Marketing Case of Imax China

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A Ticket to Dream

——Marketing Case of IMAX China

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Student Number: 54151876

Date: 5 Nov, 2015

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A TICKET TO DREAM——MARKETING CASE OF IMAX CHINA

Content

Background        2

Opportunity        4

Customer Analysis        3

Competitor Analysis        5

Marketing Strategy        6

Focus on Technology        6

Corporate with Local Company        7

Improve Brand Value        8

Potential Problem        9

Recommendation        10

Key Take-aways        10

Image        10

Maintenance        10

Association        10

X-factors        11

Reference        12

Company Background

The word “IMAX” came into Chinese public’s awareness in 2009 with the huge success of the movie Avatar. Actually the concept of IMAX, which means Image Maximum, has been planed and implemented for more than 40 years. Found in 1967 and located in Toronto, Canada and New York, America, IMAX is a company listed on NASDAQ in 1994 and now worth 1.6 billion. Around the world, IMAX is related to marvelous film-watching experience and significant revolution of film industry.

IMAX company entered into Chinese market in 1998, aiming at science and educational film area at first. In 2012 IMAX China speeded into rapid development with large increasing in the number of IMAX theaters and IMAX movies. The income of IMAX China reached 78 million dollar in 2014, a 40% increase compared to the previous year. In October 2015, IMAX China listed on Hong Kong stock market successfully.

The two major business of IMAX Company are: Business for theaters including the design and technical support for theater systems, the service and maintenance for theater operation. Business for film companies by producing films into IMAX format and sharing the profit from movie tickets.

From the 2014 annual report provided by IMAX corporation, North America is the largest market for IMAX. The number of IMAX theater in North America is almost half of the total. Great China has become the second largest market with rapid expansion in recent years and contributes 54% of the total profit with 27% of total income in 2014.

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The detailed financial information is also provided in the annual report. According to the financial data, the gross margin in 2014 is 173 million. The profit from operations keeps increasing, with more revenue generated and less costs spent on equipment and services.

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(Data source: 2014 Annual Report of IMAX Corporation)

Opportunity

It is said that the film industry in China is experiencing its golden age. Chinese government has published a series of policies to promote culture industry and there are less restrictions to film industry. Also the consumption level of Chinese customers keeps increasing with the fast economic growth and watching movie is gradually becoming a lifestyle for Chinese people. Cinemas are trying to attract more customers by improving the quality of theaters and adoping advanced technology, targeting at middle-end or high-end market. Obviously, IMAX has the greatest chance to expand in Chinese market.

Customer Analysis

The customer category of IMAX includes two parts: business customer and individual customer. The global business customers are primary film studios and movie theaters while individual customers are people who buy the tickets.

In China, five years ago the number of theater screens was just 4000 but now the figure reaches 24000, including state-operated and private enterprises. The top 10 cinema lines occupy 49% of the total box office and Wanda Cinema stays in the first place, accounted for 14.5% of box office shares nationwide. Differ from traditional theaters, modren cinema lines have a intergeted system of film-making, distribution and projection. These cinema lines have acumulated adequate captial and resources related to film industry.

With fierce competition among different cinema lines, these companies are trying to attract more customers by technological innovation. It is necessary to convince the audiences with aesthetic fatigue for traditional film-watching to buy the tickets. In other words, they need to sell a ticket to dream, not just to a story.

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(Data source: The raking list of Chinese cinema lines of 2014)

For individual customers, in reality, the economic difference affects consumer behavior and expense level. But Chinese individual customers show great enthusiasm for watching films in cinema. In 2014, the person-time of watching film in theaters reached 0.83 billion, creating

29.6 billion RMB box office. The average price of one ticket is about 35 RMB.

From the 2014 annual report of Chinese film audience published by Analysis International, we can grasp a better understanding of Chinese audiences. The statistics show about 28% people watch movie in cinema for 1-5 times per year and the percentage of people who watch more than 20 movies per year reaches 22%. For most Chinese audiences, the frequency of watching movie is once a month.

The regional distribution has a strong connection with the economic level. East China, the most developed region, occupies 34% audiences. With highly developed culture industry, Guangdong, Jiangsu and Beijing become the core regions of film watching, affecting the box office of other regions.