Name Nuru| Afr|an|

ID 10808110000S
CASL 3
CINLLLk LN1Lk1AINMLN1 1nL LCAL1 kCGkAM
Introduct|on
ln AugusL 2006 CLC Lllls !acob was approached Sarah LewLhwalLe markeLlng dlrecLor of Clneplex Lo
resume Lhe developmenL of loyalLy program 1he movle ylelded lnconslsLenL revenues each year and
!acob wanLed Lo lncrease and sLablllze Clneplex's revenues LewLhwalLe was scheduled Lo presenL her
recommendaLlons Lo Lhe commlLLee Lhe followlng week She would need Lo make a persuaslve
argumenL LhaL lncluded recommendaLlons on program developmenL Lhe reward sLrucLure and Lhe Lype
of promoLlonal campalgn LhaL would be mosL effecLlve under Lhe exlsLlng budgeL consLralnLs llnally
she needed Lo suggesL wheLher Lhe program should launch reglonally or naLlonally
C|nep|ex Lnterta|nment
Clneplex LnLerLalnmenL was founded ln 1979 as a small chaln of movle LheaLers under Lhe Clneplex
Cdeon name ln 2003 Clneplex merged wlLh Calaxy LnLerLalnmenL lnc (Calaxy) ln laLe 2003 Clneplex
Calaxy acqulred lLs largesL compeLlLor lamous layers and become Clneplex LnLerLalnmenL Canada's
largesL fllm exhlblLor Clneplex corporaLe mlsslon focused on offerlng movlegoers an excepLlonal
enLerLalnmenL experlence" ln 2003 Clneplex expanded lLs sLraLegy Lo focus on developlng new
markeLs uslng Lhe LheaLers large screens Lo showcase llve evenLs such as ma[or hockey games
wresLllng maLches and Lhe MeLropollLan Cpera ln 2003 weak boxofflce aLLendance has affecLed
Clneplex's operaLlng performances ln 2006 Clneplex execuLlves ad[usLed Lhe prlclng ad producLs ln Lhe
food and beverage concesslons lmlLaLe Lhelr compeLlLor lamous layer ln 2003
A Growth Cpportun|ty
Clneplex faced varlable aLLendance levels dependlng on Lhe crop of new movles AddlLlonally revenue
per guesL (8C) flucLuaLed based on Lhe fllm genre Audlences for acLlonLhemed and chlldren's movles
purchased a hlgh volume of concesslon lLems whlch Lyplcally resulLed ln a hlgher 8C Lhan dramas
Powever wlLh no acLual llnk Lo lndlvldual cusLomers Lhey faced challenges LargeLlng cusLomers for
speclflc movles and speclal evenLs AlLhough markeL research was helpful on an aggregaLe level
Clneplex execuLlves wanLed Lo llnk boxofflce and concesslon purchases Lo a parLlcular cusLomer
I||m Lxh|b|t|on
1he flrsL Canadlan fllm screenlng Look place ln 1896 ln MonLreal Cuebec and Lhe earllesL clnema
opened ln 1906 ALLendlng Lhe clnema also known as LheaLers become a popular soclal acLlvlLy by Lhe
1930s ln 1979 Canada's flrsL 18LheaLer mulLlplex opened ln 1oronLo CnLarlo wlLh several oLher

mulLlplexes followlng ln subsequenL years 8y 2003 only Lhree ma[or LheaLer companles exlsLed ln Lhe
Canadlan movle and evenL exhlblLlon markeL
1o showcase fllms LheaLers requlred llcenslng from dlsLrlbuLors who purchased rlghLs from producLlon
sLudlos 1he llcenslng agreemenL sLlpulaLed Lhe boxofflce spllL" also known as Lhe percenLage of
proceeds LhaL Lhe LheaLer recelved from a glven fllm over a speclfled duraLlon AlLhough boLh parLles
were muLually dependenL dlsLrlbuLors held Lhe balances of power and LheaLers relled heavlly on
concesslon revenues of whlch Lhey reLalned 100 per cenL of Lhe recelpLs
Customer ke|at|onsh|p Management (CkM)
CusLomer relaLlonshlp managemenL (C8M) ls a markeLlng approach ln whlch a company collecLs
lndlvldual purchaslng lnformaLlon Lo lmprove lLs ablllLy Lo undersLand and respond Lo cusLomer deslres
and buylng paLLerns A beLLer undersLandlng of cusLomers enables organlzaLlons Lo develop LargeLed
campalgns Lo lncrease markeLlng effecLlveness such as resLrucLurlng lLs producLs and servlces lor
Clneplex a C8M program could also be used Lo share valuable lnformaLlon wlLh concesslon suppllers
and movle dlsLrlbuLors 1hrough Lhe sharlng of Lhls lnformaLlon parLner would be beLLer able Lo develop
producLs for Clneplex's cusLomer base 1he mosL frequenLly used sysLem Lo collecL cusLomer
lnformaLlon were polnLofsale sysLems whlch scanned barcodes on walleLslxed card or key chalns
Creat|ng Loya|ty
Lven wlLh 63 percenL markeL share ln Canada Clneplex has Lo aggresslvely compeLe for cusLomer
aLLenLlon 8efore merglng wlLh Clneplex Cdeon Calaxy LnLerLalnmenL had esLabllshed Lhe Calaxy LllLe
Card whlch offered cusLomers Lhe opporLunlLles Lo accumulaLed polnL Lowards free movle vlewlng
uurlng Lhe merger wlLh Clneplex Lhe program has been dlsbanded and Calaxy's cusLomer Lrafflc had
prompLly waned ln a survey of Clneplex cusLomers ln May and !une 2003 93 percenL of respondenLs
sLaLed Lhey were lnLeresLed ln [olnlng a movle rewards program
ln 2004 a sLeerlng commlLLee composed a dlfferenL deparLmenL represenLaLlves was esLabllshed Lo
lnvesLlgaLe C8M opporLunlLles for Clneplex Senlor managers had several concern prlmarlly regardlng
daLa conLrol and ownershlp whlch would be relevanL lf Lhe program were dlsbanded AnoLher concern
ln esLabllshlng [olnL loyalLy/C8M program
O 8esource requlremenL a program Lhls slzed wlll be a cosLly lnvesLmenL and would llkely requlre
new employees Lo manage lL
O LengLh of Llme requlred Lo esLabllsh a new daLabase because mosL commlLLee members
belleved LhaL concluslve lnformaLlon on cusLomer behavlor could be drawn from a mlnlmum of
300000 members
O lf lmplemenLed poorly Lhe organlzaLlons lmage and lLs ablllLy Lo dellver cusLomer value could
suffer wldespread harm
Loya|ty artner Cpt|on

a Interna| Deve|opment
Dnder Lhls opLlon Clneplex managers would develop and operaLe Lhe program Lhey would Lhen
know Lhelr brand besL and would have compleLe conLrol over Lhe dlrecLlon of Lhe program and
Lhe daLa ownershlp 1he weaknesses of Lhls program are
O 1he cosL LhaL would be lncur approxlmaLely aL $33 mllllon ln Lhe flrsL year wlLh
dlmlnlshlng cosLs ln subsequenL years
O Company would be also fully exposed Lo Lhe flnanclal rlsk of unredeemed polnLs and
could face dlfflculLy ln dlvesLlng Lhe program lf lL proved unsuccessful
O A new deparLmenL would need Lo be creaLed Lo manage Lhe exlL of Lhe program
O 1hls program also requlre a new daLabase whlch dependlng on promoLlonal
effecLlveness could Lake several years Lo creaLe
b I||ght M||es artnersh|p
lllghL Mlles was Lhe Lop Canadlan loyalLy program 1hls program gave cardholders Lhe
opporLunlLy Lo earn lelsure and Lravel rewards by purchaslng producL aL varlous reLallers across
Lhe counLry ln Lhls program LradlLlonal lllghL Mlles cards would be used Lo collecL polnLs
SupplemenLary key Lags would be lssued for movle cusLomers who opLed Lo recelve addlLlonal
member beneflLs and rewards 1he beneflLs of Lhese programs are
O lmmedlaLe enLrance lnLo a daLabase of seven mllllon people
O Pave Lhe opporLunlLy Lo access daLa from oLher lllghL Mlles parLners whlch would be
beneflL ln LargeLlng speclflc reLall buyers for nlche fllms
O lllghL Mlles execuLlve also offered Lo conLrlbuLe $230000 Lo launch a Clneplexdeslgned
and lnlLlaLed markeLlng campalgn
Powever Lhls program also has some weaknesses Lhey are
O Access Lo Lhe lllghL Mlles program would cosL Clneplex yearly fees of approxlmaLely $3
mllllon
O Dsers of Lhe program would expecL each movle LransacLlon Lo be worLh a mlnlmum of
10 lllghL Mlles polnL wlLh requlremenL paymenL $009 for each polnL lssued
O Clneplex also be requlred Lo pay each Llme lL accessed Lhe daLa whlch lllghL Mlles would
own
O A commlLmenL of Lhree years would be requlred and lf Clneplex declde Lo leave Lhe
program lL would lose all access Lo accumulaLed daLa
c Scot|abank roposa|
As one of Lhe 8lg llve banks ln Canada ScoLlabank offered a dlverse range of flnanclal servlces
lncludlng banklng wholesale banklng and wealLh managemenL ScoLlabank execuLlves were
lnLeresLed ln acqulrlng new youLh accounLs and lncreaslng overall LransacLlons so Lhey vlewed a
parLnershlp wlLh Clneplex as a means Lo achleve Lhelr ob[ecLlves whlle sharlng flnanclal rlsk
ScoLlabnak proposed a Lhreecard rewards sLraLegy 1he baslc reward card would be Clneplex
branded and used aL LheaLers Lhe ScoLlabank deblL and credlL cards would acL as reward
acceleraLors LhaL accumulaLed addlLlonal polnLs based on cusLomers' purchaslng hablLs
Powever Lhls program also has some weaknesses

O MulLlple card sysLem mlghL dlscourage some cusLomers who dlsllke carrylng addlLlonal
cards
O 8ecause lL wlll be 3030 parLnershlp Clneplex's declslonmaklng power would be
consLralned and Lhe dlrecLlon of Lhe program would be sub[ecL Lo muLual agreemenL
O Cwlng Lo prlvacy laws Clneplex execuLlve would noL be able Lo access lndlvlduallevel
banklng lnformaLlon on Lhe ScoLlabank program users daLa LhaL mlghL be helpful ln
LargeLlng speclflc reLall consumers
Powever Lhls program could be promoLed ln LheaLers and bank branches across Lhe counLry
Structur|ng the keward rogram
LewLhwalLe belleved lL was essenLlal Lo creaLe a program LhaL would appeal Lo cusLomers lrom Lhe
Lhree opLlons above
O lf Clneplex wenL forward wlLh Lhe lllghL Mlles parLnershlp an offer of 10 lllghL Mlles polnLs per
LransacLlon would be requlred Lo allgn wlLh cardholder expecLaLlons and could supplemenLed
wlLh Clneplex dlscounL
O lf Clneplex wenL forward wlLh oLher loyalLy parLnershlp lL would have full deslgn conLrol over
Lhe reward sLrucLure of Lhe program
ueLermlnlng Lhe number and value of polnLs Lo be glven per LransacLlon and Lhe requlred prlce per
LransacLlon were aspecLs LhaL LewLhwalLe needed Lo deLermlne She also needed Lo declde on Lhe
number of polnLs requlred for parLlcular rewards and wheLher dlfferenL reward levels should be creaLed
Se|ect|ng the Database Vendor
1hls vendor would need sLrong Web slLe deslgn capablllLles and a Lechnology plaLform LhaL could collecL
a varleLy of daLa on Clneplex's cusLomers Clneplex released a requesL for proposal (8l) Lo Lhree ma[or
companles Alpha kappa and Camma
1he Market|ng Commun|cat|ons Campa|gn
Clneplex execuLlves wanLed Lo enroll 300000 cusLomers per year for Lhe flrsL Lhree years ln any loyalLy
program AfLer Lhe flrsL year LewLhwalLe belleved Lhe daLa bank would large enough Lo derlve
meanlngful cusLomer lnformaLlon and Lhe organlzaLlon could Lhen focus on cusLomer reLenLlon 1o
meeL Lhese LargeLs Clneplex would need Lo bulld subsLanLlal awareness of Lhe program
a In1heater Advert|s|ng
ln 2003 Clneplex served 33 mllllon unlque vlslLors annually wlLh an average of 73 vlslLs per
guesLs no cosLs were assoclaLed wlLh lnLheaLer adverLlslng and LewLhwalLe knew lL was an
excellenL way Lo reach Lhe markeL buL she was unsure whlch medla would be mosL effecLlve
wlLhouL overwhelmlng movlegoers
b Newspaper Advert|s|ng

1he commlLLee was opposed Lo adverLlslng ln a naLlonal newspaper such as Lhe Clobe and Moll
because lL dld noL have sLrong reach ln every markeL ln whlch Clneplex operaLed Powever
Clneplex was accusLomed Lo promoLlng evenLs Lhrough halfpage ads ln reglonal papers
AlLhough Lhls opLlon would be more cosLly Lhan adverLlslng solely ln a naLlonal paper several
more movlegolng markeL could be reached
c kad|o Advert|s|ng
Local radlo adverLlsemenL could achleve slgnlflcanL coverage ln key markeLs across Canada
8ecause Clneplex had used Lhls medlum for oLher evenLs parLlcularly ln rural LheaLer markeLs
LewLhwalLe was confldenL Clneplex could also negoLlaLe free adverLlsemenL space on many
radlo sLaLlon's Web slLes
d Cn||ne Advert|s|ng
ln addlLlon Lo adverLlslng on Lhe Clneplex Web slLe Lhe program could be promoLed Lhrough
varlous Web slLes CosLs varled accordlng Lo adverLlsemenL formaL and slLe
e Grass koots In|t|at|ves
LvenL Leams could promoLe on college and unlverslLy campuses or aL hlghly vlslLed aLLracLlons
Lhereby ralslng awareness for Lhe program
Launch
ln early 2006 Clneplex had compleLed Lhe lnsLallaLlon of a new polnLofsale plaLform whlch had Lhe
Lechnologlcal capablllLy Lo supporL a naLlonal loyalLy rollouL A naLlonal launch was appeallng Lo
LewLhwalLe because lL wlll be cosLefflclenL and would accrue revenue fasLer Lhan a reglonal rollouL
Powever lL was also rlskler Lhan a reglonal rollouL any problem would affecL all markeLs A reglonal
launch would glve Clneplex Lhe opporLunlLy Lo resolve problems before full lmplemenLaLlon 1he
reglonal rollouL would be more expenslve aL compleLlon buL lL wlll allow Clneplex Lo sLreLch funds over
a longer Llme perlod
uest|on Answer
1 Pavlng a more comprehenslve undersLandlng of cusLomer behavlor and demographlcs was
lmporLanL ln lmprovlng Clneplex's success buL could loyalLy program be lmplemenLed ln such a
way Lo flL senlor managemenL's crlLerla?
ln 2004 a sLeerlng commlLLee composed a dlfferenL deparLmenL represenLaLlves was
esLabllshed Lo lnvesLlgaLe C8M opporLunlLles for Clneplex Senlor managers had several
concerns prlmarlly regardlng daLa conLrol and ownershlp whlch would be relevanL lf Lhe
program were dlsbanded AnoLher concern ln esLabllshlng [olnL loyalLy/C8M program
O 8esource requlremenL a program Lhls slzed wlll be a cosLly lnvesLmenL and would llkely
requlre new employees Lo manage lL
O LengLh of Llme requlred Lo esLabllsh a new daLabase because mosL commlLLee
members belleved LhaL concluslve lnformaLlon on cusLomer behavlor could be drawn
from a mlnlmum of 300000 members

O lf lmplemenLed poorly Lhe organlzaLlons lmage and lLs ablllLy Lo dellver cusLomer value
could suffer wldespread harm
2 lf LewLhwalLe recommended golng ahead wlLh Lhe program whlch loyalLy parLner she should
use?
lf Clneplex wenL forward wlLh Lhe lllghL Mlles parLnershlp an offer of 10 lllghL Mlles polnLs per
LransacLlon would be requlred Lo allgn wlLh cardholder expecLaLlons and could supplemenLed
wlLh Clneplex dlscounL
lf Clneplex wenL forward wlLh ScoLlabank parLnershlp lL would have full deslgn conLrol over Lhe
reward sLrucLure of Lhe program
So lL's beLLer Lo have parLnershlp wlLh ScoLlobank 1hls parLnershlp ls called SCLnL 1hls
concepL wlll glve Lhe cusLomers more ways Lo earn lnsLanL fun rewards [usL by uslng Lhelr
SCLnL ScoLlaCard and SCLnL vlSA card Addlng a vlSA card Lo Lhe membershlp program wlll
allows everyone Lo acceleraLe Lhelr earnlng power wlLhouL changlng Lhelr preferred meLhod of
paymenL
3 Pow should Lhe reward should be sLrucLured and promoLed?

Cpt|on 1 Cpt|on 2 Cpt|on 3 Cpt|on 4
Membershlp fee no CneLlme $2 Annually $3 no
ermanenL concesslons dlscounL 10 13 10
olnLs? ?es ?es no ?es
Slgnup polnLs 300 100 230
olnLs per adulL movle
LransacLlon
100 100 100
olnLs per concesslon combo
LransacLlon
73

l wlll choose opLlon 4 1he reward sLrucLure SCLnL membershlp program ls free Lo [oln and
offers members an lmmedlaLe 10 per cenL dlscounL on all(l) concesslon purchases and enables
members Lhe chance Lo earn polnLs for fun rewards such as free movles and concesslon combos
slmply by golng Lo Lhe movles lL wlll be promoLed Lhrough LheaLers and bank branches across
Lhe counLry
4 WhaL would Lhe promoLlonal campalgn enLall and how should Lhe launch Lake place?
lL wlll be naLlonal launch because lL cosLefflclenL and would accrue revenue fasLer Lhan a
reglonal rollouL