELECT FINAL PRICE:

PVR restructured its business model and divided its services into PVR premier and PVR theater. The comfort and hospitality provided in these two formats vary. PVR Forum Mall Theater in Bangalore divided its theater into three divisions. They are; classic, Europa and gold class. The prices of the ticket of these three categories on weekends are Rs 200, Rs350 and Rs 500 respectively for Hindi and English movies. The price per ticket for the Kannada movies varies as the company gets tax sops from the Karnataka government. It charges Rs 80 to Rs 150. The price of the ticket in the weekdays will vary in the classic and Europa sections to attract more number of consumers. The price of the gold class remains same. The company realized that numbers of movie goers in the morning are less. It reduced the price of classic and Europa to Rs 80 till 12 noon on weekdays where as gold class price remains as it is. The gold class price is having two components. Out of Rs 500 charged Rs 350 is considered as movie ticket price and Rs 150 is used to provide snacks to the consumers.