RESEARCH ON SERVICES OF CGV CINEMA SYSTEM PDF

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CJ CGV is the largest multiplex cinema chain in Korea, established on December 20, 1996, in Seoul, Korea. In 1996, CGV was originally founded by South Korea's CJ Cheil Jedang, Hong Kong's Orange Sky Golden Harvest, and Australia's Village Roadshow. After that, Golden Harvest and Village Roadshow wit...

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MINISTRY OF FINANCE UNIVERSITY OF FINANCE AND MARKETING

FINAL EXAM REPORT Subject: Marketing Service Topic: RESEARCH ON SERVICES OF CGV CINEMA SYSTEM

Major : MARKETING Specialization : MARKETING MANAGEMENT Teacher: NINH DUC CUC NHAT

Students Class: CLC_19DMA02 DANG BAO TRAM - 1921005710 NGO HONG AN - 1921005337 TRAN THAO VY - 1921005798 LUONG TRAN NHAT TRANG - 1921005725 NGUYEN THI BICH HUYEN - 1921005080 NGUYEN THANH TUYEN – 1921005756

Ho Chi Minh City, 2021

CHAPTER 1: INTRODUCTION 1.1 Company and service introduction CJ CGV is a unit under CJ Group - one of Korea's largest multi-sector economic groups present in 21 countries around the world. 1.1.1 History of formation and development CJ CGV is the largest multiplex cinema chain in Korea, established on December 20, 1996, in Seoul, Korea. In 1996, CGV was originally founded by South Korea's CJ Cheil Jedang, Hong Kong's Orange Sky Golden Harvest, and Australia's Village Roadshow. After that, Golden Harvest and Village Roadshow withdrew from the group, so the company was operated by CJ, merged into CJ Golden Village, and changed its name to CJ CGV.

Figure 1.1 Logo of CGV Logo and Slogan: “Evolving Beyond Movies” – “Experience beyond cinema” In 1998, CGV launched its first multiplex in Gangbyeon, and in December 2004, CGV was the first cinema chain to list on the Korean stock market. CGV surpassed total sales of 100 million viewers in 2004. The company released its first digital film in 2006, SMART PLEX in 2008, 4D PLEX in 2009, and Cine City in 2011. Milestone 2006, CGV opened 8 cinema locations in China, 1 in Los Angeles, and acquired MegaStar Cineplex - the largest cinema chain in Vietnam. At the end of 2005, CJ entered into a joint venture with Viet Gia Dinh Company (VIFA) with the name CJ-VIFA to export Vietnamese films to foreign countries through local production. CJ-VIFA's first project is a 100-episode TV series, with a duration of 50 minutes/episode titled "Smells of Coriander". This is the first step marking the development of CJ in the Vietnamese film market.

CJ CGV Vietnam also focuses on the audience in areas that do not have much access to the cinema, by creating opportunities for them to enjoy high-quality movies through programs. programs for the community such as "Smiling Moon" and "Cinema for everyone". Reference source: www.cgv.vn 1.1.2 Market penetration in Vietnam In July 2011, CJ CGV started buying the largest cinema system at that time, MegaStar for 73.6 million USD, but it was not until January 15, 2014, that CGV officially took over and operated the system. This is the largest cinema system in Vietnam. After MegaStar was "changed owners", many viewers expressed concern about future changes of this foreign branded cinema system. However, the leaders of the CJ CGV group gave convincing opinions that: Rebranding is CGV's commitment to the mission of bringing high-quality cultural products and services. international standards for Vietnamese audiences. CGV is an abbreviation of the words "Culture - Great - Vital" (Culture - Great - Essential for life). CGV opens up a unique concept of cinema with the idea of the cultural complex "Cultureplex" - where audiences not only come to experience movies on a high-tech platform but also can enjoy diverse cuisines, buy Buy products related to culture and entertainment, creating experiences that go beyond cinema following the motto that CGV has set out. In Vietnam, CGV's vision is to become the number 1 destination for movie and entertainment activities; maintain its leading position, and provide products and services "beyond cinema". CGV will accomplish this goal by expanding its cinema network, upgrading existing theaters to even higher international standards, including realistic images, diverse film genres, industrial development unique movie viewing technology, more culinary options, and more incentives for members. To affirm its brand and position in the Vietnamese market, CGV is committed to making efforts to contribute to the development of the Vietnamese film industry by investing in the production of high-quality films, introducing culture and Vietnamese cinema to the world, and at the same time bring top entertainment experiences from the world to Vietnam. Reference source: https://tintucvietnam.vn/cum-rap-cgv-cua-ai-va-co-gi-dac-bietd192566.html

1.1.3 Cinema system and screening room in Vietnam Since coming to the Vietnam market, CGV has constantly developed its services to bring the best experiences to customers. According to enterprise statistics, CGV currently owns 76 cinema clusters across the country, accounting for 61% of Vietnam's cinema market share. CGV expects each year to invest in building 12-15 new cinema complexes, including 4-5 cinemas in remote provinces. CGV also estimates that in 2020, it will invest about 15 million USD in building 8 cinema systems in the Hanoi capital alone. But since the Covid 19 pandemic broke out globally, from the beginning of 2020 until now, many businesses in the film industry business have been unable to keep up and have been severely affected. Cinema systems nationwide were forced to close to ensure safety rules in disease prevention. This forces them to have timely plans so that the business does not go to the brink of bankruptcy. 1.2. Objectives of the study The topic focuses on analyzing in detail the services of the CGV cinema system to see the success of a leading corporation in the film industry in the Vietnamese market. Analyze the growth as well as the process by which CGV builds its brand with Vietnamese audiences. Thereby, it is possible to comprehensively evaluate the services of enterprises in the Vietnamese market. At the same time, consider the aspects that businesses have not performed well to make timely assessments and suggestions to help the whole system develop more and more in the future. 1.3. Market overview 1.3.1. Industry and market overview Name of the industry: The entertainment industry Services: Cinema business In recent years, the film market in Vietnam is becoming a potential market in the eyes of both foreign and domestic investors. There have been many famous brands with strong economic potential that are "interested" in the market in Vietnam, CGV and Lotte are two brands from Korea that have proved this. Up to now, the CGV theater chain of CJ Group is leading with a total of 76 cinemas nationwide and 21 cinemas in particular in Ho Chi Minh City. Closely

followed is the Lotte cinema chain with 42 cinemas across the country and 8 cinemas in Ho Chi Minh City, besides two domestic brands, Galaxy and BHD, which also hold a rather modest market share compared to the two "big guys" same sector. It is expected that by 2030, Vietnam will have 1,050 cinemas across the country serving 210 million visitors per year. These are ideal numbers to show the potential of this market in Vietnam. But now, the Covid-19 pandemic has brought heavy consequences to the film market. Due to the epidemic situation, a series of cinemas have had to close to ensure safety against the epidemic. As a result, film projects have stalled, leading to a significant drop in box office revenue. Film producers began to look to a new platform, a streaming platform, and see it as a "quack medicine" to avoid losses. 1.3.2. Market growth rate According to a survey and from CJ CGV Vietnam, Vietnamese cinema has many advantages, in which, audience structure, movie viewing age and investment speed for film quality, and the growth of the system. Cinemas across the country are the key to sustaining growth. Compared to other countries in the region and the world, the age of Vietnamese audiences going to cinemas is much younger (about 80% of viewers are under 29 years old). With these numbers, analysts believe that in the future, the Vietnamese film market will have a lot of potential for development. However, when the Covid-19 pandemic hit, most recently, many surveys said: After global cinema revenue increased 3.6% in 2019 to $45.1 billion, the Covid pandemic -19 this year will cause the global market to plummet not only in Vietnam, research and accounting firm PricewaterhouseCoopers said in its annual forecast, predicting a 65.6% decline to 15.5 billion USD “Many theaters were forced to close and major Hollywood movies were delayed.” The company warned that "the entire movie theater ecosystem will be significantly impacted", with cinema revenue, including box office and cinema advertising (but excluding in-cinema franchise revenue). screening and film business), is set to contract globally at a compound annual rate of 2.4% in 2019 through 2024 for $39.9 billion. 1.3.3. Market trend The current Covid-19 epidemic has caused lots of disadvantages to the film market and cinemas, customers - movie enthusiasts cannot go to cinemas for many months because of fear of being infected virus. In addition, the regulations are issued and implemented very

strictly, so cinemas cannot open their doors, so filmmakers have "moved home" to streaming platforms on the Internet to meet the needs of movie enthusiasts. This also began to attract a large number of consumers, who also began to turn to online movie service applications during this prolonged epidemic period. This is also a great risk and challenge for the movie theater service system, recently in Korea there is a new trend to "save" the movie theater system, which is called "Cinema non-contact film”. Accordingly, this contactless cinema system has set up automatic ticket vending machines and self-service kiosks so that customers can buy popcorn and drinks on demand. Customers only have to scan a QR code or barcode on a smartphone instead of giving the ticket to the conductor. Especially, the contactless cinema is part of CGV's digital transformation project of CJ Group, which aims to help customers save time waiting for tickets and food and ensure safety. while satisfying the needs of customers during the current Covid-19 pandemic. 1.3.4. Market demand The Covid-19 epidemic has broken out since the beginning of 2020 and so far, the film market in the world as well as in Vietnam has not been able to recover to its normal state. Even suffering huge losses when the pandemic persists in the country, Vietnam still expressed an optimistic belief that if the epidemic is controlled well, the movie theater market will recover and thrive in the future. For example, after the epidemic subsided in the last March, several films that hit theaters had huge sales such as The Godfather (VND 395 billion), Kong vs Godzilla (VND 135 billion), Flip 48H (163 USD) billion, according to Box Office Vietnam). The commercial success of these films shows that the audience still has a high demand for entertainment and social needs after a long time of these activities being frozen. With movies with good quality content, the purchasing power of viewers is still extremely abundant, enough to fill cinemas non-stop. The cinema industry therefore also promises a brighter and more prosperous future to gradually recover and develop strongly.

Figure1.2 : The sales records of the movie The Godfather in Vietnam released 1 month after its release Source: Galaxy Studio 1.4. Competitors As mentioned above, up to now, the CGV cinema cluster is still overwhelming with 76 cinemas nationwide (21 cinemas in Ho Chi Minh City), Lotte Cinema ranks second with 42 theaters (with 8 cinemas in Ho Chi Minh City).Two Vietnamese firms, BHD of BHD Media JSC and Galaxy Cinema of Galaxy Studio JSC, respectively, have 9 and 14 theaters nationwide. Vietnamese firms like Galaxy Cinema and BHD are also trying to expand their business. BHD aims to have at least 20 cinemas by 2021. Besides large cinemas, With strong financial potential, CGV and Lotte have quickly expanded the market in Vietnam. First was Lotte, then CGV stepped into this potential market with a market share of 30% and 43%, respectively. It can be said that up to this point, the CGV cinema system is leading the market with a fairly high market share, so the challenge of competing with other brands is also very high, especially now that there are many Many domestic companies have begun to focus on investing in this market. Typically, Beta Cineplex (Beta Vietnam Media Joint Stock Company), was established and operated with the mission of bringing modern cultural values and quality, always listening, researching to understand and satisfying customers' needs, being creative in each product, dedicated to providing top quality service. Although this cinema system is new and has not developed many cinema clusters, specifically, there are only more than 10 cinema clusters across the country, but the awareness of this cinema

system is quite remarkable because the system of these cinemas is active. Active with many promotions for customers and the décor for each theater is very eye-catching and attractive.

Figure 1.3 Beta Cineplex Cinema Decor Besides, the Beta Cinemas theater system is also considered as one of CGV's competitors. Beta Cinemas has always been one of the cinema chains with the fastest recovery when the epidemic ends. The executive board of this cinema chain believes that: Cinema is an essential entertainment need, meeting the experience and social communication needs of people. After the pandemic, the entertainment demand of the audience will gradually increase again and even more due to the pressure and stress during the isolation period. People's consumption trends will also be more careful, somewhat tightening their spending and looking for more affordable models. Because of that, Beta Cinemas was put into operation with a cinema model with moderate investment, reasonable ticket prices, along with policies to optimize human resources, optimize costs, and target customer groups students and middle-income people.

Figure 1.4 Decor of Beta Cinemas Quang Trung https://baotintuc.vn/the-gioi/rap-chieu-phim-khong-tiep-xuc-xu-huong-moi-cua-nganh-giaitri-han-quoc-sau-dai-dich-covid19-20200429172954607.htm http://baochinhphu.vn/Van-hoa/Dien-anh-Viet-van-la-manh-dat-day-trien-vong/409446.vgp https://www.dealtoday.vn/ha-noi/pos/he-thong-rap-lotte-cinema-22365

https://tapchidienanh.vn/thong-rap-cgv-tren-toan-quoc.html#:~:text=%C4%90%C3%B4ng %2C%20H%C3%A0%20N%E1%BB%99i-,Tp,Ch%C3%AD%20Minh%20(21%20c %E1%BB%A5m%20r%E1%BA%A1p)

CHAPTER 2: MARKETING STRATEGY 2.1. STP’s Strategy To be able to decide exactly which market is the target market, businesses must segment and evaluate market segments and then choose which market is suitable for their capabilities. Businesses must also position their products so that customers can recognize the key benefits of the product that set them apart from other competing products in the market. Positioning is the effort to create awareness, difference in the customer's mind about the product/service. 2.1.1. Market Segment 2.1.1.1. Theory a) Definition Market segmentation is the process of dividing the market into small segments based on appropriate segmentation criteria to facilitate the process of selecting target markets. b) Criteria in market segment

Criteria

Consumer market segments

Geography

Area, region, urban, rural, plain, mountainous, domestic, international

Population

Age / generation, gender, income, occupation, educational

population

attainment, religion, nationality, race, marital status, family size, family

Personal

Personal characteristics Class/class in society, personality,

characteristics

lifestyle, concept, etc.

Behavior

Buying occasions/opportunities, benefits sought, buyer readiness, usage, loyalty… Table 2.1 Requirements for effective segmentation

Figure2.1 : Description of the level of demand in the market segment 2.1.1.2. Applying the theory to the market segment of CGV Based on theory, CGV has selected 3 criteria in analyzing the consumer market: Geography, Demographics (age, gender, occupation, income), Psychology. a) Demography 

Gender: Male/Female



Age: o 16 - 22 years old: This is a new age, the need to have fun with friends is also quite high. Therefore, the activities of eating and watching movies are also paid more attention. But most, at this age, do not have high financial capacity, still dependent on their parents. So the ability to pay the ticket price is also moderate. o 23 - 29 years old: At this age, they already have a stable job, and have a stable monthly income, no longer depending too much on the family. The need for entertainment and stress relief at work also increases. This age group often prioritizes choosing movie studios with good quality, less interested in ticket prices and services that must be suitable for themselves. o From 30 years old and above: The job is gradually stabilized, has a certain position in society, and most of them are married. The need for entertainment is still there, but they often invest their money in family rather than entertainment. There is interest but the level is not high.

Career: 

Students, students: need entertainment services, fun, opportunities to meet friends and watch movies that catch up with the trend.



Working people: need entertainment, relaxation and comfort after work.

Income: 

16-24 years old: income is mainly under 3 million a month, are price sensitive people but have a lot of free time.



24 years and older: income over 3 million a month, those who have higher incomes but are busy, movie time is usually on holidays, weekends,…

a. Geography: In 2018, 66 cinemas were put into operation in 23 provinces and cities across the country (Hanoi, Ho Chi Minh City, Hai Phong, Tay Ninh, Quang Ngai...). And by 2021, CGV has invested in building 11 more cinemas, of which 7 are located in remote provinces and cities, so the total number is 77 cinemas. Although living standards and incomes are different, everyone has the need for entertainment and fun. Understanding that, CGV has made efforts to expand its operation area nationwide. b. Mentality:

Motivation to use the service: Customers who come to cinemas in general and come to CGV mostly for the purpose of entertainment and relaxation should require a service that integrates many other services to satisfy their needs. their desire for comfort and entertainment. Personality: The tendency to want to satisfy the entertainment needs after studying and working, requires attentive service, integrates many different services to be able to use the service comprehensively, in accordance with the demand. 2.1.2. Target market selection 2.1.2.1. Theory a. Definition: Target market: is the market that the business identifies and focuses all efforts to meet Select target market: evaluate and select one or more appropriate market segments b. Principle: select and focus  Need detailed information about segments  Analyze and evaluate market segments c. How to choose “Target Market”  Evaluate the attractiveness of each market segment.  Select the number of market segments as the target market. 2.1.2.2. Applying theory to CGV's target market selection: Based on 3 criteria in analyzing the consumer market outlined above: Geography, Demographics, Psychology. CGV has selected its main target market based on the criterion D N Arithmetic. CGV targets many different types of customers, for CGV, the target customers are extremely large, however, the age factor is mainly targeted by CGV as well as a lot of interest and use of CGV's services. Therefore, in recent times, CGV has always focused on catching trends as well as creating trends in the media, especially on social networking sites. CGV actively works on Fanpage Facebook, Instagram, Youtube with movie showtimes as well as information about upcoming attractive movies that are updated regularly. Trailers of upcoming movies are uploaded quickly with the number of viewers and shares reaching

thousands and millions. Especiall...