Case Study-Cineplex Entertainment The Loyalty Program
After reviewing the case, respond to the following questions:
1. Aside from gaining the CRM benefits, what would Lewthwaite like to achieve with respect to the 5.3 million unique visitors, their 7.5 average annual visits and their spending? Do you agree with segmentation by age and the purported movie-going behavior?
2. How might the reward programs described in case Exhibit 5 affect the movie and event-going behavior of the market segments? At retail value, what is the proposed average value of each reward structure for customer’s dollars spent – approximately 5 percent, 10 percent, 15 percent, or 20 percent of regular prices? Which reward structure would you choose? Why? For the sake of simplicity, ignore any one-time fees or rewards.
3. What is the likely increase in Cineplex Entertainment’s revenue from your proposed incentive program – 0 percent, 5 percent, 10 percent, 15 percent, or 20 percent? What would be the varying financial consequences for Cineplex Entertainment? Would you proceed with the reward program?
4. Would you develop the reward program alone? Would you partner with FlightMiles or partner with Scotiabank? Why?
5. What marketing communications campaign should Lewthwaite employ? What specific spending of her $300,000 would you advise? Should the launch be rolled out regionally or nationally.
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Cineplex entertainment was opened in 1979 under the Cineplex Odeon name as a small chain of movie theatres and merged with Galaxy Entertainment Inc. In 2006 Sarah Lewthwaite, the marketing director of Cineplex entertainment was approached by the CEO to resume development of a Loyalty program following inconsistent in revenue, and there was thus a great need to stabilise them. The focus was the program was through age segmentations such as the teenagers, youth the young families. Sarah would achieve this strategy under several circumstances such as through the internal development giving the organization full control while fully been exposed to the financial risk with a cost of $ 5.5 M in the first year while the prices were expected to diminish in the consecutive years. Other alternatives that the company had been the Flight Miles and the Scotia bank proposals (Kumar, 2012). Which would provide the company broad access to data at relatively lower costs? The focus of the paper is on the best alternative options that would have given the organization the most desirable results. A successful loyalty programme is one that fit Cineplex overall business strategy focusing on expanding beyond a marketing plan into the plans of each. (1683words)