Cineplex Entertainment: The Loyalty Program

Abhishek, Krutarth, Arvind, Ashish

Business Environment Analysis

 It offers an exceptional entertainment experience

 Merged with Galaxy Entertainment in 2003
 Acquired Famous Players in 2005, became Canada’s largest film exhibitor
 Approximately 40 million visits per year
 It offers food from various brands
 It provide Live Events such as hockey, wrestling an opera
 Strengths  Weaknesses
o Largest exhibitor of 3D and o Red tape culture
IMAX projections o Traffic congestion
o More than 125 theatres, and o Initial cost is high
1300 screens
o Unique experience
 Opportunity  Threats
o Changing trends among the o Success depends upon the type
customers of movies
o No other outdoor movie o Increase in taxes
cinemas in the vicinity o Alternate sources of
o Loyalty programs entertainment
o Local authority restrictions

Issues

 A loyalty program that can satisfy the executive’s expectations.

 Which loyalty program to choose?
 Scotiabank Proposal
o One of the biggest bank in Canada, 950 branches, 6.8 million
customers
o Can’t access the individual-level banking info
o Proposed 50-50 cost sharing
o Wants naming rights on 3 major theatres and bank machines in all
Cineplex theatres
o 3 card reward strategy
 Internal Development
o Develop and operate the program
o Can have complete control over the program and data
o Initial cost would be $5.5 million
o Financial risk of unredeemed points
o New department would need to be created
 o A database will be required and could take several years
o Several committee members are willing for it
 Flight Miles Partnership
o 72% of Canadian households as active members
o Can increase youth membership
o Yearly fee can cost $5 million and $0.09 for each point issued
o Have to pay every time to access the data
o Exit barrier is very high
o Flight Miles offered $250000 in contribution

 How should the rewards be structured and promoted?

 What should be the campaign?
 How to launch the campaign?

Solution

 Cineplex should choose Scotiabank for the loyalty program

 This will increase the organization’s reach to the public
 The cost incurred will decrease yearly
 It will increase the brand esteem
 The campaign should be in theatres and bank branches
 There is no cost on in-theatre ads and bank branches ads