SAINTGITS INSTITUTE OF MANAGEMENT

MARKETING MANAGEMENT I
PROJECT – PHASE I

MARKETING ENVIRONMENT
-PVR CINEMAS

Submitted to:
Dr. Thomas Varghese
Professor and Associate Dean
Saintgits Institute of Management

Submitted by:
Lakshmi Balakrishnan
Keerthana S
MBA (Div. – A) - 2019-21

Date of submission: 13th December, 2019

ENTERTAINMENT INDUSTRY

The entertainment industry (informally known as show business or show biz) is part of
the tertiary sector of the economy and includes many sub-industries devoted to entertainment.
However, the term is often used in the mass media to describe the mass media companies that
control the distribution and manufacture of mass media entertainment. In the popular parlance,
the term show biz in particular connotes the commercially popular performing arts,
especially musical theatre, vaudeville, comedy, film, fun and music. It applies to every aspect
of entertainment including cinema, television, radio, theatre and music.
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and
is making high growth strides. Proving its resilience to the world, the Indian M&E industry is
on the cusp of a strong phase of growth, backed by rising consumer demand and improving
advertising revenues. The industry has been largely driven by increasing digitisation and
higher internet usage over the last decade. Internet has almost become a mainstream media for
entertainment for most of the people.
Indian film industry over the past few years has been receptive towards foreign investments.
This has paved way for many international production firms to make their debut in Bollywood
along with opening their offices in the country. As per FICCI-KPMG report, Indian film
industry is worth US$ 2.11 billion and is likely to witness a 9.1% growth till 2013.
World's largest film industry in terms of production volume is undergoing a massive
international presence with Reliance ADA Group signing a production pact with DreamWorks
Studios, endorsed by Steven Speilberg, a well-known Hollywood director, to produce movies
with the preliminary investment of US$ 825 million.

Following the lines, Yash Raj Films has signed joint partnerships with Walt Disney, to produce
animated films. Other such east meets west stories include, Sippys' film projects being
sponsored by Warner Group, Sanjay Leela Bansali Films' collaboration with Sony Pictures
Entertainment and TV 18's association with Viacom to form Viacom – 18.
Adlabs has emerged as the only movie chain in India providing 3D and 6D formats and PVR
is all set to infuse around US$ 52.2 million to grow its film production and bowling trade in
India.
The Indian film industry consists of mainly 3 parts:
 Film production
 Film distribution
 Film exhibition
PVR CINEMAS

PVR Cinemas is a film entertainment public ltd company in India. The company began as a
joint venture agreement between Priya Exhibitors Private Limited and Village
Roadshow Limited in 1995 with 60:40 ratio, began its commercial operations in June 1997.
The company is founded by Ajay Bijli who is the chairman and managing director of PVR
Cinemas. Ajay Bijli's brother Sanjeev Kumar Bijli is the Joint Managing Director of PVR Ltd.
The company also operates a pro-active CSR wing under PVR. The first PVR Gold Screen
was introduced in Forum Mall, Bangalore.

PVR Cinemas: Largest cinema exhibition company in India

2014 Plans to launch a 15-screen Superplex with KidZania.

2008 PVR Cinemas goes fully 2K digital chain.

2004 Launch of PVR Gold Class.

1997 The Company pioneered the multiplex revolution in the country by establishing the first multiplex
cinema , PVR Anupam in 1997 at Saket, New Delhi.

1995 PVR was incorporated in April 1995 pursuant to a Joint Venture Agreement between Priya
Exhibitors Private Limited and Village Roadshow Limited, Australia.

Since its inception in 1997, the brand has redefined the way entertainment is consumed in
India. It currently operates a cinema circuit comprising of 462 screens in 104 properties in 44
cities pan India. The subsidiaries range from the largest bowling chain in India, 'PVR bluO' to
the two casual dining restaurants Mistral and Mr Hong under PVR Leisure. The group under
the arm of PVR Pictures is into film distribution of non-studio/ independent international films
in India. The company is also known for cultivating and spreading international movie culture
countrywide and supports independent filmmakers under the banner of 'Directors Rare'.
PVR acquired the Cinemax properties in 2012 and currently serves 60 million patrons at pan
India level. From Gold Class and Mainstream Cinemas to Director's Cut, PVR has made
exceptional technology like the IMAX and the Enhanced Cinema Experience (ECX) accessible
to its audience. Currently amongst the top 10 cinema companies in the world with respect to
admissions per screen, PVR has entered the World Economic Forum's List of Fastest-Growing
'Global Growth Companies'.
PVR AS A BRAND

PVR has successfully assimilated the Standard operating business and operational practices of
Village Roadshow and set new standards in the quality of exhibition in India. The quality of
cinema viewing has made the PVR brand synonymous with high quality cinema viewing in
the country. This has enabled them to enter into strong corporate alliance partnerships and co-
marketing exercises with leading brands like Pepsi, Evian, Samsung, Whirlpool, Hero Honda,
Bharti, American Express, Master Card, Pizza Hut, Cadburys etc. This has generated
additional steady stream of revenues for the company.

PVR – MARKETING ENVIRONMENT

 Threat of competitors
PVR Cinema currently faces competition from other companies in the Indian film exhibition
sector. Some of their competitors have greater financial resources than them and therefore they
may be in a better position than PVR to invest in Multiplex Cinema projects or to sustain losses
from such developments in the start-up stage. In the future, they may also face competition
from global entertainment companies if and when such companies make their foray into the
Indian exhibition sector. There are currently seven major competitors in the film exhibition
industry: PVR Cinemas; Inox Leisure Limited; Adlabs Films Limited; Shrinagar Cinemas
Limited; E City Entertainment; Wave Cinemas; and DT Cinemas. The tables below show the
number of screens operated by each of those companies and the number of cinemas operated
by each of those companies.

 Threat of substitutes

PVR faces competition from other forms of entertainment including, television, film DVDs,
newspapers, magazines, radio, internet and theatre and advances in technology related to
entertainment, such as MP3 and multimedia messaging etc. These other forms of entertainment
compete
with cinemas for the discretionary spending of patrons and for the ad-spend of advertisers.
Accordingly, PVR cannot be certain that they will not lose 34 some of our cinema audiences
to these competitors or lose advertising revenue to them. If they are not able to compete
effectively, their business, results of operations and financial condition could be adversely
affected.
Films constitute 28% of the total entertainment industry of Rs. 20000 crores in India.
Television forms a major 65%. Piracy and home-viewing may reduce the number of cinema
patrons. On account of inadequate enforcement of anti-piracy laws in India, and on account of
increasing homeviewing options, the number of cinema patrons may reduce in the future,
which may have a material adverse effect on the company’s revenues and results of operations.
Television is expected to grow at a faster pace than cinema.
  Supplier Power
The cost of exhibition of a film varies across films and cinemas and if PVR is unable to obtain
films on competitive terms its operational results may be adversely affected. The film
exhibition industry in India relies on distributors to obtain films for exhibition. For hiring a
film, the distributor’s share is normally a percentage of ticket receipts (net of entertainment
taxes) and the applicable percentage is negotiated on a film to film basis in respect of movies
produced in India and periodically for film releases by international studios. Distributors work
on a non-exclusive basis and there is competition between exhibitors to acquire films.
Competitive pressures may result in increasing the cost at which we acquire the rights to
exhibit films. If PVR is unable to recover such increased costs through higher box office
collections or other forms of revenue generation, our results of operations would be adversely
affected. PVR has itself diversified into film distribution and hedged this risk partially.

 Buyer Power

PVR was the first to open a multiplex in India. It was one of its kind and due to lack of similar
cineplexes around, PVR had an upper edge as far as buyers were concerned. It charged a high
price and positioned itself as a premium service. Though other multiplexes like Satyam, 3 C’s,
DT cinemas, Waves etc. have come up, PVR still enjoys a strong position. It has further
strengthened its premium position by launching luxury cinema at select locations. ‘Europa’
and ‘Gold Class’ experience has complete redefined the movie watching experience.

PVR – CUSTOMER PROFILING

On the basis of customer preferences, we may classify PVR under the Clustered category. This
is owing to the fact, that out of the entire masses they have clearly defined their target audience
and aim to cater to them. Also, PVR is a Concentrated Market because they only cater to the
premium movie-going audience i.e. SEC A and SEC B. PVR Cinemas has approx. 22 million
movie goers per month.

Consumer Demographic Segmentation:

- Age: 61% between 18 and 49

- Gender: 47% Males / 53% Female
- Income: 61% have income over 50K
- Education: 55% of adult movie-going audience has attended/graduated college
- Of these adults, 37% have college degrees or higher

PVR Movie Goers are people with high resources and can be classified as “Experiencers” who
seek variety and entertainment. Spend a comparatively high proportion of income on fashion,
entertainment, and socializing.
“PVR Movie Buffs” generally have the following major tendencies:-

-Go outside the home for entertainment

-Participate in sports and other active lifestyles

-Hard to reach through other traditional media

-lighter television and radio users, but heavy internet users

-Receptive to advertising in movie theatres, consider as part of their movie going experience.