Mid-Semester Exam

Subject: Managerial Economics

JLUID & ROLL NO: JLU05162 &2020MBA020

Subject Code: BC10078

Submitted By: Submitted To:

Abhishek Bidhan Proff. Sunil Kumar
 CASE STUDY

Que1) What lessons can you draw from the case regarding consumer
behaviour?
Ans: I ‘can clearly see a significant growth in population in urban areas like metro
cities just because of increase in employment opportunities. Since the earning
capacity of individuals has increased gradually, people are ready to spend more for
entertainment segment. But there has also been a significant shift in the preference
of spenders when it is concerned with entertainment. And banks also providing
various new financing options like credit purchase that helps the middle-class urban
India to start enjoying things which upper classes had been enjoying for the past
couple of years. Mostly the peoples like have more entertainment for less money or
more entertainment under a single roof. Multiplex industry has timely capitalized of
this need of consumers and has started to improvise more on these needs. These
factors can be drawn regarding the change in the consumer behaviour .

Que2) Do you think change in consumer perception in middle class has been
instrumental in emergence of multiplexes? What can be the other reasons?
Ans: The change in consumer perception of middle class is more like instrumental &
influential to an extend of the emergency of multiplexes. And furthermore, the
requirement for greater diversion under a solitary rooftop and at a sensible cost has
been appropriately perceived which has prompted the legitimate situating of multiplex
business.
In India the population of middle-class is more than the target market for the multiplex
industry is. The acquiring limit of working class has likewise significantly improved by
and large and keeps on improving even further as well.
There are some more reasons which shows the emergence of multiplexes are:
a) As many shops or brands are lied under the same roof, the maintenance cost is
shared in smaller unit which consumer less from the profit a shop earns.
b) Windows shopping is more prominent in the multiplex malls. Which help for
advertising & marketing in a much easier way.
c) It is very beneficial for the food chain because food chain has found a very
better place to sell out their products in a huge scale. individuals who come to
multiplex have a thought of testing out with new things under a solitary rooftop.
d) Mainly Global brands founds the multiplexes as the right place for positioning
their brand & products among the maximum spending communities.
e) Rise of design outlets of different brands in multiplex shopping centers since
from a promoting perspective there is a tremendous potential in situating and
selling of items.
 Que3) Which of the groups, according to you, would have demand for
multiplexes?

Ans:

CATEGORY OF No of Household in Millions

PEOPLE

1994-1995 1999-2000 2006-07

Very Rich 1 3 6

Consuming 29 55 91

Climbers 48 66 74

Aspirants 48 32 15

Destitutes 35 24 13
CATEGORY OF HOUSEHOLDS
NUMBER OF HOUSEHOLDS (in millions)

91

74
NUMBER OF HOUSEHOLDS (in millions)

66

55
48 48

35
32
29

15 15
13
6
3
1
CH
IN
G RS TS T E
RI BE AN TU
RY S UM L IM PIR S TI
VE N C AS DE
CO

CATEGORY OF HOUSEHOLDS

1994-95 1999-2000 2006-07

1994-95 1999-2000 2006-07

By seeing the graphical representation of the data, we get to know that analyses &
interpreted that the potential market for the multiplex industry has been & will be
among the very rich, Consuming & climbing segment of the entire population. There
will be a proceeded with expansion in pattern as long as the procuring limit of
individuals, having a place with the previously mentioned gatherings, improves. India
is the future worldwide market and its indications have effectively begun to make its
quality which thus will improve the monetary status of different gatherings of Indian
populace.

Que4) Would law of diminishing marginal utility apply to movie watching? Will
this affect the growth rate of multiplexes? Or can it be seen as a cause
for establishment of multiplexes? Give arguments in support of your
contention.
Ans: The law of Diminishing Marginal utility would make a back stride with regards to
media outlet as long as there is development in it. The pay level of the extremely rich,
devouring and climbers' gathering will keep on expanding as long there is expansion in
development chances of India since these three gatherings are connected to one
another. Development of the multiplexes won't be influenced from a negative
perspective however every new multiplex should come out with an original thought in
focusing on these objective potential business sectors creatively with new and
appealing highlights which will be important for the purchasers. This implies that
realizing that there will be change in shopper inclinations occasionally; it ought to be
simply the obligation of the multiplexes to resuscitate itself with imaginative thoughts
for its reality. The shoppers would not settle on getting the full film seeing experience
which is got at ideal quality in multiplexes.
Que5) Can multiplexes use the concept of consumer surplus for attracting
more consumers? How?
Ans: Firstly, I’ll talk about Consumer Surplus. Consumer surplus is the difference
between the prices which the consumer is willing to pay & the amount which they
actually pay. Along with the earning & buying capacity of the consumers’ increase. The
concept of consumer surplus can be used to attract more customers. This may
become an opportunity for the multiplex developers, they can make good business by
providing good quality entertainment to the customers. As the spending limit of the
buyers is acceptable, the purchasers will wouldn't fret to spend more to get fulfillment
in the assistance they get from what they pay. So just the multiplex business offers
tickets at higher rates than the single screen film lobbies in this manner ready to
contribute more on innovations which can pull in an ever-increasing number of clients
by giving them a staggering encounter.
By going through the case, it is obviously clear how multiplex business arose to its top
by using the expanded potential among the working-class individuals. They rushed to
detect the chance that has appeared among a specific gathering of individuals. So, I
can clearly say that the multiplexes business will tend to be more profitable as they
improvise their technology to provide an excellent viewing experience to the
customers.