Marketing Audit Assignment: Case Analysis of Village Cinemas

Question

Task: The aim of this marketing audit assignment is to conduct a systematic, comprehensive and objective analysis of the marketing activities undertaken by the chosen company. In addition, you are also required to provide at least three (3) recommendations for the company. The marketing audit report should be no more than 3000 words in length excluding the executive summary, table of contents, tables, charts/graphs, the reference list and appendices.

Your assessment should show an application of relevant marketing concepts, theories, and analytic tools learnt in the unit. The mark for this assessment will depend primarily on presenting appropriate and supporting evidence and on the ability to critically write and present the marketing audit report. You are strongly encouraged to use the Academic Learning Centre (ALC) facilities to assist you in preparing professional report and presentation.

Answer

Introduction
According to the research on marketing audit assignment, a marketing audit is a strategic theory of an organization to analyze and evaluate systematically, which helps to interpret the marketing environment for business. It also analyses both internally and externally in a comprehensive way. Marketing audit helps to come out with a proper strategy to achieve the goals by making objectives. It also shows opportunities to grow business further.
To understand the concept of the marketing audit, the Village Cinemas has been taken as an example. The study has reflected the processes of the marketing audit, adapted by the Village Cinemas, to grow their business, along with gaining more profits.

Situation analysis
Company analysis
The Village Cinemas is the Australian based brand of film exhibition which mainly shows the mainstream, blockbuster, family movies, children themed films as well as documentaries. The company was founded in 1954 with its headquarter in Melbourne. The company became the joint venture between the Amalgamated Holdings Limited (AHL) and Village Roadshow that formed as an Australian Theatres. The company also operates with various firms within the global markets either being the joint venture or having a license in which they also operate in the Event Hospitality and Entertainment Events Cinemas and many more international cinema chains.

Village cinemas of Australia

Figure 1: Village cinemas of Australia
Source: (Statista. 2020)

PESTLE analysis
The analysis of a company's macro environment is done through analysis the PESTEL factors of that organization and hence, the same is provided for the Village cinema that is as follows,

Factors	Analysis
*Political*	This factor has a significant impact on the element that influences the long term profitability of the Village Cinemas within the global market. The company operates within the Media industry in dozens of countries and exposes it to the political environment as well as system risks. As opined by Chen and Yang (2019, p. 260), for achieving the successful position the company needs to diversify the political environment and the system risks. Thus, the political instability of the country, level of corruption, tariff and trade regulations, tax legislation, wage and pricing regulations, employee benefits, media work regulations are all such factors that highly impact on the company.
*Economic*	The village cinemas utilise the economic factors of the country such as the growth rate, economic indicators of the industry and inflation along with the growth rate of the media industry as well as consumer spending. As stated by L’AUDIT MARKETING and DE, (2019., p. 156), the cost of movie tickets are indeed much higher, all the profits do not go inside the pockets of the theatre owners. They only get 30% of the profit money. Hence, the higher the cost price of the tickets, the higher the profit of the theatre owner
*Social*	From some past years, the selling rate of movie tickets is reducing significantly, resulting in the low profit of the theatre owners. This is due to the introduction of online movie services. After the introduction of Netflix like web series apps and with the presence of the internet, people are showing less interest in the case of going to the movie theatres to watch a film (Gâd?u, 2017, p. 40). They found more comfort in watching their favourite shows and films at home.
*Technological*	With the advancement of science and technologies, the owners of movie theatres are now also using modern technologies to attract more customers. They have started providing 3D glasses to make the viewers feel like they are realistic in nature. Besides this, they are using more advanced sound boxes to provide the best sound effects for their valuable customers as well.
*Legal*	The legal factors and frameworks are not robust enough for protecting the rights of intellectual property of the organization (Hashemet al., 2016, p. 65). Thus, the Village Cinemas evaluate the factors like employment laws, consumer protection law, safety and health laws, data protection and most importantly copyrights, intellectual property law and patents.
*Environment*	Different markets possess the distinguished environmental norms and standards that impact upon the profitability of the organization along with contrasting the different laws regarding environmental and liability (Micleaet al., 2016, p. 1040). Thus, the Village cinemas evaluate the certain environmental standards such as waste management in media works, water and air pollution within the media industry, laws that regulate the environmental pollution, attitudes towards the ecological and green products that are required for operating into the domestic as well as foreign markets.

Table 1: PESTLE analysis of Village Cinemas Limited
Source: (Developed by the learner)

Competitive analysis
The main competitors of the Village Cinemas are the Odeon cinemas, Cinemas, Ster Cinemas and Aegli cinemas and are referred to as the multiplayer cinemas rather than the neighbourhood cinemas as there is no comparison. Moreover, the most significant competitors of the Village Group are the Odeon and Ster Cinema but they have never surpassed the Village Cinemas in terms of the sales as well as within the cinema market of Australia in which 26% is owned by the Village Cinemas. As explained by Surya et al., (2019, p. 17), the competitive advantage of the Village Cinemas is that it is located in suitable and accessible locations for the public to come to enjoy the shows along with providing certain good discount prices and packages that the other company's lack off. Thus, the company like Odeon is trying to match up the level of Village cinemas and now has stood as their biggest competitors but still, the Village Cinema has set a benchmark with their adequate distribution channel, film production towards the up-to-date multi cinemas as well as home entertainment that has integrated the company's names with cinematic innovation and creation.

Customer analysis
The main target group of the company is the teenagers who range between 15-24 years of age and are a constant of 10.2% of the population in Australia. These teenagers are interested in watching movies and enjoying the unleashed experience and are mainly involved in the blockbuster arena. Thus, as suggested by Balyk and Kolisnyk (2017, p. 90), this group rarely possesses a high amount of money in their pockets for which the Village Cinemas limited provides them greater discounts in the process of the tickets, offers like 1+1 on Wednesdays and much more that helps them to attract the millennial. The next group of targets are the family and kids that consist of people within the age group of 25-44 years and the children's between 5-14 age groups and are accompanied by their basic needs. Then comes the adults with high income who value the special experience and thus, spend more money on it and want to get entertained on a high level. After all, the people who are retired from their job and are above 55 years of age are also targeted by the Village cinemas who mainly adores the quality and comfort of their movie experience and thus, are provided with the same by the company (Roy, 2016, p. 55).

Swot and Tows analysis

Strengths

Reliable supplier base
A strong community of dealers
Good return upon the capital expenditure
A successful track record for developing the new products
A strong network of distribution (Krykavskyy and Dmytriv, 2017, p. 200)

Weaknesses

Gaps in the product range
Limitation for expansion due to the incompatible present business model.
Adequates to cope up with challenges
Not very successful for integrating firms with the distinguished work culture.

Opportunities

Development of the market-leading to the dilution of the competitive advantage
Stability in the free flow of cash
Engagement of new customers through the online marketing channels (Kitchenko and Kuchina, 2019, p. 53)
The contemporary technology leading to differentiated pricing strategy along with new trends in consumer behaviour.

S/O strategies

Being an existing established company, the company has the chance of expanding in the developing countries with using their brand name and creating a great market position
The adequate supply chain network and distribution channels help in enhancing the better price negotiation.

W/O strategies

The limitation in the product range requires to be countered by focusing on the trends of new consumer behaviour and media industry advancement.

Threats

Intense level of competition
The growing strength of the local distributors
The demand for highly profitable products are seasonal (Gómez et al., 2019, p. 10)

S/T strategies

The company can regain its reputation through customer and employee satisfaction which can automatically promote the profitability of the company and increase consumer loyalty.

W/T strategies

The alternative focus areas need to be emphasized such opening more convenient cinema halls that are accessible to the people and increases their comfort level through uniques service lines.

Segmentation, Targeting and Positioning
Nowadays, the segmentation, targeting and positioning, collectively called STP, is a common model, adapted by many companies to marketing purpose. It is one of the most preferable models, followed by organizations. The STP model focuses more on the products, rather than the customers. This model helps to be engaged with the audiences more and thus helps to make new marketing strategies to achieve new goals.

Segmentation techniques used by the company
Segmentation technique is a popular technique used by many companies, and the Village Cinemas is not an exception in nature. They also use this kind of technique widely. With the help of segmentation techniques, the company used to divide some categories of people and make a chart according to it. Segmentation technique has been divided into four parts: demographic, psychographic, behavioural and geographic. Segmentation technique helps the company by helping them to target the right customers, who can be enthusiastic about the advertisement done by the company. To partition the market, it is very much important to divide some groups into similar categories. The company can base the division into one or more qualities. Dividing the audiences in this way can help to target them for marketing purposes in a better way. Demographic segmentation is one of the most common types of segmentation. It refers to the division of audiences based on observation. Combining this kind of segmentation with other types, helps the theatre owners to narrow down their market even more(Šimi?et al., 2018, p.11). Information can be easily accessible and that’s also with a low cost with the help of this kind of

Segmentation.Behavioural segmentation is a type of marketing segmentation which divides the audiences according to their behaviour. On the other hand, geographic segmentation helps the theatre owners to separate the audiences based on their location. Moreover, psychographic segmentation helps the audiences to split the audiences according to their psychological manner. ?

The target market of the company
Targeting market helps the Village Cinemas to break a large marketing area into smaller segments, to target a specific group of people within the large group of audiences. It identifies a group of customers based on their unique nature and focuses totally to serve them. Targeting marketing has been differentiated into four categories. Undifferentiated targeting is one of the most common targeting strategies. It defines a market as a large market with no particular segment. The company uses a mixture of the market for the entire market. Due to this strategy, the company thinks that each customer has a similar need which can be fulfilled by a common marketing need. Differentiated marketing is another type of targeting the market. It exploits the differentiation of marketing segments by defining a particular marketing mix for every segment. There is another type of targeting market, called concentrated targeting. With this strategy, the company targets only a single segment with only one marketing mix. It helps to understand the motives and needs of the split customers and provides a specialized type of mixture of marketing. Customized marketing is another kind of marketing. This kind of targeting marketing allows the company a face to face discussion with the customers to know more about their needs(Hassall and Rowan, 2019, p.143).

The positioning of the company's product and services
With the help of the positioning marketing strategy, the marketing department of the Village Cinemas used to make an image of their new products for the targeted customers. This kind of marketing is usually done via the use of price, product, place and promotion. The positioning marketing strategy states the company to focus on its products as well as their services. The satisfaction of the audiences is the key to the growth of every business. Hence, after segmenting the customers based on some definite parameters, the marketing team of the Village Cinemas promotes their products and services to their targeted customers. They always try to satisfy their customers by providing them with their best services and also by developing their products according to the customer's requirements.

Marketing mix audit (4P's of the marketing mix)
The 4p's of the marketing mix helps the film exhibition company, Village Cinemas to keep more focus on their products, promotions, products and price to improve them even for to provide their loyal customers with a better service.

Product
When a movie is selected by the target audiences it is important to be clearly defined by the audiences during the time of marketing. The knowledge of the theme of the film, core casting, genre and similar others should be included within the marketing. A movie is an intellectual product which can be delivered in many ways, like advertising via television, similar others.

Price
Pricing is a very important factor for a theatre company. As they get only 30% of the profit for each sold ticket, they have to fix the cost of each ticket in a way so that they remain affordable to people and the company can also make a certain profit by them. The profit percentage of each movie ticket is negotiable in between the theatre owner and the producer based on percentages, theatrical schedules, market segments and promotional budgets.

Promotion
Promotion is a very necessary tool in the field of marketing for a movie. It is very much important to inform the customers regarding the new films launched near the individual movie theatres. Hence, the Village Cinemas also have to promote their newly launched movies. The promotion can be held in various ways to promote films by the company, including advertisements on television and similar others.

Place
With the help of science and technologies, the theatre companies also have to improve themselves as well. The Village Cinemas has tied up with Google so that their loyal audiences can easily find them on the internet with a single click. It is a part of smart marketing as well. ?

Recommendation
Based on the provided information given by the study, some suggestions can be given for the Village Cinemas to help them to improve their products and services.

Accommodation is very much important to hold a customer for long. So, the Village cinemas should work on it even more. They should improve their previous chairs with advanced ones, which should be cosy so that the customers can enjoy the movies in a relaxed way. Not only that, but they should look upon the heating and cooling machines as well so that the customers can enjoy some quality time there.

Besides focusing on the accommodation, the company should also develop their audio machines, to provide its customers with a dynamic sound effect.

In the case of watching a movie, besides the audio part, the video effect is also very much important. So, the theatre department also improves the giant screen in such a way, that the customers can watch the movies with both the 3d and 4d effects as well. ?

Conclusion
The study has reflected on the marketing audit of a film exhibition brand named the Village Cinemas, based on Australia. An overview of the theatre company has been provided. The company has been analyzed thoroughly with the help of pestle analysis. With the help of pestle analysis, the external, as well as the internal factors affecting the company, has been identified and explained briefly. Besides this, to analyze the internal factors affecting the company, the SWOT analysis has also been provided. The different types of marketing strategies adopted by the company have also been discussed. The company has adapted the segmentation, targeting and positioning or popularly called the STP strategy, which has also been explained briefly. The 4ps of the company has also been provided to know their strategies even in a better way. Finally, some recommendations have been given to improve their products and services as well. ?

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