A PROJECT REPORT

ON

MARKETING STRATEGY OF
PVR CINEMAS
SUBMITTED IN PARTIAL FULFILLMENT FOR THE
AWARD OF THE DEGREE OF BACHELOR OF
BUSINESS ADMINISTRATION 2009-2012

UNDER THE GUIDANCE OF

MRS. EKTA DARGAN
Asstt. Prof., MAIMS

SUBMITTED BY
VIPIN KUMAR TIWARI
ENROLLMENT NO.08961101709

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

AFFILIATED TO: GURU GOBIND SINGH INDRAPRASTHA
UNIVERSITY, DELHI

PSP Area, Plot No.1, Sector 22, Rohini Delhi 110086

CERTIFICATE

This is to certify that the Project entitled Marketing Strategy of PVR

Cinemas is completed by Mr. Vipin Kumar Tiwari, Enrollment No.
08961101709 in partial fulfillment of the requirement for the award of
degree of Bachelor of Business Administration at Maharaja Agrasen
Institute of Management Studies, Delhi. This is an original piece of work
& have not submitted it earlier elsewhere to the best of my knowledge
and belief.
Date:
PROJECT GUIDE:
MRS. EKTA DARGAN

ACKNOWLEDGEMENT
I owe my sincere thanks and gratitude to Ms.Ekta Dargan ( Project guide) who
inspired me by her able guidance and was a constant guiding light during the course
of project study. The support and knowledge provided by her has been a great value
addition for me and will go a long way in building a promising career.
First of all I would like to thank Mr.Dr.N.K.Kakkar ( Hon.Director General , MAIMS
) who gave me this golden opportunity to learn something new about project
writing.
I would also like to thank Mrs.Sanam Sharma {course coordinator , BBA 3rd b (2s) }
who cooperated with me and gave me valuable suggestions during the entire project.

VIPIN KUMAR TIWARI

TABLE OF CONTENTS
Student Declaration
Certificate from the Guide
Acknowledgement
Executive Summary
1. INTRODUCTION

1-17

Entertainment Industry Overview

Film and Exhibition Industry Overview

2. RESEARCH METHODOLOGY

17-22

Research Methodology

18

Research Objective

17

Research Design

18

Data Sources

18

Secondary Data

20

Limitation of the Research

22

3. PVR CINEMAS: ABOUT THE COMPANY FILM

INDUSTRY DETAILS

23-67

About the Company

23

Marketing Mix: 7 Ps

49

PROCESS / BCG Matrix

63

4. FINDING ANALYSIS

68-74

SWOT Analysis
PEST Analysis
STP Analysis

73

5. RECOMMENDATIONS

75-76

6. CONCLUSION

77

BIBLIOGRAPHY

81

CHPTER-1
INTRODUCTION
EXECUTIVE SUMMARY
This has encouraged the growth of Multiplex Cinemas and also encouraged singlescreen theaters to convert into Multiplexes. The quantum of entertainment tax benefit
which may be available in each state is different and the availability of these
exemptions would be dependant on compliance with certain conditions specified by
the relevant state.
To counter this issue of low first instance release, digital cinemas are being opened in
B and C-class centers in India and movies are being released in those cinemas at the
same time as movies are released in the A-class centers. Digital copies of films cost
significantly less than film copies (approximately Rs. 3,000 for digital compared with
Rs. 70,000 for film) and the cost of digital projection equipment being used in India is
also significantly less than that of film projection equipment (approximately Rs.
800,000 for digital compared with Rs. 1.5 million for film).
PVR has been largely successful in maintaining this balance of the economic
feasibility of providing world class entertainment standards of cinema in India. They
were the first to introduce the concept of Multiplexes cinemas in India and even today
PVR is the clear leader in this segment, with its multiplexes spanning across 20 cities
in India

The present scenario is that PVR Cinemas offers entertainment at modest and
economic prices with world class entertainment facilities in India and has brought
about a revolution in Indian cinema, through excellent planning and implementation
of strategies decisions taken by its CEO Sanjay Bijli.
The focus is on the complex and dynamic nature of marketing with emphasis on
creative problem solving for brands.
Many business firms, their top executives and marketing managers gave their valuable
time and materials for preparing my thesis.
6

ENTERTAINMENT INDUSTRY
Over the last decade, India has registered the fastest growth among major
democracies and is now the fourth largest economy in terms of purchasing power
parity.
Over the years, spending power has been steadily increasing in India. On an average,
30-40 million people are joining the middle class every year. The consumption
spending is rising due to increasing disposable incomes on account of sustained
growth in income levels and reduction in personal income tax over the last decade.
The Indian Entertainment Industry is expected to significantly benefit from this fast
economic growth, as this cyclically sensitive industry grows faster when the economy
is expanding. When incomes rise, proportionately more resources get spent on leisure
and entertainment than on necessities.

INDIAN FILM AND EXHIBITION INDUSTRY OVERVIEW

The Indian film industry is the largest film industry in the world in terms of the
number of films produced and admissions each year.
The Indian film industry revenue for 2007 was estimated at Rs. 59 billion (US$1.3
billion), which was less than 1% of global film industry revenue and a fraction of the
U.S. film industry revenue, which was US$9.49 Billion in 2006.
The pie chart below sets forth the percentage contribution of various revenue sources
to the total revenue of the Indian film industry in 2007.

Although over 90 years old, the Indian film industry was only accorded the status of
an industry in 2005. Consequently, it is only during the last five years that the Indian
film industry has been able to attract financing from banks, financial institutions,
private equity investors and corporations. Prior to 2005, the industry was almost
solely reliant on private and largely individual financing. Although corporatisation of
the film industry has started, the film industry is currently largely unorganized and
fragmented.
Going to the cinema is one of the most popular entertainment options in India. In
2008, the total admissions in cinemas in India were 3,100 million. The second largest
number of admissions is in the United States, which had 1,500 million admissions in
2008.

THE FILM INDUSTRY COMPRISES THREE SUB SECTORS:

Film production, which involves the making of movies;
Over 900 Indian produced films were released in 2007. Hindi films constituted the
bulk of films produced in India closely followed by regional films in Telugu, Tamil,
Kannada and Malyalam. Hindi films are the most popular films in India and account
for over 40% of the total revenues of the Indian film industry. The majority of Hindi
films are made in Mumbai, popularly referred to as "Bollywood". Around 30% of the
films made in India generate 90% of the Indian film industry's revenue.
Film distribution, which involves the distribution of movies to cinemas, television
and video stores;
The film distribution system in India is territory-based. The country is geographically
divided into 14 distribution territories and film producers tend to sell distribution

rights for each territory. Most film distributors in India are small businesses. This has
resulted in the film industry being highly fragmented, with each territory having 5075 distributors, while 8-10 distributors operate on an all India basis. A distributor
generally sells its rights to sub distributors who cover certain sections in a territory
Film distribution sector characteristics and trends
In the recent past, some of the larger producers have vertically integrated into
distribution, especially into overseas markets.
A number of new entrants have entered the distribution business, resulting in an
increase in acquisition cost for distributors.
Distributors are trying to lock in the content at a very early stage by financing film
producers.
Distributors are playing an increasing role in marketing of films.
New films are being released in satellite/ video formats within a shorter period
after theatrical release, thereby reducing the window for theatrical exploitation.
New films are being released across a larger number of theaters with a large
number of prints in order to maximize theatrical revenues in the shortest time
period.
New distribution formats, like digital distribution through DVD, are being
implemented.
The increasing size of the home video market is also expected to provide growth
for the distribution sector. As of the end of 2007, over five million Indian
households had a VHS or DVD player, an increase of 50% compared with the end
of 2006. Increasing wealth should result in more Indian households owning a
VHS or DVD player and expand the home viewing market.

FILM EXHIBITION, WHICH INVOLVES THE EXHIBITING OF

MOVIES IN CINEMAS.
The Indian film exhibition sector can be divided into two segments: single and
double-screen cinemas and multiplex cinemas, i.e., a cinema complex with three
screens or more. As of March 2007, there were approximately 12,000 cinemas in
India of which 73 were multiplexes with a total of 276 screens.

10

INDIAN FILM EXHIBITION SECTOR

The Indian film exhibition sector had revenues of Rs. 34 billion in 2006.
Despite the higher number of tickets sold in India, the total reported box office
revenue is significantly lower in India compared with the United States. This is
primarily due to the fact that ticket prices are much lower in India, with an average of
Rs. 15 . The lower ticket prices in India are due to lower income levels, especially in
rural and semi urban parts of the country, and the lack of good quality cinemas. The
average price of a ticket for a multiplex cinema is Rs. 75 - 85 but the number of
screens in multiplexes represented only 2.3% of total screens in India as of March
2007. (Source: Yes Bank Report) An increase in the number of Multiplex screens
should result in an increase in film exhibition revenues, so the opening of new
Multiplexes represents a significant growth opportunity for the industry. The total
reported box office revenue in India is also lower because the amount of revenue
collected at the box office is under reported due to the fragmented and nontransparent nature of the film exhibition sector.

ORGANISED RETAIL BOOM

A growth in consumption levels, changing lifestyles, the availability of quality real
estate and significant investments in malls are expected to result in an increase in the
size of the organized retail business in India. The organized retail market in India is
expected to increase its share of the total retail market from 2% as of 2006 to reach 56% by the 2007. The number of malls in India is expected to increase from
approximately 50 as of the end of 2006 to around 250 by the end of 2007. One of the
key elements for the success of a mall is its ability to drive footfalls consistently.
Multiplexes are one of the anchor tenants in large format malls, as their presence
increases footfalls by approximately 40-50%. The expected organized retail boom
should result in a significant increase in the number of Multiplex Cinemas.

11

SOCIAL
Movie watching is becoming an experience more than just a casual outing with the
family. The lines are blurring between watching a movie for entertainment and
watching a movie for leisure. The movie experience goes much beyond just watching
a film. The encouraging growth in the number of multiplexes is making the movie
goers, especially in urban India, experience a new way of enjoying movies.
Higher consumption spending and consequent changes in lifestyle are also spurring
the growth of the Indian Entertainment sector.
Since the late 90s distribution has become equally as important as production to the
Indian movie industry. Multiplexes were the natural choice for distributing movies in
large cities. Space was at a premium and several movies were competing for limited
number of screens. Multiplexes not only increased the number of available screens,
but also provided them with excellent acoustics and enhanced picture display.

12

INCREASE IN NUMBER OF HIGH GRADE HINDI FILMS

Demand for a particular movie is generally driven by both its critical reviews and
word of mouth from patrons. An increase in the average quantity of high grade Hindi
films released per week should increase the
total demand for movies, as these movies tend to be more popular. As shown in the
table below, from 2001 until 2006, there was an increase 48% in the number of
releases per week for high grade Hindi films.

Increasing corporatisation of the film production sector should result in an increase in

the number of high quality films produced, which should increase demand for movies.
In an increasingly corporate environment,
unviable movies with weak scripts should find it difficult to garner funding.
Consequently, although the average number of films produced annually in India is
expected to fall from over 900 in 2006 to around 600
by 2010, the quality of the movies produced is expected to increase.

13

POLITICAL
The year 2006 also witnessed a change in the political scenario of the country with a
positive impact on the regulatory scenario. A new set of policy makers are looking at
this segment with a fresh perspective, which is a positive sign. On the other hand this
does give rise to delayed policy decisions, a fact not favoured by all.
Several state governments provided incentives to encourage the growth of
multiplexes. A positive concession given to the cinema theatre industry in 2006/07
was the deduction of 50 to 100% of the profit earned by multiplexes that came to
them in the next two to five years. The waiver was restricted to multiplexes, which
were essentially in metropolitan cities, but the concession has been extended to
smaller cities too.
To boost the sector, the government has opened large parts of the sector to foreign
direct investment (FDI). It allows 100 per cent FDI on automatic basis in the film
industry with no entry level pre-conditions.

ENTERTAINMENT TAX BENEFITS

In the late 1980s various state governments imposed steep increases in entertainment
taxes, which lead to a decrease in the profitability of cinemas. This adversely affected
investment in cinemas and maintenance standards as cinema owners tried to reduce
their costs, which lead to a fall in the ambience of cinemas and a decrease in the
quality of audio and visual standards. The fall in cinema standards coupled with the
availability of watching movies on videocassette players lead to a decline in cinema
patronage. Most cinemas were during that time, and still are, run as small business
and these businesses did not have access to capital to improve the cinema ambience
and quality to arrest the declining patronage.
In June 1997, we opened the first Multiplex Cinema in India in Saket, Delhi. Since the
beginning of 2005, several state governments unveiled tax incentives (by way of
complete or partial waiver of entertainment tax
in the initial five years of operation) to attract new investments in the film exhibition
business. The tax incentives coupled with falling interest rates made investment in
14

cinemas more attractive and led to old cinemas being converted into Multiplexes and
new Multiplexes being established as part of shopping complexes (or malls). State
entertainment taxes in India are among the highest in Asia. This has resulted in
pressure on the profitability for a number of players in the exhibition business. As a
result, exhibitors (especially the single screen owners) have not been able to maintain
and/or upgrade their cinemas. A worsening quality of cinemas resulted in a lower
number of patrons, which put a further strain on profitability. The entertainment tax
percentage in certain states is set forth below:

In order to encourage investment in the film exhibition sector, many state

governments have announced policies offering entertainment tax benefits. This has
encouraged the growth of Multiplex Cinemas and also encouraged single-screen
theaters to convert into Multiplexes. The quantum of entertainment tax benefit which
may be available in each state is different and the availability of these exemptions
would be dependant on compliance with certain conditions specified by the relevant
state. A synopsis of the key elements of the entertainment tax exemptions which may
be available in the following states is given below:

15

16

TECHNOLOGICAL
FILM DISTRIBUTION HOLDUPS
One of the main features of the Indian film industry that differentiates it from those in
western countries is the limited initial release of films. Due to the high print costs for
films (approximately Rs. 70,000 per print) as a percentage of the average ticket price
in India, distributors have adopted a policy of releasing a limited number of prints in
each territory and rotating them in the territory, starting with A-grade cinemas in Aclass centers. The bigger movies are released with 300 400 prints to satisfy a
potential market of 12,000 cinemas. The practice of rotating prints and the resultant
delay of the release of films in B and C-class centers create three major problems for
film exhibitors in B and C-class centers:
Pirated DVD/VCD copies of the film are generally available by the time the film
is released in B and C class centers, which reduces demand;
If the film was not a hit on its initial release in the A-class centers it is unlikely to
do well on its delayed release; and
The quality of the celluloid film print is negatively affected each time it is played,
so poor picture quality is also an issue - often the dark and scratchy print is hardly
visible on the screen.
The above factors result in the box office potential of movies not being realized.
Many cinemas in B and C class centers operate on a 7% to 8% occupancy ratio.

17

IMPACT OF DIGITAL TECHNOLOGY ON CINEMAS IN INDIA

To counter this issue of low first instance release, digital cinemas are being opened in
B and C-class centres in India and movies are being released in those cinemas at the
same time as movies are released in the A-class centers. Digital copies of films cost
significantly less than film copies (approximately Rs. 3,000 for digital compared with
Rs. 70,000 for film) and the cost of digital projection equipment being used in India is
also significantly less than that of film projection equipment (approximately Rs.
800,000 for digital compared with Rs. 1.5 million for film). The significant reduction
in the cost of digital cinema compared with celluloid film makes an India-wide
simultaneous release of a movie economic. As of March 2005, 100 digital cinemas
had been opened in India, of which an estimated 65 were in operation.
As of March 2005, 100 digital cinemas had been opened in India, of which an
estimated 65 were in operation. Digital technology helps overcome the problems
faced by B and C-grade cinemas. First, digitalized motion pictures are not required to
be transmitted through physical media. This means digitalized motion pictures can be
distributed to more B and C-grade cinemas within the first weeks of their release
without incurring additional costs to produce additional prints. Secondly, digitalized
motion pictures maintain consistent and identical picture quality that is not
compromised by use, time, and transmission. Thirdly, reducing the time between the
release of a motion picture and its screening in multiple cinemas helps take advantage
of the heightened demands of cinema patrons during the initial five to eight weeks of
a motion picture's release. This helps to combat the market for pirated motion pictures
and helps increase attendance rates at B and C-grade cinemas.
Implementing digital technology in cinemas in India should expand the market for Bgrade and C-grade cinema owners and operators and thereby increase their
profitability through:
increased number of screens on which newly released movies are shown, without
incurring additional production costs;
Improved and consistent picture quality without regard to the location of the
cinema; and

18

 Satisfaction of cinema patrons' demands at the time when the demand for
screening of a movie is at its highest, which should reduce the loss of demand
caused by the availability of movies on pirated DVDs/VCDs.

CHALLENGES FACED BY TRANSITION TO DIGITAL CINEMA

IN INDIA
The digital projection technology currently being used in India (mostly in B-class and
C-class centers) satisfies the requirements of the B and C-grade cinemas in India but
does not produce a picture quality as good as the picture in A-grade cinemas, where
celluloid film is used. In order to have a digital picture quality as good as the current
celluloid film quality in A-grade cinemas, as well as to meet Digital Cinema Initiative
standards, we need to use at least projectors, which cost between Rs. 4-5 million (US$
90,000-110,000), which is significantly more than the cost of celluloid film
projectors. As and when the digital projection technology up-gradation will be
required in the A-grade cinemas in India, the issue of financing of such equipment
will need to be addressed. In the United States, digital projection equipment is being
financed by Hollywood production houses rather than the film exhibitors, as the
production houses get substantial savings from not having to produce celluloid prints.

19

CHAPTER-2
RESEARCH METHODOLOGY

The data was collected both with the help of primary as well as secondary sources. I
believe that no one source of information would suffice to support the findings and
recommendations. Thus, a combination of primary and secondary sources would
serve the purpose. At some stages of research and analysis, the justification of sources
might face the secrecy code through the company, in such a case the data would be
supported by the summary of the depth interview or a tentative questionnaire report.

TOPIC OF THE STUDY:

Market strategy of PVR Cinema of entertainment industry for various consumer
products

RESEARCH OBJECTIVE
The primary objective of this thesis is to exhibit the market potential for the investors
through extensive marketing and brand positioning in the entertainment industry. It
could also be referred as publicity and various image-building actions.

OTHER OBJECTS ARE AS FOLLOWS:

To analyze and examine all aspects of film marketing.
To do an intensive research about the entertainment spending habits of the new
age Indian consumer with special reference to cinema viewing.
Also to identify countries providing the incentives for the production.

20

RESEARCH DESIGN

The following sources have been identified to provide primary information regarding
the existing business dynamics.

RESEARCH METHODOLOGY
The data was collected both with the help of primary as well as secondary sources. I
believe that no one source of information would suffice to support the findings and
recommendations.
Discussion Guidelines/ Questionnaires
Depth Interviews
Industry Experts
Industry specific consultants

DATA SOURCES

SECONDARY DATA
Secondary data was also collected personally by me, which the company has
furnished for the general public. The secondary data was gathered with the help of
various
Magazines,
Newspapers,
Journals,
Brochures and also through the

21

 Internet.

22

SAMPLING UNIT: Who is to be surveyed? The marketing researcher must define the target population
that will be sampled.
The sample Unit taken by me;General public of different age group, different gender
and different proffesion
EXTENT:Where the survey should be carried out?
I have covered entire residential area of Delhi city for the survey
TIME FRAME:When the survey should be conducted?
I conducted my survey for 8weeks from 10th may to 10th july
SAMPLING FRAME:The source from which the sample is drawn

Sampling Technique: How should the respondent be chosen?

In the Project sampling is done on basis of Probability sampling. Among the
probability sampling design the sampling design chosen is stratified random sampling.
Because in this survey I had stratified the sample in different age group, different
gender and different proffesion

Sample Size/ Population Size: - How many people should be surveyed?

My sample size is 75

23

LIMITATIONS
Following are the problems faced but its a part of game:
1. TIME CONSUMING: It is very much obvious that it is a time consuming
process. So much time has been spent for this purpose.
2. LOW PARTICIPATION: Obviously many respondents have not participated in
this and have also created some problems which simply show that they were not
interested.

24

CHAPTER-3
COMPANY PROFILE
ABOUT THE COMPANY
Priya Exhibitors (p) ltd is a part of the diversified Bijili Group, which has interests in
transport, finance and construction sectors all over India. After a downturn in the
industry in late 80s when the onslaught of video wars at its peak cinema has now been
rejuvenated with the latest international trends in cinema exhibition reaching Indias
shores swiftly with the arrival of satellite TV. The capitals cosmopolitan audience is
becoming increasingly aware of the advanced cinematic technology that enhances the
movie going experience and this has whetted their appetite for watching movies on
the big screen .
To cater to the increasingly sophisticated tastes of the audience Priya exhibitor Pvt
Ltd. totally refurbished the existing cinema in June 1991 including installation of a
Dolby stereo sound system. They also gained exclusive rights to screen blockbusters
from major distributors mainly Warner brothers, 20th century fox, united international
pictures, small wonder then that the cinema has become the focal point for
entertainment in the capital for both the young and old attracting over 30,000 patrons
a week. Infact, Speed set a national box office world record of Rs.785000 in its first
week of screening at PVR (the highest ever for an English film), which is remarkable
considering the relatively low price of a cinema ticket in India.
Buoyed by the overwhelming success of the cinema after upgrading, Priya exhibitors
ltd have taken he next initial step for setting up the first multiplex in the country in a
joint venture with Village Roadshow Ltd, Australias leading entertainment
corporation.
PVR is a brand name synonymous with state-of-the-art cinema exhibition in India.
PVR specializes in developing and operating state-of-the-art Multiplexes.
PVR Cinemas are the leading cinemas in the country with an emphasis on design,
technology and service. Over the last three years, PVR has established itself as a very

25

strong brand associated with movies, quality exhibition and youth-targeted

promotions.
The company was conceived as a Joint Venture between the Bijli family, headed by
Mr. Ajjay Bijli as Indian Promoters and Village Roadshow Limited of Australia, one
of the largest multiplex operators in the world with more than 1500 screens under
operation.

PVR IN DELHI

PVR has been a pioneer

in multiplex development by setting up Indias first

multiplex PVR Anupam4 at Saket in city of Delhi. The company has since grown to
become the largest cinema exhibition player in the country and has 5 theatres with 19
screens in city of Delhi/Gurgaon under its operation.
The Cinema can boast of the highest box office collections in India for five
consecutive years since its opening. Located around the Cinema in the same complex
are a number of up-market restaurants, pubs and fast-food eateries that make it a
popular youth hangout place and indeed an entertainment experience for the entire
family.
PVR Priya, a 25-year-old cinema
still considered the best Cineplex in
Delhi, was completely renovated
and brought into the fold of PVR in January 2000.
PVR Priya boasts of the highest box office

26

collections in the city of Delhi after PVR Saket. It also has the distinction of having
the widest screen in India.
Following the tremendous success in South Delhi, PVR expanded to West Delhi in
2001 with the launch of two new multiplexes -- PVR Naraina, and PVR Vikaspuri.
PVR Naraina, with four screens and 830 seats, was launched in August 2001. PVR
Vikaspuri (3 screens, 921 seats) was launched in November 2001.
PVR Group has re-opened one of Delhi's oldest and most popular cinema hall, Plaza;
now known as PVR Plaza. With a seating capacity of 300 seats, the all new single
screen auditorium has been renovated and refurbished to bring back its former glory.
The cinema, unique in its nature, combines the look and feel of the 50s with the stateof-the-art cinema viewing technologies of today.
The most recent addition to the chain is PVR EDM, this three-screen multiplex,
located in the popular East Delhi Mall, is equipped with the state-of-the-art
technology and is one of its' kind in the vicinity.
The three-screen multiplex has a total seating capacity of 723 seats. It is equipped
with the latest THX-approved three-way surround sound system with real life sound
effects and state-of-the-art projection facility with the latest Xenon-based technology.
The stadium seating arrangement ensures unobstructed viewing from anywhere in the
auditorium.

27

PVR IN GURGAON
In May 2007, PVR Cinemas opened North India's largest
multiplex- a 7-screen cinema in Gurgaon. Built over an area of
55000sq ft, this multiplex has an avant-garde lobby with studio
effect interiors and currently offers a seating capacity of 1300
seats. Two luxurious auditoriums called Cinema Europa' have
been custom built with vibrant red, plush reclining seats, double armrests and ample
legroom offering patrons a comfortable and relaxed cinema viewing environment.
The choice of movies played at the Europa are an eclectic mix of tastefully chosen
niche Indian films, internationally acclaimed as well as Oscar winning Hollywood
films.

PVR IN FARIDABAD

In May 2007, the company inaugurated its sixth multiplex, PVR Faridabad. Located
at the popular Ansal Crown Plaza in Faridabad, this two-screen multiplex has a total
seating capacity of 522 seats. It is the first of its kind in Faridabad.
PVR launched its first ever franchised Cinema-PVR SRS in Faridabad. PVR SRS is a
3-screen multiplex that opened to the public on 12th November, 2006. It has a total
capacity of 776 seats..

28

PVR IN BANGALORE

PVR Cinemas has opened India's biggest multiplex (11 screens) in Bangalore. Built
over 1,20,000 sq ft of space, this state-of-the-art multiplex is located in the heart of
Bangalore at the Forum Mall in Koramangla with a seating capacity of 2019 seats.
This multiplex includes two ultra premium cinemas known as the Gold Class and two
luxurious auditoriums called Cinema Europa in addition to seven Classic auditoriums.

29

PVR FIRSTS

First to launch a multiplex in India - PVR Anupam Saket, Delhi

First to launch India's biggest 11 screen multiplex - PVR, Bangalore

First to bring premier movie viewing to India with the exclusive Europa Cinema
and Lounge at PVR Gurgaon

First to introduce Gold Class Cinemas in India at PVR, Bangalore

First to form a foreign joint venture with Village Roadshow, Australia

First to receive institutional funding in the cinema industry - from ICICI Venture

First to offer computerised & online ticketing

First to accept credit cards in cinemas

First to introduce mobile based information & ticketing service

First to launch a loyalty program for movie-goers in India

First to launch 'Movies First' - a monthly magazine that updates the movie lovers
on the latest happenings in Bollywood and Hollywood.

PVR has also ventured into the business of film distribution and set up PVR Pictures,
a fully-owned subsidiary of PVR Ltd. PVR Pictures specialises in acquisition and
local distribution of films.

ACCOLADES
Ajjay Bijli, Managing Director, PVR Limited, was conferred The Theatre World
Newsmaker of the Year Award for 2006'. It is his vision and outstanding contribution
to the cinema exhibition industry that has made PVR the largest cinema exhibition
company in the country today.
PVR Gurgaon was nominated for an award in the Best Retail Environment category
at the Annual Design Week awards.
Ajjay Bijli was also honoured with a special award at Cine Asia 2007 for his
significant contribution to the multiplex industry of India. For the first time, Cine Asia
honoured an Indian exhibitor. He has also been chosen as Signature Youth Icon for
the year 2007.

30

MISSION
A commitment to deliver the best quality cinema viewing Every where, Every time.

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.

PORTERS FIVE FORCES MODEL

BUSINESS MODEL
Service Model No Real Estate Investments
Hedged on Real Estate

Rentals: Lower fixed rentals, due to advantage of

anchor tenancy in a Mall and in a few cases revenue
linked variable rental
Better Lease terms due to recognition as anchor

Anchor Tenant in FECs

tenancy
Enhanced Footfalls
Ticket Sales

Widened basket of revenue Streams

Candy Sales
Corporate Alliances, Sale of Media spaces

Minimizing real estate risk and Maximizing services

31

RELATIONSHIP WITH VILLAGE ROADSHOW

In 2006, Village Roadshow was undergoing a strategic and business restructuring

worldwide. As part of their worldwide strategy, they decided to concentrate on the
Production business and on Exhibition business only in those territories where they
have majority control and have the critical mass of screens. In line with this strategy
they exited from almost 20 countries worldwide, including India.
Village Road shows inability to support the growth plans of PVR, the Indian
promoters offered to buy out the Village stake and the joint venture was mutually
decided to be terminated in June 2007. However, though Village Road show exited as
a joint venture partner, the excellent relationship between both companies continues
and is reflected by the fact that PVR continues to have an exclusive long term
technical and marketing services arrangement with its erstwhile partners on a long
term basis.
During the 5 years of joint venture with Village, PVR was exposed to best business
and operational practices in the Cinema Exhibition industry and was able to
revolutionize the way to go to cinemas.

32

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.

COMPANY

No. Of

No. of screens

No. Of seats

PVR
Inox Liesure
Adlabs Films
Srinagar Cinema
Wave Cinema
E City Entertainment
Total
% Of all India

Properties
7
5
4
3
3
3
25
34%

34
25
14
14
13
14
114
41%

7,333
7,344
5,666
4,588
4,380
3,952
33,263
37%

Multiplexes

33

MAJOR COMPETITORS

DT CINEMAS
The DLF group, one of the largest real estate cos with a turnover of Rs.1000 crores.
DT cinemas are set with its first multiplex at the DLF city center in Gurgaon started
on 7 mar 2007.
Spread over 3 lac square feet on mg road, city center is Gurgaons first multiplex,
covering 48000 sq ft, hosts 3 screens and can seat upto 1100 people
Has imported state of art projection systems in the world Offers telephone, net and
SMS booking home delivery facility 2 Gurgaon, Delhi and other NCR regions.
DT Cinemas has also tied up with Wow, a telemarketing outfit for phone bookings
and almost 5 per cent of their total bookings come through the phone.

34

DT CINEMAS IS PLANNING TO ADD A CRECHE FACILITY TO

ITS GURGAON PREMISES SOON.
SATYAM CINEPLEXES
Satyam Cineplexes is part of the Superior Group. The Superior Group has interests in
Garment, Candles, Handicrafts, Film Distribution and Cineplexes. Satyam complexes
with its state of the art cinemas has brought to India, for the first time, the best in class
cinema entertainment that the world has to offer. With the launch of the Satyam
Cineplex in Patel Nagar and two cineplexes at Janak Place and Nehru Place currently
under construction, Satyam Cineplex is poised to become a leading Multiplex
operator in India with a capacity of 5000 seats.
Satyam CEO Deven Chachra: We plan to develop a The group currently owns 3
prime sites in New Delhi namely Janak Place, Patel Nagar and Nehru Place with
many more prime sites under negotiation. The group has a plan to add at least 2-3
sites every year on a rolling programme. By March 2007 Satyam will be running 16
screens at 4 sites with a total of more than national chain of multiplexes. We will
develop properties in Mumbai and Pune in the next 18-24 months. Bangalore and
Hyderabad will be covered in 2007. Initially, our focus would be to consolidate in
Delhi, Chandigarh and Uttar Pradesh to leverage Satyams distribution edge.
The new expansion project follows from the finalizing of the Rs 82-crore project,
which includes revamp of an existing cinema hall (already operational) in Delhi, and
development of two more multiplexes in the Capital.
In total Satyam has three cineplexes in Patel Nagar, Janak Place and Nehru Place, in
Delhi

35

PROMOTIONS
Recently, Jaypee Siddharth tied up with Satyam Cineplexes with an aim to provide
some exciting and innovative packages. Under this scheme, guests can enjoy and
savour a whole host of privileges. To begin with, any guest whose bill in any of the
restaurants of Jaypee Siddharth is Rs 2,000 and above will be entitled to two tickets at
Satyam. Further, this promotion works both ways. If any guest who presents a ticket
stub of Satyam Cineplex (the ticket stub should not be very old) at Cooks Cafe at
Jaypee Siddharth will be entitled to a soup and dessert, provided the guest in question
buys a full meal at the outlet.
On weekends, there is a special buffet spread for ticket stub holders (afternoon and
evening show audiences) of Satyam who will be entitled to have this buffet at Cooks
Cafe at a discounted rate of Rs 500 for a couple. The normal buffet price at the hotel
is Rs 469 per person, plus taxes.
Another unique promotion is titled Siddharth on Wheels. This scheme is valid for
evening shows only and under this scheme cine-goers can order for food at Jaypee
Siddharth before they go to Satyam to watch the 6 pm show. Mr. Kapila assures us
that hot meals would be at the doorstep when the family returns home after watching
the movie. This meal costs RS. 150 per person.
Caf Coffee Day, a leading national retail chain of cafs, as part of its 2nd anniversary
celebrations in New Delhi kicked off a car grand rally in association with Satyam
Cineplex and others. The rally ended at 11am at Satyam Cineplex Caf where the
prize distribution was held.

36

Satyam cineplexes launch party at cinemas rock music performance by Black

Slade.

3Cs
The Rs 450-crore Competent Group of Companies, engaged in the business of
automobile dealership, construction and film distribution, decided to diversify into the
development of a chain of cinema theatres under the brand name 3Cs (implying
Competent Cine Court). Beginning with Delhi, the
company will set up 3Cs in Lucknow and Amritsar
in the short term.
The cineplexes come under the brand name 3CS,
which stands for Competent Cine Court. The first of these cineplexes cum food
plaza is already operational at Lajpat Nagar in Delhi since October 2006 and the
group has invested nearly Rs 20 crore in this project. Its a 325-seater, single-screen
cinema hall with a six-brand food court. The project is said to have been financed by
group internal accruals.
3Cs six food retailing brands (roped in through strategic alliance) in the Food Court
are: McDonalds, Barista, Chopsticks Express, Diva Cafe, Tikk-A-Wrap (London) and
Dosa Express (Sri Lanka).
Competent Group of Companies chairman and managing director Raj Chopra: 3Cs
proposition is to offer a combination of good food and good entertainment under one
roof. The Food Court concept allows different members of family to opt for different
kind of food from the best brands under one common dining space
The Group now plans to set up more such cineplexes cum food courts at Ludhiana,
Jalandar, Amritsar and Chandigarh over the next 2 years.

37

WAVE CINEMAS
Wave cinemas were launched on the 27th September 2006.
Wave is located at KAUSHAMBI (U.P.) East End Mall and NOIDA (U.P.) Sec-18
Center Stage Mall, known as Wave Shipra

TICKET RATES ARE

For KAUSHAMBI weekday ticket costs Rs.100 and weekend costs Rs.120
For NOIDA weekday ticket costs Rs.120 and weekend costs Rs.140
KAUSHAMBI wave plays only Hindi movies, whereas the one in NOIDA plays all
Hindi and English movies. The two wave cinemas have 4 screens each with a Seating
capacity of 250 seats per screen; hence at any point of time 2000 people can watch the
movie.
The seats are very comfortable and have a larger leg space than any other cinema hall.
Wave Shipra (NOIDA) even has a platinum lounge for which the rate per seat is Rs.
500, in which eatables and beverages worth Rs. 200 is served free. There are 34 seats
providing this platinum experience. It has seats like any comfortable sofa at your
home. It has a very good ambience attached to it.

THREAT OF SUBSTITUTES
Threat from other sources of entertainment
In addition, 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 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 antipiracy 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
38

on the companys revenues and results of operations. Television is expected to grow

at a faster pace than cinema.

39

THREAT OF NEW ENTRANTS

Costs of setting up a multiplex in India are coming down

It can takes around Rs 40-50 crores to set up a premium five-screen multiplex in a

metro while the same in a smaller town costs between Rs 10-15 crore.
But owners are now realising that if done right, a stripped down multiplex can be set
up much cheaper. Typically, fit-out costs (cost of doing up the interiors) range
anywhere between Rs 2 crore to Rs 2.75 crore per screen.
Owners have realized that cutting down on the fancy stuff could bring down costs
by half. DT Cinemas is toying with the idea of setting up low-cost variants in smaller
cities, like Nagpur or Nashik.

Though regulations maintain pressure on the compliance costs

The Indian film exhibition sector is currently regulated by a numerous laws some of
which were written at a time when Multiplex Cinemas were not common and hence
these laws may not necessarily be relevant for Multiplex Cinemas. Some of the
provisions of these laws include:
1. Requiring a minimum distance between the screen and the front row seats, which
distances were set based on large screens used in single-screen cinemas and not
the smaller screens used at most Multiplex Cinemas.
2. The permissible pressure at which the electrical current may be supplied to a
projector, which provision does not reflect the technological advances in respect
of Multiplex Cinemas.
3. The reservation of playing times for a scientific film, educational film, news reel
or documentary.
4. Restrictions on ticket prices in certain states.

40

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 distributors 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 Cs, 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.

41

PVR cinemas is trying to penetrate into existing markets. It is also expanding its reach
across new markets. PVR has diversified into film distribution and set up business
and came out with their own film magazine.

42

MARKET PENETRATION AND DEVELOPMENT

Beyond the existing markets, PVR is contemplating implementing new multiplex
projects in Delhi, NCR, Mumbai, Hyderabad, Bangalore and Indore.

UPCOMING LOCATIONS

43

DIVERSIFICATION
PVR has also ventured into the business of film distribution and set up PVR Pictures,
a fully-owned subsidiary of PVR Ltd. PVR Pictures specialises in acquisition and
local distribution of films. This is a strategic business unit aimed at solidifying PVR's
exhibition growth and strength. To date, PVR Pictures has successfully released films
produced by US-based production house Miramax such as Chicago . PVR Pictures
has also signed a 50:50 joint venture with Ram Gopal Verma's Verma Corporation
Limited/ K Sera Sera's production company Factory'. The new venture, titled
PVR/Factory' operates under the PVR Pictures entity and has exclusive distribution
rights in Delhi, Uttar Pradesh and Uttranchal.
44

PVR Cinemas has also come out with a film magazine. PVR Movies First, as the
magazine is called is the latest addition to PVR's big bouquet of offerings in the
movie entertainment business. It is a monthly magazine and is expected to fulfill the
information needs of the die-hard movie fans. Beginning with New Delhi, the
magazine will be available in all multiplexes and cineplexes operated and managed by
PVR across the country. The editorial content of the magazine is being managed by
the India Today Group, which publishes magazines like Business Today, India Today,
India Today Plus and also the Indian edition of the Cosmopolitan.

45

SEGMENTATION, TARGETING AND POSITIONING

SEGMENTATION
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

46

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

CONSUMER PSYCHOGRAPHIC SEGMENTATION

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

CONSUMER BEHAVIORAL SEGMENTATION

Usage rate: 1/3 of the population attends the movies one or more times per month.

47

WHAT?
What benefits that the customer seeks? Complete movie-going experience.
Factors influence PVRs demand? Price, movie, day, time of the day, day of the
week, month etc.
What function can the product perform for the customer? Entertainment.
What are the important buying criteria? Price, ambience, placement, quality service,
premium positioning, status symbol.
What risks does the customer perceives risk of being overcharged, risk of being in
an emergency like fire at the theater.

HOW?
How does customer buy the product? Online / Telebooking / In person
How long does the buying process take? Simple and prompt
How do the various marketing mix elements influence the customer at each stage of
buying? (Explained later in the report)
How does product fit in to their lifestyle? Entertainment product for the premium.
How much would they be willing to spend? PVR had started with tickets being
priced at Rs 125 with special counters available for tickets worth Rs 7. Even when all
tickets are now priced at Rs 145, there is no change in the amount of customers that
PVR receives, which means that people are willing to pay.
How much do they buy in one transaction? Almost always more than 1 ticket.
Depends upon the person, movie playing.

48

TARGETING
PVR being the first of its kind has always been a market leader and therefore its
offering to the customer is Innovative.
PVR has premium pricing and they target mainly SEC A and SEC B. PVR has
brought to its customers the experience of Luxury Cinema. PVR uses the concentrated
method as they have target a much focused audience out of he entire masses.
PVR witnessed tremendous success Europa Lounge in Delhi. PVR Cinemas has also
recently introduced the concept of luxury viewing to Bangalore. Gold Class Cinemas
have been introduced for the first time in India, are two ultra luxurious exclusive
auditoriums, each equipped with 32 plush and fully reclining seats and generous
legroom. Patrons can also enjoy star like treatment at the exclusive Gold Class lounge
which provides an excellent pre cinema experience with scrumptious food and
beverages
PVR Priya of PVRs chain use Differentiation method for pricing.
It practices different price slabs for different target audience. For instance, they have
tickets ranging from Rs 45 (for the youth) to Rs 140 (for the upper class i.e. SEC A).

49

POSITIONING
PVR had, and still has a very well planned market position. Its premium positioning
affects the customers perceptual positioning. Therefore, they decided on their
marketing strategy and pricing, keeping the target market in mind. In case of PVR,
they make use of all their tangible elements to prove to their customers that their
movie tickets are worth the price they are paying. Also, since some of the other movie
theatres (which are not multiplexes) are still offering movies at rates as low as Rs 35,
it is the task of its marketer to ensure that PVR comes across as a superior brand in
terms of cinema viewing as well as the experience. Its positioning is evident in its
mission statement also which says
A commitment to deliver the best quality cinema viewing Every where, Every time.

50

MARKETING MIX 7 Ps
SERVICE PRODUCT/ SERVICE PACKAGE
A product (in the marketing context) may be tangible, intangible or both. In case of
services, on the contrary, the tangible component is nil or minimal. In services, there
is no or very little tangible element because of which they are considered as benefits,
which are offered to the target market. First, a service is a bundle of features and
secondly, there benefits and features have relevance for a specific target market.
Therefore while developing a service product, it is important that the package of
benefits in the service offer must have a customers perspective. 5 product levels are as
follows:
Core Benefit is the MOVIES that the customer comes to a cinema hall for, along with
the attendant experience of PVR. The expected product in PVRs case would be
ambience, hygiene, good service, parking, candy bar etc.
PVR has augmented its product offerings:
Luxury cinema
PVR has brought to its customers the
experience of luxury cinema. After the
tremendous success of Cinema Europa
in Delhi, PVR Cinemas has introduced
the concept of luxury viewing to
Bangalore as well. Gold Class Cinemas
have been introduced for the first time
in India, are two ultra luxurious exclusive auditoriums, each equipped with 32 plush
and fully reclining seats and generous legroom. Patrons can also enjoy star like
treatment at the exclusive Gold Class lounge which provides an excellent pre cinema
experience with scrumptious food and beverages.

51

Parties at PVR
PVR has also started helping customers in planning birthday/kitty parties at PVR.
They have made PVR a wholesome entertainment experience than just a movie
watching spree.

MOVIE NEWSLETTER AND MAGAZINE

To keep its customers hooked on to movies and to PVR, it has also come out with an
online newsletter called PVR Wire is directly mailed to the subscribers and can also
be downloaded from their website. They have also launched a movie magazine called
Movies First.

52

MOVIE VOUCHERS
They have also taken out the unique concept of movie vouchers which people can use
as gifts. Many
corporates
have
started

also
using

these

as

incentives and
rewards

for

their
employees.
The vouchers are available in denominations of Rs 100 to Rs 350 and a minimum of
25 coupons needs to be purchased to avail of the offer.
The following options are available in Delhi/NCR
The Delhi PVR Movie Money Voucher costs Rs 150/- and is valid right through the
week across all cinemas (except PVR Gurgaon - Cinema Europa)
PVR Gurgaon (Cinema Europa) PVR Movie Money Vouchers cost Rs 160/The following options are available in Bangalore
Classic Mon -Thur : Rs 100/All Week (including Weekends) : Rs 130/Europa

Mon -Thur : Rs 130/-

All Week (including Weekends) : Rs 150/Gold Class

All Week (including Weekends) : Rs 350/- + Rs150/- for food

beverages (optional)

53

and

THE SERVICE PACKAGE

The package concept of services product suggests that what you offer to the market
is a bundle of different services, tangible and intangible, but there is a main or
substantive or core service and around it are built the auxiliary/peripheral/facilitator.
It is important to note that facilitating 3services ate mandatory and if these are left out,
the entire service would collapse. Yet another type called supporting services, dont
facilitate the consumption of core services but are used to increase the value and thus
differentiate from the competition.

QUALITY ASSESSMENT THROUGH RATER IN CASE OF PVR

Focused on developing a procedure for quantifying customers service quality can be
measured in following dimensions:
Reliability Ability to perform promised service dependably and accurately.
PVR is a very well established brand name, and the audience is given excellent
experience of the basic product i.e. the movie as well as the other elements involved.
Hence, it is very much capable of good delivery of the service it provides. There is no
flaw in the quality of the service and is always delivered on time.
Assurance Knowledge and courtesy of employees and their ability to convey truth
and confidence.
Since PVR is a high contact organization, the employees are well trained in all areas
regarding customer interaction and courtesy. PVR movies being a service, heavily
relies on its employees, as they are the only mode of direct communication made with
the customers. They are well trained and are definitely able to convey the confidence
that the brand name represents.
Tangibility Appearance of physical facilities, equipment, personnel etc
PVR movies have a lot of tangible elements present like the employees (staff), the
movie halls, the candy bars, rest rooms etc, all of which are highly maintained and
well kept.

54

Empathy Caring, individualized attention to the customer.

Even though in a service like this customization is not possible, the employees of
PVR Cinemas are always very helpful and provide the customers with good assistance
whenever needed. From the employees made to sit at the ticket counter to the
employee that guides customers to their respective seats in the cinema hall, all
employees deliver a very helpful attitude towards the target audience.
Responsiveness Willingness to help customer with prompt service.
The employees of PVR are fast and prompt at delivering their service and are taught
to cause as less inconvenience as possible to the customers. If a customer places an
order via telebooking / online reservation etc, the delivery of the tickets is made well
before the show timing at the customers doorstep. The employees are well trained.

PRICE
To many customers, high price means high quality. Services pricing follows the price
and practices of pricing of goods and therefore are either cost based or market based.
Within these, categories of price may be profit oriented, government controlled,
competition or customer oriented. But the characteristics of services do influence the
pricing and therefore different methods of pricing are followed in their case.
PVR when started off had a huge advantage of being the only one of its kind in Delhi
to begin with. Therefore, they could charge a higher amount to its target audience, as
they did not hesitate to pay the sum for the new concept. This high pricing helped
them make maximum gains. Also, PVR had, and still has a very well planned market
position. Its premium positioning affects the customers perceptual positioning.
Therefore, they decided on their marketing strategy and pricing, keeping the target
market in mind. Hence, we may say that the pricing as well pays a strategic role in
their marketing plans.
In case of PVR, they make use of all their tangible elements to prove to their
customers that their movie tickets are worth the price they are paying. Also, since
some of the other movie theatres (which are not multiplexes) are still offering movies
at rates as low as Rs 35, it is the task of its marketer to ensure that PVR comes across

55

as a superior brand in terms of cinema viewing as well as the experience. The movie
theatres market is a Free Market, even though the government in the past regulated it.
This allows PVR as the market leader to set its own prices.
Prices that had originally started from Rs 125 (for evening shows) and Rs 90 (for
morning shows and weekday plans) have increased to a high of Rs 150 and the lowest
is Rs 100. The high pricing however has not led to any change in the footfalls that
PVR gets. Even in slighter crowded shows, the occupancy rates as low as 35%
reaches PVRs break-even points.
PVR Priya has a slightly different pricing system, which varies from Rs 45 to Rs 150
for different slabs of consumers. This has been done to mainly attract the youth and to
keep the concept of movie going still affordable at one of its chains.
The pricing at PVR Europa is Rs 160 and a Gold Class ticket is charged at Rs. 750. It
offers superior ambience, environment, seating, viewing etc in the sum.

PLACE / DISTRIBUTION
Services are generally created and delivered to the buyer at the same time, therefore
creation of time and place utilities is a vital function in services marketing.
Irrespective of middlemen or direct sales channel, the factor of location keeping in
view the potential markets is the most significant in channel selection and
distribution.
The issue of location here plays a very important role, as all PVR Cinema Halls are
stationed at good locations in the city, which gathers a large number of footfalls for
them every day. PVRs usually open at an eventful yet untapped location, followed by
which (as we saw in case of Anupam PVR Saket) other retail chains get opened
around it as well. Their places are always well situated and are well linked. PVR does
not have any other channel of distribution, as their service is sold solely at their
chains. They do not follow any franchisee outlets, even though they indulge in ticket
sales online and via telebooking. The only intermediary involved for procuring
movies are Indian as well as international movie distributors, by way of whom they
acquire the movies.

56

DISTRIBUTION OF MOVIES
The Company has also recently forayed into the Distribution of Hollywood film titles
in the country through its 100% subsidiary, PVR Pictures. By virtue of its strong
brand equity and partnerships with major independent Hollywood studios like
Miramax, Newline Cinemas etc. that are not represented in India through their own
offices, PVR has managed to procure and distribute titles in the country.
With the advent of the multiplex revolution across the country, the company sees a
great opportunity to fill up these upcoming multiplex screens with Hollywood titles.
The company has successfully distributed major Hollywood titles like Rush Hour 2 ,
Wedding Planner , Chicago , Choclat , Spy Kids 2 , Makdee etc.

PROMOTION
Promotion is a very vital part of the marketing mix especially in the case of services.
The customer needs to trust or have belief in the service, as he has to pay for it preexperience. Therefore, it is very important to sell the service in the best possible way.
Usually the objective of promoting a service may be to create a brand image, establish
a personal relationship with the client and to create an impression of competence,
honesty and sincerity to win the buyers confidence in sellers abilities to deliver the
service efficiently. To promote these, the marketer generally employs indirect selling
techniques, as it is usually not possible to use the conventional promotion tools like
advertising. Promotion activities like community relations, event management, media
blitz, corporate identity programs have relevance. 3rd parties like government, unions
and interest groups are important, as they are capable of influencing market access.
PVR as a brand indulges into print advertisements on every Friday giving out the
latest movie schedules. Any new developments are communicated to the audience via
press releases. Hence there is a strong element of PR involved. Apart from that, they
usually have contests pertaining to latest festivals like Valentines Day, New Years
Eve, Oscar Movies Week etc. PVR also has a host of online promotional contests
associated with movies The latest one relates to the film King Kong.

57

They are also in collaboration with cellular services like Airtel have SMS-and-win
contests and give out free tickets to the winners. Also, PVR attracts a lot of
commercial shooting / media coverage via programmes etc which promotes it as a
brand in a big way. Organizing Star Events on Premiers of movies like Kuch Kuch
Hota Hai helps PVR relate better with its target audience i.e. the youth. The whole
PVR banner and its exterior environment including movie hoardings, banners etc help
promote the concept of movie viewing as well as PVR as a strong and successful
brand.
PVR also hosts premiere shows with leading movie stars visiting the various PVR
cinemas. They also host numerous fun events for children while screening animations
etc. Given below are a few such recent promotions:
The star cast of Akbar Khan's resplendent 'Taj Mahal' visited PVR EDM, Naraina,
Vikaspuri and Saket, bedazzling the audiences on 21st Nov'08.

58

 A funfilled afternoon was organised at PVR Saket on 3rd Nov'08 during the show
of animated movie Hanuman. Celebrities were invited with their kids.

PVR organized a rendevous with French Cinema from 21st-27th October 2008. The
glitterati from the film fraternity including Salman Khan,Katrina Kaif and Nandita
Das lit the star studded opening ceremony, along with others as PVR Gurgaon geared
up to host and experience the amalgamation of French movies with the multiplex
magic. It also organizes socially responsive events. It organized a movie screening for
the children of Kutumb Foundation on childrens day. PVR Plaza celebrated the
Rose Day with cancer afflicted patients, on 22nd September '08. The event was held
in alliance with Cancer Patients Aid Association (CPAA). Celebrities like Sushma
Seth, Manpreet Brar, Anita Kaul Basu and Shivani Wazir Pasreecha and Mrs. Celina
Bijli, wife of Mr. Ajay Bijli-MD PVR Cinemas, were present to greet the children and
grace the occasion."

OTHER PROMOTIONS:
This was the challenge thrown at Delhites by PVR Cinemas, a pioneer in multiplex
development and the largest cinema exhibition company in India, and Radio City 91
FM. The response was overwhelming, with over 5,000 Radio City 91 FM listeners
responding to the Challenge. The PVR City Challenge contest, running on Radio City
for two weeks now, dares listeners to send in entries on the wackiest thing they would
do to win a car (Maruti Alto).
In collaboration with MSN, PVR had a contest for Bend It Like Beckham and gave
out 2 free tickets to winners for an entire week.
PEOPLE
EMPLOYEES, CUSTOMERS and OTHER CUSTOMERS
Service must be fully developed and internally accepted before its launched.
Attracting, developing, motivating, retaining employees
Measure & Reward
Offer a vision
Stress team play

Compete in talent
Prepare to 59
perform

Leverage freedom factor

Know the customer

PVR

INDULGES

IN

THE

FOLLOWING

FOR

THEIR

EMPLOYEES:
Complimentary ticket on payment of entertainment tax amount at any point of
time (2 days in advance) to the employees, subject to availability.
Tickets to employees are given for:
1+1 oneself and employees guest
2 for immediate family i.e. parents, spouse etc.
This has been done to encourage movie going among employees as well as
customers.
Gives 10 national holidays to employees
Makes all employees train at different levels from time to time
Teaches employees to be helpful, polite, courteous to all patrons and co workers
enthusiasm and cheerful
Report customer grievances to managers
Strict on rules on no smoking, drinking on job etc.
They are given personalized badges symbolizes that the employees pride
themselves on being a part of the PVR family
Very great importance is given to person hygiene and appearance clean uniform
and shoes.
Not allowed to make a gesture to ask for any sort of a tip / gift from customers.

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 Job performance evaluation at the completion of first 90 days of employment.

They are evaluated once a year on their anniversary of date of joining by
individual superiors and records regarding employees progress are evaluated.
Given bright blue uniforms represents PVR. This is done to ensure uniformity of
appearance and to project a well kept image.
All employees are taught to deal with safety problems like accidents, fire, bomb
threat, armed robbery etc.
Certified first aid course given to all employees
All trainees are made to train at all departments like ticket sales, computer
ticketing, telebooking, sales enquiries, customer service skills, cash handling
sales, credit card sales etc.
Special well kept rooms for the employees
Lastly, it is made sure that all employees represent PVR in the best way possible
and sell it as a strong and well-established brand. All employees are given full
details on what they are representing and informed all about PVR to make them a
part of the family.
On the occasion of Children's Day 2007, PVR created a rememberance for children
from PVR's Housekeeping Attendants, Projectionists, electricians, with the movie
IQBAL.The children from the NGO "Kutumb Foundation" also were an intrinsic part
of the event, invited specially by PVR, to celebrate children's day.

Management Team
The company has a dedicated management team at the corporate level which looks
after each area of its business i.e. programming, marketing & event management,
operations, business development, projects and finance. It has about 30 employees at
the corporate level.
At the cinema level the company has a strong team at each of its cinemas, ably headed
by a Cinema General Manager. He has a team of 50-60 employees at each cinema.
The total employee strength across all cinemas is about 300 employees.
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The company has had a good track record of being able to attract top class
management talent.
For the customers convenience, it is ensured by the organisation that there are no
loopholes. In case of any customer complaints, the employees are immediately
directed to report the same to their managers. The nature of all employees is very
friendly, informed, helpful, reliable, soothing, cheerful and youth-like. Therefore, the
audience can easily relate and communicate with them.

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PHYSICAL EVIDENCE
Though customers cannot see a service, but they can definitely see various tangible
clues of the service offer like facilities, communication, objectives, employees, other
customers, price etc. On basis of these, he forms his opinion as they help us to
tangibalise the service. . Therefore, it is essential to manage physical evidence.
Atmosphere helps to shape opinions. The building, layout, colours of interiors,
tickets, labels, logo of the organisation etc help to formulate a good unified corporate
image / identity.

PHYSICAL ENVIRONMENT

AMBIENT
FACTORS
Air quality
Quality of
scent
Degree of
circulation

DESIGN
FACTORS

SOCIAL
FACTORS

Aesthetics
Architecture,
colour
scheme,
material etc)
Functional
dimensions
of design in
terms of
layout,
comfort etc

Appearanc
e,
Beheviour
and number
of service
personnel
Quality &
quantity of
other
customers

Ambient factors relate to background condition, deign factors, on the contrary are
visual stimuli and social factors relate to interactive environment. The service factor
has an impact on not only the customers, but the employees as well.

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The interior and exterior of the premises is such so as to project a hygienic and wellmaintained image at all times. The administration offices, booking offices, candy
bars, conference rooms, auditorium, foyers, corridors, wash rooms, staircases, walls,
projector room, basement area all coordinated and hygienically maintained.
Both the external and internal ambience is very important and is maintained
excellently, as it is important to appeal to existing and even to the potential customers.
At PVR, it is equally important to keep employees happy. Therefore, even the
employees workplaces in the premises are coordinated with the whole halls
ambience and are lively.
Exterior the movie hoardings, movie schedules, computerized service, glass
entrance, PVR banner, deign of PVR building, parking etc all contribute to the
external environment
Interior Seats, color coordination and combination (blue in case of PVR), hygienic
wash rooms, candy bars, corridors, stairs, sound and visual equipment, design of the
hall, ambience etc are all included here.
Attention to detail and stress on high quality cinema viewing experience is evident
from the unique seating arrangement that ensures unobstructed viewing from
anywhere in the auditorium. Plush, ergonomically designed seats have been installed
to provide flexibility and ultimate comfort to guests.
Convenient cup holders have also been installed on every armrest. Edge to edge
screens and digital sound will contribute in creating the ultimate movie going
experience.
The multiplex has an avant-garde lobby with studio effect interiors. Station
concession counters which offer customers a wide selection of the traditional movie
going fare of sweet and salted popcorn, hotdogs and soft drinks, as well as candy,
nachos, fruit juices and Mineral water.
Peripheral possessed as a part of service purchased e.g. Ticket, popcorn
Core Those that cannot be possessed. e.g. The experience of the movie

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PROCESS
BCG MATRIX
It was the first cinema company to introduce computerized ticketing through use of
international box office software in its cinemas; first cinema to accept credit cards in
India against tickets; and the first to offer cinema tickets on Internet with online
payment gateway for payment. The company had a turnover of Rs 41 Crores in 200102, which is expected to rise to about Rs 60 Crores in 2006-07, and with the growth
envisaged, the turnover in the next 3 years is expected to be over Rs 250 Crores.
PVR was the first to install surround sound and Dolby in Delhi.
Gurgaon 7 screen megaplex is equipped with the latest THX approved sound system
for the real life sound effects and the state of the art Xenon based projection
technology.
SERVICE BLUEPRINTING
Service design is a complex task that can benefit from a more sophisticated version of
flowcharting known as blueprinting.
Developing a service blueprint requires identifying all the key activities involved in
service delivery and production and specifying the linkages between these activities.
A central aspect of service blueprinting is to distinguish between what the customer
experiences front stage and the activities of employees and support process backstage,
where the customer cannot see them. Between the two lies what is called the line of
visibility.
Standards can be set for each service activity but should be based on good
understanding of customer expectations. Below the line of visibility, the blueprint
identifies key actions to ensure that each front stage step is performed in a manner
that meets or exceeds those expectations.
Service blueprints clarify the interactions between customers and employees and how
these are supported by additional activities and system backstage. Because blueprints
show the inter relationships between employee roles, operational process, information
technology, customer interactions, they can facilitate the integration of marketing,
operations, and human resource management within a firm

65

Blueprinting also gives managers the opportunity to identify potential fail points in
the process that pose a significant risk of things going wrong and diminishing service
quality.

BLUEPRINTING THE PVR EXPERIENCE

To illustrate blueprinting of high contact, people processing pvr service, we examine
the experience of watching a movie in pvr that enhances its core movie service with
variety of other supplementary services.
The key components that we will include in pvr experience blueprint:
1 Script for each front stage activity
2 Physical evidence for front stage activities
3 Line of interaction
4 Front stage actions by customer-contact personnel
5 Line of visibility
6 Backstage actions by customer contact personnel
7 Identifying failure points

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67

CHAPTER-4
FINDING ANALYSIS
1. Frequency of watching movies.
STP ANALYSIS

No. Of

Percentage ('x)

Respondents

Once a month

87

42.4

Once a week

54

16.4

Fortnightly

32

15.6

Others

32

15.6

Total

205

100

42.4% of respondents watch movies once a month

2. Place of watching movies.

Rank

Theatre

VCD/DVD

Cable

108

50

48

49

73

81

47

82

76

Total

205

205

205

Rank

Theatre

VCD/DVD

Cable

Majority of respondents usually watches movies in the theatres.

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3. Usually watch movies with: -

No. of

Percentage (%)

Respondents

'

Friends

112

54.6

Family

64

31.2

Spouse/GF/BF

20

7.8

Alone

4.4

Total

205

100

Majority of respondents usually watches movies with their friends.

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SWOT ANALYSIS
STRENGHTS

First mover advantage in the multiplex business in India

Updated technology

Premium positioning

Plays Hindi, English, Regional & foreign movies

Locational strength

Ambience

Started the concept of a complete movie going experience

Market leader

Very strong brand equity

TOM recall

Original multiplex

Blend of retail & entertainment

WEAKNESSES
High cost perceptions
T.A very specific (not mass service)
Disjointed images for all PVR properties
Customer retention
Parking problems

OPPORTUNITIES
First mover advantage
Growing family spendings on entertainment
Large film industry over 200 hindi films every year
PVR loyalists

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71

THREATS

Competition blooming large

Governments interference

Entertainment Tax

Other Multiplexs as competition

Other ways of entertaingment

Accused of increased crime rate

PiracyNo control over surroundings eg. West Delhi

Movies becoming bigger than the brand

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73

INADEQUATE NUMBER OF SCREENS

In India, the number of screens per million of population is just 12 whereas the
average in western countries is approximately 40.

CONCENTRATION OF CINEMAS IN SOUTHERN INDIA

Southern India accounts for a majority of the cinemas in India. Andhra Pradesh
has the most number of cinemas in India followed by Tamil Nadu, Kerala and
Karnataka. Whilst Southern India accounts for the majority of all cinemas in
India, as of March 31, 2007, only five out of 73 multiplex cinemas in India were
in Southern India.

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MAJOR PLAYERS IN INDIAN FILM INDUSTRY

Indian Film Industry

Players

Production Distribution Exhibition

Zee Telefilms

Adlabs Films

AVM Productions

Mukta Arts

Rajshri Productions

Shringar Group

PVR Cinemas

Pritish Nandy
Communications

July 2005

Present

Not present

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PEST ANALYSIS
ECONOMIC

The Indian Entertainment Industry is one of the fastest growing sectors of the Indian
economy riding on the economic growth and rising income levels that India has been
experiencing in the past few years.
The entertainment industry is expected to grow faster than GDP growth and
consequently more spend is expected on leisure and entertainment.
The film segment will ride on the growth of multiplexes and digital distribution
formats. 18% year-on-year growth is expected in this segment. There are 73
multiplexes in India, with 276 screens and about 89,470 seats. The numbers are
expected to increase to 135 multiplexes with more than 160,000 seats by the end of
2007.
In India the multiplex business is modeled to the ones in developed countries. The
main revenue stream is box-office collections from movies. Other revenue streams
include rent from display systems, restaurant rentals, food and beverage collections,
product launch rentals and promotions by companies. In several cases the other
revenue streams are often larger than box-office collections, but movies are the main
pull of such complexes.

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INCREASE IN DISPOSABLE INCOME IN THE HANDS OF AN

EVER EXPANDING INDIAN MIDDLE CLASS
Multiplex Cinemas generally cater to middle and high income households. The
emergence of the Indian middle class with greater earning power and a higher
disposable income is one of the key factors that will drive the growth of the Multiplex
Cinema segment. The table below shows the growth in the number of middle and high
income households in India.
Because of Indias status as a good IT hub for outsourcing by U.S. companies, young
Indians between 20 to 24 years old, who ordinarily wouldnt be able to find work
easily, are finding jobs with call centers straight out of college. Now they have
disposable income thats totally discretionary and about 20 to 30% higher than
prevailing wages, which they are spending on books, movies, music, cell phones, food
and brand-name clothes

From 1999 to 2003, the average Indian household increased its spending
onmovies and theatre as a percentage of its disposable income from 1% to 4.6%.

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CHPTER-5

RECOMMENDATIONS
TECHNOLOGICAL INNOVATION
When PVR came into being it was at the forefront of the technology involved in the
Movie business but now much more has been done in this field and PVR needs to
keep up. Like the IMAX theatre that Adlabs has introduced, PVR should also foray
into new technological advances in the entertainment business.

ONCE INSIDE...SERVICE MUST MATCH THE PRICE

CHARGED
Many of the audiences feel that some of the services inside do not command the
prices that is charged for them, example, even the first two rows in the theatre
command a price of Rs. 150/-. Most people feel that a lesser price should be charged
as sitting too close to the screen is not as good an experience as sitting in one of the
back rows.
Also the prices charged at the food and beverage counter are way above the MRP,
which we feel is an undue premium that is being charged.
A lot of audiences that were interviewed feel that the leg space in between the rows is
less and it makes the audience uncomfortable after sometime.

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We as a group also feel that introduction of a food court that has a variety of
offerings, not just snacks but wholesome meals as well would greatly improve the
movie going experience as people would spend greater amount of time in the theatre
and the food court could work as an ancillary to the theatre.

EXPANDING REACH
Once a movie is past its prime and running in the second or third week where sales
are low, PVR could do promotional campaigns and reduce the prices marginally for
one show a day. This would encourage more people to experience the PVR
experience, especially those that are inhibited by high prices. For eg. Special
promotional campaigns for students for instance could help in attracting the vast price
sensitive student audience. Such promotions could happen once or twice a month
without diluting the superior brand image.

RIDING HIGH ON SPORTS

Cricket is an obsession in India. PVR could capitalize the same by screening hot
matches live for eg. A crucial India Pakistan match, World cup semi-finals/finals etc.
The growing popularity of soccer and other sports can also be tapped. This would be
an instant hit even at very high prices charged. To add on to the excitement they could
couple this with cricket contests and give prizes like paraphernalia with autographs of
eminent sportspersons.

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CHAPTER-6
CONCLUSION
In order to encourage investment in the film exhibition sector, many state
governments have announced policies offering entertainment tax benefits. This has
encouraged the growth of Multiplex Cinemas and also encouraged single-screen
theaters to convert into Multiplexes. The quantum of entertainment tax benefit which
may be available in each state is different and the availability of these exemptions
would be dependant on compliance with certain conditions specified by the relevant
state.
To counter this issue of low first instance release, digital cinemas are being opened in
B and C-class centres in India and movies are being released in those cinemas at the
same time as movies are released in the A-class centers. Digital copies of films cost
significantly less than film copies (approximately Rs. 3,000 for digital compared with
Rs. 70,000 for film) and the cost of digital projection equipment being used in India is
also significantly less than that of film projection equipment (approximately Rs.
800,000 for digital compared with Rs. 1.5 million for film).
PVR has been largely successful in maintaining this balance of the economic
feasibility of providing world class entertainment standards of cinema in India. They
were the first to introduce the concept of Multiplexes cinemas in India and even today
PVR is the clear leader in this segment, with its multiplexes spanning across 20 cities
in India

The present scenario is that PVR Cinemas offers entertainment at modest and
economic prices with world class entertainment facilities in India and has brought
about a revolution in Indian cinema, through excellent planning and implementation
of strategies decisions taken by its CEO Sanjay Bijli.
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BIBLIOGRAPHY

BOOKS
1. Aitkin and Goodman, Personal Financial Planning , Financial Planners USA, 2000
Edition, 2008 Reprint
2. Sangeeta arora., Marketing of financial services
3. Gupta C.B. (2009). Organizational Behaviour Paperback. New Delhi

INTERNET WEBSITE
www.peeplo.com
www.pvrcinemas.com
www.mybangalore.com

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