by

Revenue Management Application on Karaoke Industry in Taiwan

Industry Overview
The Karaoke culture is popular in East Asia. Unlike the karaoke in bars/clubs offered publicly, the karaoke style here I want to discuss is the one has private rooms for different size of parties, and that is why the concept of Revenue Management can be applied broadly in this industry. I will specifically focus in Taiwan, because the karaoke culture in Taiwan is mature, and the company even expand the business to other countries.

           

The word “Karaoke” is originated from Japanese, so is the culture. Karaoke is firstly developed in Japan in 1970’s and then expanded to other countries in Asia in 1980’s, but the origin of the idea is obscure. Reference: http://en.wikipedia.org/wiki/Karaoke

 

In Taiwan, karaoke plays an important role in people’s nightlife. It’s the place for family, friends, colleagues, and even doing business. The karaoke industry in Taiwan is dominant by one company which has two different brands, one for higher class (more expensive) and the other one for lower class (cheaper). Higher class brand charges more with its glorious and hotel-look lobby, fancier private room decoration, more delicious food, and convenience (in-room restroom). There is another premium venue of that company that doesn’t see as a brand but more like a status, because it is limited to members, and joining the membership is by invitation (http://www.cashboxvip.com/viprespect.html). Thus, people start to consider going to karaoke as a luxurious entertainment, not to mention it seems to be a trend for the hotels in Hong Kong and Macau to design presidential suites with an “entertainment room” when we visited last June. Since people can easily spend hours in karaoke, the revenue can be generated in many ways. I will discuss the application based on my observations and experiences in Taiwan, and karaokes in Taiwan also do a better job than karaokes in Singapore on applying revenue management.

(Website of karaoke in Singapore:

a. http://www.partyworldktv.com.sg/promotion-29305210352041938144.html

b. http://www.kbox.com.sg/StaticContent.aspx?u=6)

         

The following are the overview of basic levers applied in Taiwan:

Space: (not applied in Singapore)
Karaoke has limited capacity, as the number of private rooms are fixed. Also, the size of the private rooms usually vary from small for 3 to 4 people to party size, 18-20 people, or even super party size for up to 35 people.


Time:
The time slot is limited, but the minimum consumption unit vary as the size of private rooms. Usually the rack rate is charged by hour, but promotion packages are charged based on 3-hour consumption, and you can extend by hour as the basic unit.
Also, karaokes apply dynamic pricing according to peak/off-peak hour and high/low season. The prices are differentiated by time of day, day of week, and month of year.


Occupation: (not applied in Singapore)
In Taiwan, students and senior are privileged for cheaper price. People older than the age of 55 are able to enjoy senior discount, as 55 is the minimum age to retire in Taiwan. The reasons may be students are more price-sensitive, but they also have more free time to spend in karaokes, and seniors also have more free time once they retire.
(Unfortunately, the website of the dominant company is in Mandarin, but I think you can still figure out how variable their prices are! Variable pricing charged by per person: http://www.cashboxparty.com/ktv/web_ktv/web_ktv.asp
Rack rate charged by hour per room: http://www.cashboxparty.com/ktv/map/price/kp17.html)

The Levers
SPACE
The inventory unit for karaokes is private room. A karaoke can be as big as a maze with narrow hallways and unorganized directions so it can utilize the space to its maximum. Karaokes define the space implicitly, because the size categories vary according to the space of each branch. Likewise, the capacity of private rooms varies in different branches. The following are the different private room sizes of the biggest karaoke branch in that company:
Small – 2 to 7 people
Medium – 8 to 10 people
Medium big – 10 to 12 people
Big – 12 to 15 people
Super big – 15 – 18 peope
Party size (“Presidential Suite”) – 18 – 35 people

                           
Other utilizations of space:
a. Other than the main revenue generator, private rooms, karaokes utilize spaces for a major human need, food. Consumers not only can order in-room dining in a la carte style, but also can go to buffet area for all-you-can-eat service. Of course the delicacy level is depending on the class of the brand.

b. Another space utilization for karaoke is to selling company-branded products, such as stationary or products signed by famous singers, but it accounts for a very little part of the revenue.

c. In one of the signature karaokes of this company, there is a restaurant serving Cantonese Dim-Sum inside the karaoke. It is a rare but a brilliant concept. For people who go to karaoke but is not that into singing, they may go to that restaurant so they can eat food at the table with more comfortable height. Also, after an all-night singing, people in Taiwan like to have either a late night snack or early breakfast before dawn. The idea of the restaurant can attract people who bother which restaurant to go to. http://www.cashboxparty.com/ktv/cashboxdining/

         
Karaokes tend to save spaces for private rooms, as the more parties they can accommodate, the more revenue it can generate. To increase more revenue by using space, both brands may consider charging private rooms according to the distance to buffet area. The closer to buffet area, the more expensive the room rent, since people can save more time on going back and forth for food and drinks.

TIME
Karaoke sells time explicitly. The prices are either charged by per private room per hour, or by per person per certain time slot (ex. by per person for 3 hours). The pricing differs as follows:
a. Hour – separate a day into 5 different slots: (http://www.cashboxparty.com/ktv/map/price/kp17.html)
07:00-10:59 – the cheapest
11:00-15:59
16:00-17:59
18:00-19:59
20:00-22:59(Sunday to Thursday) 20:00-01:59(Friday and Saturday) – the most expensive
23:00-06:59(Sunday to Thursday) 02:00-06:59(Friday and Saturday)

b. Day of week
As what I mentioned above, Friday and Saturday are considered as “peak season”, and Monday to Thursday are “off-peak season”. The pricing for Sunday is slightly higher than weekdays but much lower than Friday and Saturday.

c. Month of year
This pricing differentiation is specially catered to student groups. Since students in Taiwan have winter vacation (3 to 4 weeks long in January and February) and summer vacation (8 to 9 weeks long in July and August), it is less often for students to go to karaokes with friends or classmates.

d. Special holidays
Public holidays are considered as peak season for karaokes, such as Christmas and spring break (can last from 3 – 5 days to celebrate Tomb-sweeping Day and Children’s Day)

Apart from the above explicit specifications of time, I suggest karaokes can consider to charge implicitly by the number of songs. It is not uncommon that the time we pay for the private room is about to end, but my favorite song is not played yet. If people can pay by songs, then such situation can be avoided and customers can also leave without pity.


PRICE
Karaoke uses physical and non-physical rate fences to differentiate its pricing, but the application of physical rate fences is far less than non-physical.
a. Physical rate fences are the size of private rooms, minimum charge for party size private room, and location of the karaoke branch. It is obvious that karaoke locating in downtown business area or in prime cities can charge higher than other locations. (Minimum rental list for Presidential Suite: http://www.cashboxparty.com/ktv/act/1001118_17/)

b. Non-physical rate fences are occupation (student), age (senior and birthday discount), membership (membership of karaoke and certain credit card holder), and time.

Other non-physical rate fences that I think is doable are advanced reservation and distance to buffet. To manage inventory more efficiently, karaokes can consider charge slightly higher for walk-ins in peak hour or hot season. Also, as what I have mentioned, it is possible for people to pay more for a private room which is closer to buffet area.

39,932 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. I have read your article; it is very informative and helpful for me. I admire the valuable information you offer in your articles. Thanks for posting it. Your content is nothing short of brilliant in many ways. I think this is engaging and eye-opening material. Thank you so much for caring about your content and your readers. This is a wonderful article, Given so much info in it, These type of articles keeps the users interest in the website, and keep on sharing more … good luck . Great info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have 먹튀검증업체

  2. It is a good site post without fail. Not too many people would actually, the way you just did. I am impressed that there is so much information about this subject that has been uncovered and you’ve defeated yourself this time, with so much quality. Good Works! Thank you a bunch for sharing this with all of us you actually realize what you are talking about! Bookmarked. Please also seek advice from my site =). We could have a hyperlink change contract between us! You make so many great points here that I read your article a couple of times. Your views are in accordance with my own for the most part. This is great content for your readers. 토토커뮤니티

  3. This is my first time visit to your blog and I am very interested in the articles that you serve. Provide enough knowledge for me. Thank you for sharing useful and don’t forget, keep sharing useful info: Meticore Review on . Well, this got me thinking what other workouts are good for those of us who find ourselves on the road or have limited equipment options. ProVen Review on . Thanks for picking out the time to discuss this, I feel great about it and love studying more on this topic. It is extremely helpful for me. Thanks for such a valuable help again. It is very good, but look at the information at this address. 실시간배팅

  4. Hello, I read the post well. 메이저토토 It’s a really interesting topic and it has helped me a lot. In fact, I also run a website with similar content to your posting. Please visit once
    ^^

  5. I truly welcome this superb post that you have accommodated us. I guarantee this would be valuable for the vast majority of the general population. I definitely enjoying every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog, and have some great contents. Keep up the good work. Impressive web site, Distinguished feedback that I can tackle. Im moving forward and may apply to my current job as a pet sitter, which is very enjoyable, but I need to additional expand. Regards 메리트카지노

  8. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards. Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article.I will make sure to be reading your blog more. You made a good point but I can’t help but wonder, what about the other side? !!!!!!Thanks I have read your article; it is very informative and helpful for me. I admire the valuable information you offer in your articles. Thanks for posting it . 해외놀이터

  9. I am impressed. I don’t think Ive met anyone who knows as much about this subject as you do. You are truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog you have got here. I am always searching online for storys that can accommodate me. There is obviously a multiple to understand about this. I feel you made few salubrious points in Attributes moreover. Detain busy, awesome career! You bear through a awesome vacancy. I sanity definitely quarry it moreover personally suggest to my buddys. I am self-possessed they determination be benefited from this scene. 안전사설토토

  11. I am impressed. I don’t think Ive met anyone who knows as much about this subject as you do. You are truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog you have got here. I am always searching online for storys that can accommodate me. There is obviously a multiple to understand about this. I feel you made few salubrious points in Attributes moreover. Detain busy, awesome career! You bear through a awesome vacancy. I sanity definitely quarry it moreover personally suggest to my buddys. I am self-possessed they determination be benefited from this scene. 메이저사이트

  12. i am for the first time here. I found this board and I in finding It truly helpful & it helped me out a lot. I hope to present something back and help others such as you helped me. I am really enjoying reading your well written articles. It looks like you spend a lot of effort and time on your blog. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work. I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. In fact your creative writing abilities has inspired me to start my own Blog Engine blog now. Really the blogging is spreading its wings rapidly. 카지노가입쿠폰

  13. Interesting topic for a blog. I have been searching the Internet for fun and came upon your website. Fabulous post. Thanks a ton for sharing your knowledge! It is great to see that some people still put in an effort into managing their websites. I’ll be sure to check back again real soon. what a brilliant post I have come across and believe me I have been searching out for this similar kind of post for past a week and hardly came across this. Thank you very much and will look for more postings from you. I feel strongly that love and read more on this topic. If possible, such as gain knowledge, would you mind updating your blog with additional information? It is very useful for me. 토토검증

  14. This is an awesome motivating article.I am practically satisfied with your great work.You put truly extremely supportive data. Keep it up. Continue blogging. Hoping to perusing your next post . I really enjoy simply reading all of your weblogs. Simply wanted to inform you that you have people like me who appreciate your work. Definitely a great post. Hats off to you! The information that you have provided is very helpful. I’m excited to uncover this page. I need to to thank you for ones time for this particularly fantastic read !! I definitely really liked every part of it and i also have you saved to fav to look at new information in your site. 먹튀폴리스

  15. Good post. Thanks for sharing with us. I just loved your way of presentation. I enjoyed reading this .Thanks for sharing and keep writing. I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Big thanks for the useful info. I would like to say that this blog really convinced me to do it! Thanks, very good post 온라인카지노사이트

  16. Thank you for some other informative blog. Where else could I get that type of information written in such an ideal means? I have a mission that I’m just now working on, and I have been at the look out for such information. Thanks for sharing excellent information. Your web site is so cool. I’m impressed by the info that you have on this site. It reveals how nicely you understand this subject. Bookmarked this website page, will come back for extra articles. This is a wonderful article, Given so much info in it, These type of articles keeps the users interest in the website, and keep on sharing more … good luck. 안전공원코드

  18. Have you ever considered about including a little bit more than just your articles? I mean, what you say is important and all. However think of if you added some great visuals or video clips to give your posts more, “pop”! Your content is excellent but with images and videos, this website could undeniably be one of the very best in its niche. Fantastic blog! Hello Thank you for giving me useful information. Please keep posting good information in the future I will visit you often. Thank you. I am also running the site. This is a related site, so please visit once. Have a niceday! 룰렛하는법

  19. Hey, this day is too much good for me, since this time I am reading this enormous informative article here at my home. Thanks a lot for massive hard work.

  20. Hey, this day is too much good for me, since this time I am reading this enormous informative article here at my home. Thanks a lot for massive hard work.

  21. The web is actually bogged lower along with phony weblogs without any actual information however the publish had been wonderful as well as really worth the actual study. Thanks with regard to discussing this particular beside me. 온라인카지노

  26. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Big thanks for the useful info. jackson o doherty

  27. Enchante Residence BSD City hadir sebagai hunian rumah mewah terbaru yang ada di BSD Tangerang. Launching perdana di awal 2022 pengembangnya sendiri adalah Sinarmas Land yang sudah berpengalaman. Developer Sinarmas telah berhasil mengembangkan mahakaryanya melalui Enchante BSD.

  31. I know your expertise on this. I must say we should have an online discussion on this. Writing only comments will close the discussion straight away! And will restrict the benefits from this information girl attitude quotes in hindi

  34. I searched a lot on this topic and finally found it. I read your post and was very impressed. We visit this site frequently to appreciate your comments. keonhacai

  35. When you see the money you will be saving with a debt consolidation loan, don’t automatically think about how you can spend it! Poor spending habits are probably what got you into the debt in the first place, so get to work on changing those habits. Consider putting the extra money into paying off the loan sooner or saving it for retirement.If you need help organizing your finances, research several debt consolidation agencies. Use the BBB to ensure that the company you’re working with is a good one to choose.
    https://thedebtreviewcompany.co.za/

  37. Nice blog thanks for sharing, I really enjoy simply reading all of your weblogs. Simply wanted to inform you that you have people like me who appreciate your work. Definitely a great post. Hats off to you! The information that you have provided is very helpful.data science training in rohtak

  45. This is a really cool article. I really envy people who can write well like you. The content of the text was well drawn in my head and was well understood. You seem to have great writing skills. I will visit often to read articles. I also want my website to be as great as yours. Thank you for your visit.
    토토사이트 코드

Leave a Reply

Your email address will not be published. Required fields are marked *