BUSINESS PROPOSAL FOR CINEPLANET

HOW DOES CINEPLANET MAINTAIN

THEIR MARKET LEADER ?

PRESENT TO: MR. KEVIN NGUYEN

IDEO TEAM MEMBERS:

S3619486 - Huynh Kim Hoang
S3462662 - Ma Bao Tran
S3635113 - Le Thi Lan Phuong
S3480656 - Thai Van Minh Oanh
S3635543 - Laerke Heller Wohlfahrt

Executive Summary

In 2013, Cineplanet is the market leader of cinema entertainment industry in Peru, not only leading in
the number of theaters and ticket sold, but also providing the best innovative technology and services.
However, the Peruvian cinema entertainment industry is still underserved and full of potential to
exploit due to the huge growth in income from the Peru’s middle class.
In order to maintain Cineplanet market leader position and expand its market share, the Double
Diamond Model is applied to find out that it is necessary to provide the new service to improve the
customer’s experience when they go to the cinema. There are three potential solutions are designed for
Cineplanet, which are Souvenir shop, Healthy snack bar, and Entertainment Area. However, basing on
analyzing the insight demand of customers, healthy snack bar is the best solution for Cineplanet to
take advantages of the current situation and achieve its goals.

 Table of Contents
I. Introduction........................................................................................................................ 1
1. Background information............................................................................................... 1
2. Current situation ........................................................................................................... 1

II. Discover customer .............................................................................................................. 1

1. Persona ........................................................................................................................... 2
2. Empathy map ................................................................................................................. 3

III. Define opportunity ............................................................................................................. 4

IV. Develop solutions ............................................................................................................... 4
1. Entertainment area ....................................................................................................... 4
2. Souvenir shop ................................................................................................................. 5
3. Healthy snack bar .......................................................................................................... 5

V. Deliver recommendation ................................................................................................... 5

1. Recommendation ........................................................................................................... 5
2. The implementation plan .............................................................................................. 6
3. Marketing campaign in detail ...................................................................................... 7
4. Setting Target - SMART model ................................................................................... 7
5. Budget ............................................................................................................................. 8

VI. Conclusion .......................................................................................................................... 8

VII. References ..................................................................................................................... 9

 I. Introduction
1. Background information
Cineplanet is established in 1999 by three Peruvian friends and quickly became the largest cinema
chain in Peru with a market share of 40% in 2013. Cineplanet not only leads in term of number of
theaters, tickets sold, net income but also offers the best innovative technology and services, as its
customers demanded high quality amenities and services (Buell and Otazo, 2016).
According to World Bank, Peru witnessed the fastest growth in economy from 2002 to 2012, which
lead to an increase in citizen’s income. As a result, Peru’s middle class who occupied 60% of total
population in 2014 spent more money on entertainment and going to the movies became one of their
favorite activities. In 2013, the number of ticket sold has an increase of 13% over the year before and
the revenue from box-office increase by 73% between 2008 and 2012, which makes Peru become the
fastest region about moviegoers (Buell and Otazo, 2016). Therefore, Peru is a potential cinema market
for Cineplanet to expand.

2. Current situation
Cineplanet wants to remain its position as the leading cinema chain on the market through
understanding the situation in the view of human-centered design thinking (Buell and Otazo, 2016).
Therefore, the purpose of this report is to get a deep insight and understanding of demand of
customers and then offer recommendation for Cineplanet to achieve its goals by applying the double
diamond model.

II. Discover customer

Reported by Andina (2014), Peru’s middle class increased from 25% in 2005 to 60% of total
population in 2014, which was indicated as a big shift in Peru’s population. Furthermore, Peruvians
are family-oriented country including normally 2 parent incomes and 2 kids, in which, they enjoy
having outdoor activities together (International Market Bureau, 2010).
Therefore, with the increase in their income, Peru’s middle class families become a new potential
market for Cineplanet to cover.

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 1. Persona
Father Mother Son Daughter
Demography Male Female Male Female
Age above 30 Age above 27 Age above 15 Age above 8
Middle class income Middle class income
Background Get married with 2 kids Get married with 2 kids Secondary students Primary students
High education High education Respect and follow parent’s Respect and follow parent’s
Head of family Respect and follow husband’s decisions decisions decisions
Goals Higher promotion in career. Higher promotion in career. Get high score at school Get high score at school
Provide the best environment for his Provide the best environment for his Have more happy time with Have more happy time with family
kids. kids. family Have more beauty toys
Have more happy time with family. Have more happy time with family. Have more friends
Balance between working and family
Hobbies Outdoor activities with family Outdoor activities with family Outdoor activities with family Outdoor activities with family
Go to public venue for entertainment Shopping Hang out with friends Watch cartoon
Play tennis Hang out with friends Play computer game Play with babies
Buying Willing spend more money for family, Willing spend more money for family, Follow the trend Interested in colorful, beauty toy
behaviors high quality service and product high quality service and product Interested in technology and cartoon

Table 1: The information of potential customers

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 2. Empathy map
Father Mother Son Girl
Thinking Happy time with family Happy time with family Time for entertainment after Go out with family
Time for entertainment Time for entertainment studying Relax time
Valuable time Quite consideration about money Happy time with family
Valuable time
Seeing Big screen Big screen Nice cinema Beautiful cinema
Friendly staff Friendly staff Friendly staff Clean toilet
Clean toilet Clean toilet Clean toilet
Hearing Good sound system Good sound system Good sound system Good sound system
Noise from other customers Noise from other customers
Feeling Relax with family Relax with family Relax with family Interested
Unhealthy food Unhealthy food Happy
Doing Choose the movie Choose the movie Play games while waiting Chat with parents
Buy ticket, food and drink Use mobile while waiting Chat with parents Eat popcorn and drink soft drink
Use mobile while waiting Chat with kids Eat popcorn and drink soft drink Take photo
Chat with kids Take photo Take photo
Take photo

Table 2: The empathy map of potential customers

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Base on the persona and empathy map above, IDEO team find out the key insights of Peru’s
middle class families:
− Family-oriented, value activities that family can enjoy together.
− Enjoy going to public venues.
− Favorite outdoor activity is going to cinema with family.
− Sophisticated demands for better service and entertainment.
− Holistic approach to nutrition & health (International Market Bureau, 2010)
− Spending more money for entertainment and technology.

I. Define opportunity
It is observed that Peru has a rising middle-class among families. These middle-class families have
emerged rapidly and they are suddenly more financially secure. They have higher income and are
willing to spend a lot of money on entertainment. Furthermore, their favorite entertainment is going to
the cinema so this fast growing market is very underserved and it is seen as an optimal opportunity to
expand for Cineplanet.
Cineplanet wants to expand its market share and makes them become different form other competitors
through selling experiences that meets the high demands and needs. These customers have very high
and sophisticated demands and needs. Thus, based on above information’s Cineplanet have an
opportunity to target this rising middle-class by creating new services and products. Cineplanet’s goal
is to be innovative and not only selling soft drinks, popcorn and candy but also sharing the best
experience with (Buell and Otazo, 2016).

II. Develop solutions

It is important for a company to release new opportunities and choose the best time to expand its
business. The company should emphasis heavily on middle class to provide them higher service
quality so that they can have more experiences during the entertaining time. Based on the
opportunities and demands of customers, three possible solutions are suggested to satisfy goals of
Cineplanet.

1. Entertainment area
First of all, creating an entertainment area would be a recommendation that may assist to create
experience for customers, and more important, this activity would gain more profits for the company
by selling coins to play games. New gaming machines, magazines, and a costume room for kids etc.
are provided to customers during waiting time so families can spend time together in the entertainment
area before the movies starts and this will provide them with experiences and good time. Furthermore,
it would not feel like waiting while spending time in the area, because Cineplanet with this solution

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makes it entertaining and fun to wait. As a result, entertainment area may have high contribution on
customers’ experience. Nevertheless, the company has to invest a lot of capital on new gaming
machines and maintenance cost in long term.

2. Souvenir shop
The second recommendation for its opportunities is opening a souvenir shop, which sells key chains,
toys and other products related to characteristics in the movies. The main purpose of this solution is to
help customers remember the good experience that they shared with their family and friends.
Moreover, it is obvious that children love toy and this is the happy time with family, so the parents are
willing to spend money buying some toys to make their children happier when going out with
families.

3. Healthy snack bar

Healthy snack bar is one of the best solution IDEO team wants to suggest for Cineplanet. Most of
people, who belong to the middle class have, gain better education so they are more aware of the
negative effects of fast food. Therefore, they would be aware on what they eat and drink and offering
them healthy snacks would still provide with a good experience during the movie.

III. Deliver recommendation

1. Recommendation
To come up with a final solution that can be implemented the Roadmap is a useful tool, which may
help to analyze clearly the scenario of each solution.

Figure 1: The Road map for three solutions.

Base on the Road map for 3 solutions, souvenir shop and healthy snack bar are also high value but
comparing to healthy snack bar as a third solution, souvenir shop is not as practical as the healthy

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snack bar for a number of reasons. Firstly, healthy snack bar not only offer more healthy choices for
customers but also show that the company take care and love its customers by offering them good
snacks. Furthermore, the major of middle class are above 27 years old, so most of them have family.
According to International Market Bureau, Peruvians usually hang out with their family to relax and
entertain, so it is a great chance to attract both parents and their children to healthy snack bar.

2. The implementation plan

After deciding the best solution for Cineplanet to attract more middle class families, IDEO team will
chose two of Cineplanet’s theaters, the one with the highest and the one with the lowest income last
year, to prototype and test the effectiveness of the idea – Healthy snack bar in 6 months (from June
2017 to November 2017). By this way, we can receive the reaction of customers from both sides and
have a more accurate estimation for the new service with low time and money spending.

The implementation plan is designed to open healthy snack bar in Cineplanet in June 2017. This is
suitable time for Cineplanet to offer this new service, because it is the summer when new blockbuster
movies are released. Especially more people are free at this time of the year, so they can spend more
time with their families going to cinemas.

Department in
Task Timeline Requirement
charge
- Find out the popular
healthy snack in Peru.
1 Designing the menu Marketing 01/05/2017 – 08/05
- For suggestion: fresh juice,
fresh fruit, tea, coffee, nuts
Hiring the construction
company and HR and Completing the healthy
2 01/05/2017 – 15/05
constructing the selling Marketing snack bar on time
area
01/05/2017 – 22/05: Completing the recruitment
Hiring and training recruitment and training process to make
HR and
3 new employees (2 sure all staff know how to
Marketing
people for each branch) 23/05 - 29/05: use equipment and has the
training good behavior to customers
Installing all necessary HR, Marketing
Making sure all stuff will
4 equipment such as cash and Cinema 16/05/2017 – 22/05
work well.
machine, mixers and managers

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 blenders, etc
- Introduce the new service
to customers.
5 Marketing campaign Marketing 15/05/2017 – 30/06 - Provide the promotion
during the first month of
opening day.
Table 4: The plan for implementation for Cineplanet

3. Marketing campaign in detail

The opening day -

15/05/2017 - 31/05 01/06/2017 02/06/2017 - 30/06

Putting the Keeping all the

standing in the Keeping all the marketing
activities that we
front of the activities that we
did before
cinema did before

Social marketing Providing the

activities through promotion: Continuing to
provide the
Facebook, present the toy
promotion
Instagram when buying new
products
Displaying the Collect and
new service analysy the
before the feedback of
showing time customer. If there
is any problem,
we will fix it and
repeat this
process

Figure 2: The detailed Marketing Campaign for Cineplanet

4. Setting Target - SMART model

In order to better monitor the success of the implementation plan, SMART model is applied to set the
target for this plan.

Target 10% growth in revenue in 6 months

Specific The target is stated clear and simple enough. The metric for the target is the total
revenue growth in a specific amount of time.

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 Measurable 10% growth in revenue is measurable and is the metric of success from this
implementation.

Achievable The market is underserved; the middle class needs for entertainment is growing and
they are willing to spend more money on this service because of the increase in
income. Therefore, there is a huge market potential to be exploited and this will be
one of the main sources of growth for revenue.

Relevant Achieving this target, which is expanding the market share for middle class
families going to Cineplanet and at the same time is able to satisfy the customers,
which is aligned with Cineplanet’s goal of not only selling products but also
sharing the best experience with customers.

Time-bound The implementation plan runs for 6 months and this target is used to measure the
success of the plan in that 6 months.

Table 5: SMART model for Cineplanet

5. Budget
Because this is an important plan to transform the image of Cineplanet, 15% of the promotion budget
in 2017 should be spent for this program. However in the testing phase (first 6 months), only 3% of
the budget will be spent to set up new healthy snack bar in the selected highest and lowest income
cinemas. After that, the last 12% of the budget will be adjusted according to the result of the
implementation phase and will be spent to set up the healthy snack bar in all cinemas of Cineplanet.

IV. Conclusion
Cineplanet are known as the market leader in cinema industry in Peru, but the customers become more
sophisticated and the marker for middle class is undeserved. Therefore, Cineplanet needs to create
new service or product for middle class families to make Cineplanet becomes different from other
competitors to expand its market share and maintain its leader position. Base on analyzing the insight
demand of customers, healthy snack bar is the best solution to redesign its image, which is not only
selling the product but also sharing the best experience with customers, and obtain their goal.

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 V. References
1. Andina, 2014, 60% of Peruvian citizens are now considered middle class, viewed by 27
October 2016, http://www.peruthisweek.com/news-60-of-peruvian-citizens-are-now-
considered-middle-class-103215.
2. Buell, R. and Otazo, A., 2016, IDEO: Human-Centered Service Design, viewed by 27
October 2016, https://lms.rmit.edu.au/bbcswebdav/pid-7662925-dt-content-rid-
17688157_1/courses/BUSM4535_16s3/Harvard%20Case%20Study-
IDEO%20Human%20Centred%20Design.pdf.
3. Current population of Peru, 2016, viewed by 27 October 2016,
http://countrymeters.info/en/Peru.
4. International Market Bureau, 2010, The Peruvian Consumer Behaviour, Attitudes and
Perceptions toward Food Products, Agriculture and Agri-Food Canada, viewed by 27 October
2016, https://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-
statistics/pubs/peru_consumer_report_en.pdf.