Project Report of PVR Group

Table of Contents

Sr. no 1 2 3 4 5 6 7 8 9 10

Topic Entertainment and Media Industry Pest Analysis Industry Competitors PVR and Subsidiaries Swot Analysis Porter Five Forces Marketing Mix STPD Analysis Promotions of PVR Cinemas Financial Performance

Page no 1 3 4 5 15 17 20 24 27 28

Entertainment and Media Industry

Indias Entertainment & Media sector to continue its double digit growth trajectory in 2011. The industry is expected to touch Rs 1199 billion growing cumulatively at 13.2% CAGR to 2015. Indian E&M industry recorded one of the highest growth rates in the world growing at 11.2% in 2010. This was largely due to rebound in consumer spend, advertising spend and most importantly in the E&M spend. The industry grew a little slower than expected largely due to the downturn in the film segment. All the other segments grew as predicted. Outlook for major segments are as follows: Television: The sector is projected to command half of the entertainment pie by 2015 as it is estimated to grow at a 14.5% cumulatively over the next five years, from an estimated INR 306.5 billion in 2010 to INR 602.5 billion by 2015. Film: The sector is projected to grow at a CAGR of 9.3% over the next five years, reaching INR 136.5 billion in 2015 from the present INR 87.5 billion in 2010. Print media: The sector is projected to grow by 9.6% over the period 2011-15, reaching INR 282 billion in 2015 from the present INR 178.7 billion in 2010. Radio: The sector is projected to grow at a CAGR of 19.2% over 2011-15, reaching INR 26.0 billion in 2015 from the present INR 10.8 billion in 2010. Music: Due to the increase of the mobile VAS market, the sector is projected to grow at a CAGR of 17.6% over 2011-15, reaching INR 21.4 billion in 2015 from INR 9.5 billion in 2010. Internet advertising: With rebound in overall advertising, internet advertising too is projected to grow by 25.5% over the next five years and reach an estimated INR 24.0 billion in 2015 from the present INR 7.7 billion in 2010. Out of home (OOH): The estimated size of Out of home (OOH) advertising spend is INR 14.0 billion in 2010, which is projected to reach INR 24.0 billion in 2015. Animation, gaming and VFX industry will continue to maintain its growth pace and is projected to grow at a CAGR of 21.4% to INR 82.6 billion in 2015 from its current size of INR 31.3 billion.

PEST Analysis for PVR Cinemas

Economic Factors
Increase in disposable income in the hands of an ever expanding Indian middle class Earning of revenue from sources other than only movies in the theatres. 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.

Social Factors
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. Multiplexes not only increased the number of available screens, but also provided them with excellent acoustics and enhanced picture display. Increase in Number of High Grade Hindi Films

Political Factors
Several state governments provided incentives to encourage the growth of multiplexes. A positive concession given to the cinema theatre industry in 2002/03 was the deduction of 50 to 100% of the profit earned by multiplexes that came to them in the next two to five years. 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

Technological factors 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. 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 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.

Industry Competitors

PVR Cinemas

Big Cinemas : Division of Reliance MediaWorks Limited 516 screens spread across India, US and Malaysia. Imax, 3D and 6D technology

Inox Cinemas : Diversification venture of the INOX Group into entertainment. 30 multiplexes and 109 screens in 21 cities.

Cinemax: Largest Multiplex chain in Mumbai. First to Introduce Red Lounge Luxury Viewing experience catering to Niche audience Mumbai centric approach

Fun Cinemas : Promoted by the Essel Group, the company has about 140 screens across India

Shringar Cinemas : oldest and wellMumbai region AA Films Pyramid Saimira

known brands in the

UFO Movies

About PVR and its SBUs

PVR Ltd. was incorporated in April 1995 pursuant to a joint venture agreement between Priya Exhibitors Private Limited and Village Roadshow Limited, one of the largest exhibition companies in the world. PVR pioneered the multiplex revolution in the country by establishing the first multiplex cinema in 1997 at Saket, New Delhi. The opening of the first multiplex heralded a new era in the Indian cinema viewing experience and which also changed the industry forever. From then on PVR initiated many path breaking innovations in the industry from launching in Bangalore the largest 11 screen multiplex in the country in 2004 to introducing Gold Class Cinema. PVR also entered into a JV with Major Cineplex Group in 2008, a leading Film exhibition and retail entertainment company based out of Thailand, to bring lifestyle entertainment concepts to Indian consumers. The Joint Venture enjoined setting up of bowling alleys, karaoke centers, ice skating rinks and gaming zones across the country to enhance the out of home entertainment experience for Indian consumers. The company has four subsidiaries namely CR Retail Malls (India) Pvt Ltd, Sunrise Infotainment Pvt Ltd, PVR Pictures Ltd and PVR bluO Entertainment Ltd. The company operates a film distribution and production business through their subsidiary, PVR Pictures, which acquires and distributes Indian and international films. The PVR cinema circuit in India consists of 35 Cinemas with 154 screens spread over 20 different cities covering major markets across the length and breadth of the country: Delhi, Faridabad, Gurgaon, Ludhiana, Ghaziabad, Mumbai, Bangalore, Hyderabad, Chennai, Lucknow, Indore, Aurangabad, Baroda, Allahabad, , Ahmedabad, Udaipur, Chandigarh, Surat, Latur and Raipur. In 2011 the PVR brand has been successful in entertaining more than 19 million esteemed patrons across its properties. Currently, PVR Cinemas contributes 20-25% of domestic box office collections of any leading Hollywood movie and 12-13% of any leading Bollywood movie, highest across the Indian Film Exhibition space. PVR Ltd has established itself as India's leading and most premium entertainment company, with presence in the entire value chain with leadership position in Film Exhibition, Distribution and Production. It has also successfully forayed into retail entertainment formats such as bowling Centres with BluOIndia's largest 24 lane bowling centre which was set up in Gurgaon in 2008. The company also operates a film distribution and production business through PVR Pictures, a 100% subsidiary of PVR Ltd. The movies co-produced by PVR Pictures include "TaareZameen Par", "JaaneTuYaJaane Na", "Aisha" etc. Apart from the movies co-produced, some of the other movies distributed by PVR include "Ghajini", "Golmaal Returns", "Sarkar Raj", "Lions of Punjab", "Tum Mile", "Aviator", "Chicago", "Hannibal Rising", "Don", Twilight Series", " Action Replay" to name a few.

PVR Pictures, the film distribution and production business arm of Ajay Bijlis PVR Limited, is launching a new division called Springboard for distribution of specialized, independent films. PVR, in order to solidifying its exhibition growth and strength also ventured into the business of film distribution, set up PVR Pictures, a fully-owned subsidiary of PVR Ltd. PVR Pictures, a strategic business unit, specialises in acquisition and local distribution of films. The company in order to fuel its charted expansion plans has recently listed itself on the stock exchange raising Rs. 150 crores from the market. 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

Our Competitive Strengths Our cinemas are in prime locations Our cinemas are in prime locations, with large catchment areas, surrounded by a good mix of retail and food and beverages outlets and with adequate car parking facilities, making them attractive destinations. We are considered a preferred anchor tenant and have strong relationships with mall developers We are considered a preferred anchor tenant by shopping mall developers because our Multiplex Cinemas generate significant footfalls. Our presence in a development helps the developer to market the mall to other retail businesses. As a result, we are able to obtain prime locations for our Multiplex Cinemas on attractive terms.

Strong relationships within the film industry Our position as the largest Multiplex Cinema operator in India, our transparency in reporting box office collections and our emphasis on film marketing have helped us to build strong relationships within the film industry, both Indian and Hollywood, enabling us to obtain an assured supply of films at competitive rates. Largest Multiplex Cinema operator in India As the largest Multiplex Cinema operator in India, we are able to reap the benefits of economies of scale for our operations. We obtain discounted rates on our capital equipment, food and beverage supplies and for advertisements in newspapers. The size and geographical spread of our cinemas enables us to offer a wide cinema footprint to advertisers and sponsors. Strong brand equity
Our brand, PVR, is one of Indias most recognized film exhibition brands. Our cinemas have been designed with an emphasis on ambience and customer delight, with quality fit-outs, comfortable seating and state-ofthe art audio and projection equipment. This coupled with our customer-focused approach has made our brand name synonymous with high quality cinema viewing in Delhi, Gurgaon, Faridabad, Ghaziabad and Bangalore. This has positioned us an exhibitor of choice for movie patrons, enabling us to maintain stable occupancy rates at ticket prices that are significantly higher than the industry average. Our strong brand equity has also allowed us to enter into corporate alliances and co-marketing exercises with leading companies such as Pepsi, Samsung, Hero Honda, Hyundai, LVMH, Airtel, Master Card, LG Electronics, Nokia, Seagram, General Motors, Hindustan Times, and Lipton.

Emphasis on film marketing

We believe that one of the factors contributing to our success has been our use of innovative techniques in the Indian film exhibition context to market films shown at our cinemas. We organize movie screenings with film stars, conduct preview screenings for film critics, conduct movie-based promotions, distribute movie memorabilia and information and publish an in-house movie magazine called Movies First. We also have a customer loyalty program. We focus on local area marketing and sales, which allows us to build loyalty with customers in the immediate catchments. Promoter focus on film exhibition and innovative management Mr. Ajjay Bijli, our Chairman cum Managing Director and one of our Promoters, is a pioneer in the Multiplex Cinema segment in India and has over 15 years experience in the film exhibition sector. He is focused on the film exhibition business and has contributed to our development and growth. He was awarded with the Theatre World Newsmaker of the Year Award for 2003

at FRAMES 2004, a global convention on the business of entertainment organised by FICCI. In 2004, CineAsia, a prominent Asian film industry convention, gave him a special award for his significant contribution to India's Multiplex Cinema segment. He was recognized as Entrepreneur of the Year Entertainment by the Indian Retail Forum held in Mumbai in September 2005 and Delhi Ratna by the PHD Chamber of Commerce and Industry in August 2005. Our management team, led by Mr. Bijli and Mr. Sanjeev Kumar, our Executive Director, has demonstrated its ability to think ahead of our competition and remain innovative. Our current executive management team has a blend of film exhibition and hospitality industry experience and professional expertise drawn across different industries. Some of our current key employees have received formal training at cinemas in Australia and Singapore operated by Village Roadshow. Proven project selection, development and implementation skills We have evolved and implemented a structured system of project evaluation and approval. Decisions on projects are taken on the basis of extensive market research undertaken on the location and quality of the development by our business development team and leading specialized research organizations. We frequently reject opportunities for cinema developments that do not meet our stringent project selection criteria. We have an in-house specialized team for cinema design and implementation. This team is supported by international and domestic project consultants. We have successfully managed the development and implementation of 10 cinema projects. Scalable systems and processes and uniform staff training Our uniform operational systems, processes and staff training procedures will enable us to replicate our high operating standards across all future cinemas. We use Vista software, which is used worldwide, across all our cinemas to capture box office sales, food and beverage sales and sale of tickets on the internet. We use the same rigorous cash and inventory control systems, and procedures for film scheduling, contracting, advertising and management for all of our cinemas. All our systems and processes are documented in a single manual. We have also developed robust and uniform staff training systems.

PVR Strategy
With a strong appetite for movies and an upward migration of household income levels in India, we believe that the Indian film industry, and the film exhibition sector in particular, will continue to experience strong growth. Our main goals are to remain Indias largest and most preferred cinema exhibition company. To achieve these goals, our business strategy emphasizes the following elements: Continue to provide the highest exhibition standards to achieve customer delight. Increase the number of cinemas under our operation on a pan India basis. Our strategy is to adopt a price-based differentiation model, offering our patrons a superior cinema-going experience at each price point. Indias largest and most preferred film exhibition company. Plan to open lower cost cinemas using digital technology along with the refurbishment and remodeling of the cinema to give patrons a superior movie experience at an affordable price

Capitalise on our market leader position and source consulting, development, operating and management business under the management fee/franchise model Continue to maximise revenue from our existing cinemas. We plan to increase box office revenue from our existing cinemas through flexible pricing to attract patrons at various points in time of the day and by the week, by maximizing the number of screenings of popular movies, corporate bulk sales of tickets, and making the purchase of tickets easier through our website, the telephone and electronic ticket kiosks. Increase sales of food and beverages through product incentives, combo products at a cheaper price, which increases the average value of each transaction; and Utilise additional areas adjacent to a few of our cinemas for restaurants/food courts and sale of music CDs and cassettes. These additional areas are available in our existing Multiplex Cinema, PVR Gurgaon, at Metropolitan Mall, Gurgaon and in our properties under development at Juhu, Mulund and Sahara Mall in Gurgaon. We have already sub-let the additional spaces at the MGF Mall to food and beverages outlets on higher rentals. Increase revenue from advertisers. As we increase our number of cinema screens there will be an increase in the number of our patrons, which will increase the attractiveness of our cinema circuit to advertisers. This should enable us to increase our advertisement revenue. Utilise economies of scale as we grow in size and expand our reach. Our goal for our film distribution business is to be the preferred distributor for both English and Hindi movies. Our strategy is to distribute Hindi films in the same territories where our cinemas are located, whilst our strategy for international films is to purchase the entire suite of distribution rights including the theatrical, satellite/television and DVD rights for international films on an all India basis. With respect to international movies, we intend to position PVR Pictures as the distributor of choice for independent production houses that do not have a base in India for distributing their movies. We intend to continue to follow primarily a derisked distribution model, which will be based on commission and/or revenue sharing

SWOT Analysis for PVR Cinemas

Strength

First mover advantage in the multiplex business in India. Updated technology using Xenon technology for better movie viewing and also one of the first multiplexes to introduce DOLBY digital surround systems. Premium positioning. Operating at higher margins. Plays Hindi, English, Regional & foreign movies. PVR is usually located in areas that will soon be developed and filled with retail outlets and hence they have a strategic location advantage. Ambience. Started the concept of a complete movie going experience. Very strong brand equity. TOM recall. Original multiplex because it was the first to introduce the multiplex concept in India. Blend of retail & entertainment because along with cinema there is also provision for F&B, shopping, etc.

WEAKNESS

High cost perceptions. Overdependence upon uninterrupted supply of electricity / water etc. T.A very specific (not mass service). Disjointed images for all PVR properties. Customer retention as many competitors are cropping up with competitive prices. Parking problems at some locations as they are inside malls, etc which interferes with the space availability.

OPPORTUNITIES

First mover advantage. Growing family spend on entertainment due to high disposable income. Large film industry over 200 Hindi films every year and also many international releases giving preference to India. Alternative sources of content Cricket, F1 etc at PVR. Distribution of electronic films to combat piracy. PVR loyalists who prefer no other brand.

THREATS Competition blooming large and many small players emerging in the market. Governments interference. Entertainment Tax. Single screen theatres scattered all around which show same movies at very low prices by compromising on the quality and ambience. Other means of entertainment such as plays, recitals, concerts, etc. Very little control over piracy. Movies becoming bigger than the brand due to increased marketing of movies in recent times.

Porters 5 force analysis

THREAT OF NEW ENTRANTS

Investment Barriers The investment barriers for the film exhibition are relatively insignificant. The cost of setting up a 1200 seater multiplex in a metropolitan city is between Rs. 8-9 Crores apart from the cost of leasing the land. Assuming a 40% occupancy rate and average ticket price of about Rs. 100 and an operating margin of 25% the payback period is between 4-5.5 years. If food and beverages earnings are taken into account this reduces to 3.5-4.5 years. Theatres have a negative working capital requirement. This means that a multiplex project can generate free cash flow in a very short while.

Regulatory Barriers There are regulations that require that new films released in cinemas, may not be shown on television or released on home video for a fixed window of time. This regulation is intended to protect distribution in the cinema from the development of television and video. The clearance periods may vary according to the box office success of a film, thus creating further discrimination. This ensures that depending on the films potential, the

exhibitors have sufficient period to lock-in as much profit as they can before the video and television release of the film.

Established relations with the major distributors Big players who have been in the film exhibition business for some time have established close relationships with distributors. With lobbying with the distributors being extremely important for rights acquisition to first-run movies; these relationships prove to be crucial in getting rights to the most anticipated films.

Squeezing out small players The rapid growth of the multiplex variety of film exhibition and its growing dominance in deals with the distributors has meant that small theatres have to be content with the secondrun movies leading to major competition for the first-run big-banner movie exhibition between the multiplexes only. All these factors result in this factor being attractive to the new entrants. In fact new entrants to the industry are mostly in the form of producers / distributors entering as a vertical integration strategy.

THREAT OF NEW SUBSTITUTES

Though not a direct substitute, video and television releases for a movie are close substitutes for movies exhibited in cinemas. Due to the regulations as mentioned before, this substitution is mainly for the second-run of the movies. This effect is bound to increase as pay-per-view television is introduced and producers find television releases more profitable. Where multiplexes differentiate from these substitutes is in the entire experience that watching a film in a theatre provides. Watching a newly released film on the big-screen with the entire family is a major attractant for the movie-goer. Hence the avid movie-goer (which is a large proportion of the audience for a first-run film) will never exchange the experience for watching the movie on video. For some families a movie might be a form of a family outing. For such cases other forms of entertainment like amusement parks might be considered as remote substitutes.

All of this suggests that the ambience and quality of movies and infrastructure would play a major role is mitigating this threat of substitutes. Hence there is little threat of substitutes for first run films and is mildly unattractive for second-run films.

POWER OF SUPPLIERS The suppliers here are the film distributors and vendors for the food and beverages. Of these the maximum power is wielded by the distributors. Although the process of giving exhibition rights is supposed to be through inviting for bids, such transparency rarely exists and most of the deals are closed through lobbying. Refusal to supply is a major concern for any exhibitor. A decision by either of the two largest distributors to refuse to supply first run to an exhibitor may lead to the destruction of that exhibitors business where that exhibitor is in a competitive market. The decision by a distributor not to supply may also be due to the exhibition site being of inferior quality or that there is insufficient demand to justify a first release print. This results in the power of suppliers being unattractive for the incumbents.

POWER OF CUSTOMERS The customers usually choose a theatre based on the proximity of the theatre to the place of residence / work. They dont differentiate much between theatres unless the ambience is very different. Also there is a interesting heuristic observed in the location of the multiplexes summarized by the 5-mile rule which states that no two theaters (competing or otherwise) can show the same film if those locations are within five miles of each other. So a customer is forced to go to the only theatre in her proximity which is showing the film she wants to see. She will go to a theatre even if she is unhappy with it provided her desire to see the movie is high enough. Besides this, many exhibitors are coming up with Customer Loyalty Programs, further reducing the power of the customer. This results in the power of customers being very attractive for the new entrants.

INTERNAL RIVALRY The major players in the multiplex business are PVR, Inox Leisure, Adlab Films and Shringar Films. Now there are many new players competing with each other. The rivalry among these players is mostly restricted to location selection. With new malls springing up very rapidly, and multiplexes also looking to expand in numbers and into new areas negotiating lease deals with mall owners is very important. A new trend emerging (as shown by the entry of Shringar

Films, is that of vertical integration by production houses / distributors into the multiplex business. Producers / distributors have realized that their operations could be enhanced by joint control of distribution and exhibition. With producers wielding all the control over their films, this could mean squeezing out of competition from independent exhibitors. But as of now the integration have benefited to improve efficiency without much of a negative effect on competition. Overall the internal rivalry in the industry is attractive for the incumbents.

MARKETING MIX 7 Ps

PRODUCT - While developing a service product; it is important that the package of benefits in the service offer must have a customers perspective. 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. Bulk Bookings - There are special arrangements for bulk bookings (of twenty or more tickets) done by corporate. Details can be filled online and PVR executives themselves get in touch with the concerned people. E-booking and tele-booking - PVR also provides the factility of e-booking, which was first started by PVR, it has now been copied by Satyam cineplexes as well. It also offers telebooking. 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. Movie vouchers - They have also taken out the unique concept of movie vouchers which people can use as gifts. Many corporates have also started 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. PRICE - 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. 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. 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 breakeven points. The pricing at PVR Europa is Rs 160 and a Gold Class ticket is charged at Rs. 750 and even goes upto Rs. 900. It offers superior ambience, environment, seating, viewing etc in the sum. PLACE - 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 tele-booking. The only intermediary involved for procuring movies are Indian as well as international movie distributors, by way of whom they acquire the movies.

PROMOTION - 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. They are also in collaboration with cellular services like Airtel have SMSand- 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.

PEOPLE This indicates the Employees and Customers. Service must be fully developed and internally accepted before its launched. PVR indulges in the following: 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 and 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, 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, 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, all employees are taught to deal with safety problems like accidents, Fire, bomb threat, armed robbery etc. 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. 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. 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. 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 make the service tangible. 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

PROCESS - 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

PVR Talkies Product 3 screen multiplexes

PVR Premiere 6-10 screen multiplexes Approx. 80-350 Rs Print Ads, Movie events, contests, bulk ticketing

PVR Gold Class 6 screen multiplexes

Price Promotion

Approx. 60-100 Rs Print Ads in local newspapers, Contests, Bulk ticketing

Approx. 600-900 Rs Print Ads, Movie events, contests, bulk ticketing, press releases, private screening, venue hire Tier 1 cities Gurgaon, Delhi NCR , Hyderabad etc. Air conditioned theatre, controlled recliner seats, ticket dispensing machines

Place

Tier 2 & 3 towns EG: AURANGABAD, LATUR ETC

Tier 1 cities Mumbai, Bangalore etc Air conditioned theatre, recliner seats, ticket dispensing machines

Physical Evidence

Air cooled theatre, nonrecliner seats

People Process

Training & Benefits Online ticketing, tele- booking, Booking at the venue

STPD for PVR Cinemas

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

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

PVR Talkies targets SEC B and C whereas PVR Premiere and Gold target segment A1, A2 and B1

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 the 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).

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.

Differentiation The points for differentiation are as follows Provides multiplex experience at certain locations within the budget at PVR Cinemas where they have differential pricing and PVR Talkies which are budget theatres. PVR Gold has a bar and a lounge inside the theatre which provides complete entertainment and not just a multiplex theatre experience. PVR Gold has ticket rate inclusive of freebies and merchandise. PVR Premiere has differential pricing as per area and show timings PVR Saket has the distinction of having the widest screen in India. First to offer online ticketing facilities and also the first to accept credit card payment. Has its monthly magazine called Movies First that updates the movie lovers on the latest happenings in Bollywood and Hollywood. The only cinema to introduce the Gold Class concept in India. Has the best design in current multiplexes and thus gives the customer the best movie experience.

PVR talkies Segmentation Target Positioning Differentiation SEC B,C Age 3+ Value Positioning Multiplex experience within the budget

PVR Premiere SEC A2, B Age 3+ Quality Positioning Differential Pricing as per area & show timing

PVR Gold Class SEC A1,A2 Age 3+ Luxury Positioning Freebies, Bar, Lounge, Controlled recliner seats

Promotions by PVR Cinemas

PVR customers who use Visa Platinum, Visa Signature or Visa Gold cards who buy cinema tickets through http:// www.pvrcinemas.com/ will receive one free ticket out of every two tickets purchased

Financial Performance of PVR Group 2010-11

Financial Review:

While the performance of the Company for the first nine months of 2010-11 was decent, however the fourth quarter was impacted due to the Cricket World Cup as no blockbuster movies were released during the period. On an overall basis, the company has been able to demonstrate promising growth in revenues led by 7%-10% growth in ticket pricing and food & beverage realizations across the same stores. The success of big blockbuster movies like Rajneeti, Housefull and Dabangg boosted the film industrys fortune. Small Budget movies like Peepli Live, Phas Gaye Re Obama, Tanu Weds Manu among others also did well at the Box Office. During the financial year under review the total income of the Company were Rs. 360 Crores as compared to Rs. 280.6 Crores in 2009-10, up by28%. EBITDA for 2010-11, were Rs. 60.7 Crores as compared to Rs. 31.7 Crores in 2009-10, up by 91%. Profit The company at present operates 33 properties with 142 screens in 18 cities across the country. The company added 19 Screens at 3 locations i.e. Chennai, Ahmadabad and Lucknow in 2010-11. The Company had signed Agreements/MOUs for 75-80 screens for the coming financial year in different parts of the country including cities like Udaipur, Vijaywada, Delhi, Mysore, Bangalore, Bhopal, Pune etc. which will further boost the revenues and profitability of the company. The pipeline of the movies for FY 2011-12 looks exciting and the company expects its revenues to consolidate further on the strength of its properties in the best locations. The company expects that about 25-30 3D films that are expected to be released in financial year 2011-12, will fetch higher ticket prices. The company also has a plan to install digital IMAX theatre systems at its four locations in India. The first two of them would be installed within the next 12 months at Companys two
multiplexes in Mumbai and Bangalore.

Subsidiaries

As on March 31, 2011 the Company had three subsidiary companies namely M/s CR Retail Malls (India) Limited (CRR) a wholly owned subsidiary, M/s PVR Pictures Limited (PVR Pictures) and M/s PVR bluO Entertainment Limited (PVR bluO).

CR Retail Malls (India) Limited (CRR)

CR Retail Malls (India) Limited operates the 7 screen Multiplex at ThePhoenix Mills Compound at Lower Parel, a prime retail and entertainment destination in Mumbai. CRR during the period 2010-11 recorded an income of Rs. 28.65 Crores and a Net Profit of Rs. 4.06 Crores. On 5th May, 2011, PVR Ltd. entered into an arrangement with JM Financial group of Companies for sale of equity shares of CRR. Under the terms of sale of entire equity share of CRR, PVR Ltd. has realized Rs. 100 Crores. PVR has also entered into a lease agreement with CRR to continue to operate the multiplex property on a long term lease basis. PVR Pictures Limited (PVR Pictures)

PVR Pictures is in the business of film production & distribution. The year under review was adversely impacted on account of poor performance of companys production Khelein Hum Jee Jaan Sey. As a result the company incurred a loss of Rs. 22.18 Crores at PAT level during 2010-11. The loss after excluding Minority Interest was Rs. 13.31 Crores. Due to these losses both the investors i.e., JP Morgan Mauritius Holdings IV Limited and India Advantages fund (IAF) have shown their intention for exiting from the company. Your company (PVR Limited) has now decided to purchase balance 40% equity share capital of PVR Pictures Limited from the said two investors and pay Rs. 60 Crores i.e., Rs. 30 Crores to each of the said two Investors. Post acquisition of 40% share capital by PVR Limited, PVR Pictures Limited shall become a wholly owned subsidiary of your Company. The company is in the process of completing a movie Shanghai which is being directed by Dibakar Banerjee starring Abhay Deol and Emran Hashmi and is expected to be released in the third quarter of the FY 2011-12.

PVR bluO Entertainment Limited (PVR bluO)

PVR bluO in the financial year 2010-2011 earned a Net Revenue of Rs.14.27 Crores and a Profit after Tax of Rs. 2.08 Crores. Presently the company operates Indias largest bowling alley center in Ambience Mall, Gurgaon. The center has been able to establish itself as a premier leisure and entertainment destination for consumers in NCR. The Company has made a roadmap for expansion of its business and has plans to open additional 3-4 bowling centres in India in next 12 months.

6D Technology

Originally, 6-D technology was perfected by the Brainstorm Institute for use in PowerPooint presentations. Although PowerPoint presentations can be viewed on the desktop, spectacular results are achieved when they are projected onto a large screen for conferences, shows, exhibits, or other presentations. Another use for Amazing 6-D (twice as good as 3-D!) Technology is to create stunning HyperFlash animations. HyperFlash is an ideal way to add some extra "pop" in your PowerPoint presentation or on a web site. Speaking of web sites, Amazing 6-D (twice as good as 3-D!) Technology can also be used throughout your web site to add an extra dimension of fun to the viewing experience. Doc Collins and the rest of the The Brainstorm Institute's faculty are currently exploring methods of incorporating Amazing 6-D (twice as good as 3-D!) Technology into video presentations, theme park exhibits, medical, technical and scientific applications, live theater, clothing, and other innovative forums. In addition, Amazing 6-D (twice as good as 3-D!) Technology can be adapted for use in print materials as well as electronic

References

http://www.bestmediainfo.com/2011/07/indian-entertainment-media-industry-to-grow-by-13-2-cagrpwc/ http://www.pvrcinemas.com/corporate/about-us.aspx http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/PVR-Ltd/532689 http://www.pvrpictures.com/about-us/ http://www.pvrbluo.com/about_bluo.html http://www.filmfare.com/articles/top-10-exhibitors-1286.html http://www.sebi.gov.in/dp/pvrlimited.pdf http://www.indiaprwire.com/misc/pvr-cinemas.htm http://www.selectcitywalk.com/cinemas.htm http://www.4psbusinessandmarketing.com/24042008/storyd.asp?sid=1872&pageno=2