Movie Theater Analysis

1. Movie Theater Analysis Rob Horner Maria Lares Debra Lawrence

2. Introduction • Project objectives • Industry facts and secondary data • Hypotheses • Survey and profile of respondents • Determining a strategic market focus - data analysis using SPSS • Interpretation of market research • Interesting findings • Future improvements to survey • Conclusions

3. Project Objectives • To identify preferences and movie viewing traits of moviegoers age 25+ in the Delaware Valley using descriptive research methods • To interpret research data for a movie theater company that is considering whether to open a new mid-sized theater for moviegoers age 25+ • If project is feasible, what should be the strategic market focus?

4. Industry Facts • In 2001, U.S. gross box office reached all-time high of $8.41 billion • On average, each American sees 5.3 films/year • Highest percentage of frequent movie fans are between ages of 12-24; over-40 age group is second highest, followed by 25-39 age group • Collectively, the age groups 25+ account for nearly 60% of all moviegoers • Admissions increased 30% to all-time high of 1.5 billion in 2001 • 6,600 theaters with 37,000 screens in U.S.

5. Secondary Data • 51 movie theaters in DE Valley, approx. 300 screens • Competitor Ritz Theaters has four theaters geared toward adult moviegoers (3 Center City, one in Voorhees, NJ) • Population of DE Valley is 5,387,407 with an estimate growth rate of 11%* * Delaware Valley Regional Planning Commission, March, 2002

6. Secondary Data Based on a nationwide telephone survey of 2,025 adults (> age 16) by the Movie Picture Association of America during 2001: • 30% of movie-goers are frequent attendees; this group accounts for 82% of all admissions • Men go to the movies slightly more than women • Single adults go to the movies more often than married adults

7. Hypotheses • Men attend films in theaters more often than females • Single adults go to the movies more often than married adults • Variety of film genre is important to frequent moviegoers • People with higher household income attend movies more frequently • Availability of pre- and post-theater entertainment options in close proximity of the theater is important to frequent moviegoers

8. Survey • 23 questions • Convenience sample • 108 responses • Delaware Valley residents over age 25 • Mixture of nominal, ordinal, interval (Likert) and ratio scales

9. 40% male; 60% female Mean age = 32.1 years 43.5% married; 56.5% single 31.5% have at least one child 80% provided household income, about 50% over $75,000 and 50% under 50% are frequent moviegoers (one or more movie/month) 50% are occasional or infrequent moviegoers (less than one movie/month) Favorite types of movies: Drama 30% Action 25% Comedy 20% Profile of Respondents

10. Strategic Market Focus: Gender • Ho: Independent relationship between gender and frequency of movie theater visits • H1: Dependent relationship between gender and frequency of movie theater visits • Analysis: accept Ho Asymp. Sig. = .294 > .05 • Conclusion: Neither gender conclusively attends films in theaters more often

11. Strategic Market Focus: Gender

12. Strategic Market Focus: Marital Status • Ho: Independent relationship between single marital status and frequency of movie visits • H1: Dependent relationship between single marital status and frequency of movie visits • Analysis: accept H1 Asymp. Sig. = .025 < .05 • Conclusion: Some evidence that single moviegoers attend movies more frequently than married moviegoers

13. Strategic Market Focus: Marital Status

14. Strategic Market Focus: Variety of Films • Ho: Independent relationship between variety of films and frequency of movie theater visits • H1: Dependent relationship between variety of films and frequency of movie theater visits • Analysis: accept H1 Asymp. Sig. = .00 < .05 • Conclusion: Evidence of relationship between frequent moviegoers and variety of films

15. Strategic Market Focus: Variety of Films

16. Strategic Market Focus: Income • Ho: Independent relationship between high income and frequency of movie theater visits • H1: Dependent relationship between high income and frequency of movie theater visits • Analysis: accept Ho Asymp. Sig. = .273 > .05 • Conclusion: Moviegoers with higher household incomes will not necessarily attend movies more frequently

17. Strategic Market Focus: Income

18. Strategic Market Focus: Importance of Supplemental Entertainment • Ho: Independent relationship between supplemental entertainment options and frequency of movie theater visits • H1: Dependent relationship between supplemental entertainment options and frequency of movie theater visits • Analysis: accept Ho Asymp. Sig. = .327 > .05 • Conclusion: Availability of supplemental entertainment options in close proximity of the theater is not necessarily important to frequent moviegoers

19. Strategic Market Focus: Importance of Supplemental Entertainment

20. Interpretation of Market Research • Evidence that variety of film genre is important to frequent moviegoers = target market • Evidence that single moviegoers attend more frequently than married moviegoers = target market • Although we did not find evidence that frequency of movie theater visits is dependent on gender, household income or availability of supplemental entertainment options in close proximity of theaters, we believe these factors should be further studied

21. Interesting Findings • 75% of respondents are satisfied with their movie theater • 63% of respondents are not aware of movie theater with premium services • 40% would not attend movies more frequently if a theater existed with premium attributes

22. Interesting Findings • Majority of frequent moviegoers rated a restaurant in close proximity to theater as the most important supplemental entertainment option • 65% prefer traditional booth as payment method • 60% typically drive 20 minutes or less to a movie theater

23. Interesting Findings • 75% indicated cleanest or newest theater in the area as the most influential attribute when choosing a theater • Majority ranked quality of sound, leg room and quality of picture as the most important physical attribute

24. Future Improvements to Survey • Q3 – should be more specific and clear • Q18 – marital status should be single or not single (married/companion/partner) • Ranking questions should be simplified; many respondents checked but didn’t rank • Open-ended questions didn’t provide useful info • A few questions didn’t give us any useful data • Should have included Q about respondent’s zip code

25. Conclusions • Research is biased - convenience sample rather than a random sample • Length and complexity of survey is sufficient - people did not complain about the number of questions or complexity • Marketing focus should be selling a movie “experience” - promoting premium attributes • Further analysis to determine potential locations

26. Questions ?