The Alamo Drafthouse Case

Group 4
Ashim Ekka Manas Kalita Naqib Ahmad Rajendra Das Ritesh Mehta

Summary of the Case

Facility Layout and Delivery System

Owned by enterprising couple Tim & Carrie Differentiation strategy - Single screen movie theatre that serves beer and wine and offers a variety of food sandwiches, pastas, pizzas, desserts, etc. Compromises on various fronts to make the combination work Intentionally delayed service Fewer seats to accommodate tables for customers to place food and drinks.

Facility Layout and Delivery System

Before the start of the movie, staff visit customers and explain how the service system works Minimum disruption order service - Paper, Pencil and menu at each table for the customers to write orders and place the paper in a metal stand where it is picked by the waiters and order delivered No parking facility in the premises or the vicinity

Programming
Second-run features and special events screening 25 shows per week, second-run accounts for 80% of total shows Focus strategy - Movies picked to appeal to target audience, 2540 years old Special events screened in three-month blocks Two categories of special events Austin Film Society Events Classic and Art Films during the week Cult Films Thursday, Friday & Saturday Midnight show catering to
18-30 years old, generally males

Filmmakers speak at special engagements Annual festival of cult movies at Alamo

Revenues and Costs

Loss Leader Lower ticket prices, aimed at getting more people into the establishment Major customer spending on food and drinks Menu items price raised and high dollar items added to the menu to increase spending Profits limited by smaller capacity and high labor costs

Advertising and Promotion

Advertisements in 3 most read newspapers in Austin 3 months calendar of special events in advance Free PR exposure through Austin Chronicle, an entertainment publication Loyalty building through website and email queries Announcement of upcoming shows before every feature Working on customer suggestions and feedback to plan special events and modify the menu

Question 1
Prepare a Market Position Map for Alamo Drafthouse using food quality and movie selection as axes.

Food Quality
Good

Movie Selection
Many

. Alamo Drafthouse
Few

Poor

Question 2
Use the Strategic Service Vision framework to describe Alamo Drafthouse

Target Market Segments Service Concept Operating Strategy Service Delivery System

Second-run Movies: 25 to 40 year olds who have a sophisticated taste in films. Cult Movies: 18-30 year olds, predominantly male, regular alcohol consumers and customers of less mainstream

Movie experience with food and drinks served without creating any hassle to the customers.

Comparatively cheaper priced tickets to get more people into the theatre and increase their spending on food and drink.

Fewer rows, enough space between rows to accommodate long tables where customers can place their foods and drinks, staff can take orders and serve without a single word being exchanged

Question 3
Identify the service qualifiers, winners and service losers for Alamo Drafthouse. Are the Alamo purchase decision criteria appropriate for the multiplex movie theatre market? What do you conclude?

Service Qualifiers Location of Theatre Choice of movies screened Competitive ticket pricing Announcement of upcoming shows

Service Winners Availability of choice of food and drinks alongside movie experience Hassle free ordering system Special Events Screening Loyalty Building Service Losers Limited Parking Facility Only one movie screen

Alamo Purchase Proposition

Alamo basically encourages people to spend more money on services other than movies like food & drinks. In multiplex movie theatre market, people come for a good experience & hence the idea of making them spend more money on food & drinks is viable. Service winners of Alamo can be considered as service qualifiers by people in a highly sophisticated society.

Question 4
Make recommendations for Tim and Carrie that would increase profitability.

Recommendations
Increase variety in movies to attract different target markets Find ways to reduce staff levels Can order only at the counter at the starting of the movie with a specified time to deliver the food. Add in extra screen to telecast first-run movies Find ways to eliminate parking restrictions Advertise Alamo as a premium place and increase the ticket/food prices accordingly

Thank You