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.

36,416 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. We are also noticing that traditional medical doctors are also recognizing the increased interest in holistic healing and are finally starting to incorporate these healing methods into their practice to keep up with the current trends. There are many ways to obtain a construction job interview, but some are more effective than others. huaysong

  2. Howdy! I simply would like to give a huge thumbs up for the good data you have here on this post. I will probably be coming again to your weblog for more soon. huaysong

  3. Altcoin Pro Wealth gathers data from its users, sentiment from the internet and social media chatter as well as market data to accurately predict the direction of the market. altcoin pro wealth review

  8. ufabetstar365 UFABET เว็บพนันออนไลน์ สมัครUFABET บริการตลอด 24 ชั่วโมง ฝาก-ถอน ภายใน 3 นาที ทางเว็บไซต์เปิดรับเดิมพันต่างๆ UFABET แทงบอลออนไลน์ แทงบอลUFABETเว็บตรง

  9. Positive site, where did u come up with the information on this posting?I have read a few of the articles on your website now, and I really like your style. Thanks a million and please keep up the effective work. download kmspico

  10. However, Bitcode AI has received positive user-testimonials concerning this. In fact, the trading system is rapidly growing in popularity as more and more investors enter the cryptocurrency market. Here’s how this trading system is beneficial to you:
    bitcode ai review

  16. The React developers need to know the basic and advanced concepts related to the JavaScript programming language. React developers are expected to have excellent coding skills, as well as HTML, CSS, and JavaScript skills. The major focus is on building apps and designing layouts that are responsive and fast. React Training in Hyderabad

  17. We have the facilities to produce Hydrolysed Collagen in any of the competing forms including Sachets, Powders and Tablets, however Liquid Collagen is the most easily absorbed within the body collagen powder

  19. the price you pay is astoundingly low for such a top end product Reverse the early signs of ageing now, get your life back, Back in Time® is the absolute best Collagen Drink on the market! collagen powder

  20. I really like to read such good articles. If you don’t know how can affiliate marketing be used to generate passive income on Twitch? Then, Affiliate marketing can be a great way for Twitch streamers to generate passive income. For complete details about this, you can read one blog about passive income.

  21. We have the facilities to produce Hydrolysed Collagen in any of the competing forms including Sachets, Powders and Tablets, however Liquid Collagen is the most easily absorbed within the body collagen sachets

  23. Thanks for sharing this awsome post
    We are One of the greatest and most reputable manufacturers of anti-vibration mounts . We offer comprehensive vibration dampening solutions for a variety of machinery. Purchase the best
    anti-vibration pads, heavy-duty anti-vibration pads, machine vibration pads, anti-vibration rubber mounting, etc.

  25. the average Christian spends thirty minutes a day in devotional time and five hours a day watching television, what is going to have the greatest influence? Of course it will be the cool communication because it is going directly into his mind without being filtered through reason. Think about it. deliverance Ministry

  27. Really a great addition. I have read this marvelous post. Thanks for sharing information about it. I really like that. Thanks so lot for your convene. dpboss matka

  29. Spedizione in Italia in giornata, 5% di sconto su tutto se si acquista direttamente con BitCoin. Per usufruire dello sconto CONTATTACI prima di fare il checkout. anabolizzanti italia

  33. Wow! This could be one particular of the most helpful blogs We’ve ever arrive across on this subject. Basically Magnificent. I am also an expert in this topic so I can understand your effort. 먹튀검증

  34. Search is digital. Even if you run an old-fashioned brick-and-mortar shop, your customers and prospects are online. The internet is where people will begin searching for your company, products, or services. Boca Raton Digital Marketing

  35. When I read an article on this topic, 홀덤 the first thought was profound and difficult, and I wondered if others could understand.. My site has a discussion board for articles and photos similar to this topic. Could you please visit me when you have time to discuss this topic?

  36. I most likely appreciating each and every bit of it. It is an incredible site and decent impart. I need to much obliged. Great employment! You all do an incredible blog, and have some extraordinary substance. Keep doing awesome. judi slot online hahanero

  37. The opportunities that this post has opened up for me are endless. I am truly inspired by the writer’s words, and the methodology used in explaining the latest trends of data science and analytics today, in this blog. We are a group of data science aspirants, and we read this blog at regular intervals to update our knowledge on the subject. This has almost become our benchmark when it comes to explaining the data science trends, and it is our favorite hobby to brainstorm on this post in our group. Thank you for this opportunity 360 DigiTMG Provides
    https://360digitmg.com/india/hyderabad/data-science-certification-course-training-institute

  38. Indications: Our natural product contains carefully selected homeopathic ingredients which target benign mole symptoms painlessly and effectively. mole removal

  39. Though data science is all around us, not many articles or blogs talk about them in detail. So, I was taken aback when I came across this post, which explains even the slightest concepts of data science in simple terms. I had to read this post many times to get the full essence of this post. Many congratulations to the writer for coming up with such an inspiring and informative post!data science online training in hyderabad

  40. Using high quality plant extracts, our gentle topical homeopathic product is FDA listed and manufactured to the highest possible Good Manufacturing Practices (GMP). mole removal oil

  41. Check your 웹하드 순위 hosting site to determine what type of sites they can offer. Some free hosting sites do not allow you to add your own unique language scripts. If you need a scripting page that is dynamic, you may need to find an affordable pay host instead.

    Many web providers offer a myriad of add-ons to their services, but the number and type of features varies from one company to another. When comparing hosts, make sure you’re comparing the level of service that includes the specific feature you require.

  42. Choose a host that 빅데이터 전문기업 can offer you enough space for your growth. An HTML page takes very little space, but adding videos or pictures can cause your site to grow quickly.

    Web hosting services charge you based on the amount of traffic your site is getting. Find out how your host is going to bill you: some hosts charge different flat rates and your site progresses from one category to the other as it gets more traffic, or if they bill you in steps.

  43. Look for customer 메타파일 reviews from independent sites to see how decent the quality of the host. These reviews will give you a quality service from other hosts.

    If you have little web design experience, choose a web host with a great support team over one that has lots of fancy extras. As someone who is new to the field, you may rely on the helpfulness of the web hosting company to get you up and running with your site. You can benefit more use for the customer service assistance than fancier features that may not even help you.

  44. This post has provided me with many insights into data science, and has helped me broaden my career prospects. I was looking for some guidance on good institutes that offer updated and industry-specific data science courses. This post has given me everything I need to make a name for myself in this field. data science course in Chennai

  46. Using high quality plant extracts, our gentle topical homeopathic product is FDA listed and manufactured to the highest possible Good Manufacturing Practices (GMP). mole formula

  47. gemstone beads wholesale

    National Facets is a leading manufacturer of high-quality gemstones, offering a wide range of products including beads, carvings, and loose gemstones. Our team of skilled artisans uses only the finest materials and cutting-edge techniques to create stunning pieces that are perfect for jewelry making, crafting, and more

  49. Semenata.org is an online home and garden catalog. Here you will find modern products for your yard, garden, and office.
    We will bring you quality vegetable seeds, delicious tomato seeds, spice, and herb seeds. You will find quality concrete tiles, plastic car parking grids for grass, and more quality products with a lot of information.

    delicious tomato seeds

  50. The following appears to be like unquestionably fantastic. Almost all these minor points are built by using number of foundation awareness. I enjoy them considerably
    Resin Driveway

Leave a Reply

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