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.

41,736 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  2. this is an exquisite detail for sharing this useful message. I am dazzled by using the facts you have got on this weblog. It causes me from a couple of points of view. A debt of gratitude is in order for posting this yet again. Very informative submit! There is lots of information right here which could help any enterprise get began with a successful social networking marketing campaign. You made such an exciting piece to examine, giving every situation enlightenment for us to gain information. Thank you for sharing the such records with us to study this… I in reality like your weblog. Incredible article. It is maximum evident, human beings should analyze earlier than they may be capable of . 카지노

  5. Best Hotels in Vizag Daspalla has the One of the key features of three-star hotels that contribute to a great ambience is the quality of their rooms. These hotels usually offer spacious and clean rooms that are tastefully decorated, providing a comfortable and cozy environment for guests. The rooms are typically equipped with all essential amenities, such as a comfortable bed, a television, and a well-stocked mini-bar. The use of warm and inviting color schemes, as well as thoughtful touches like plush pillows and soft lighting, enhance the overall coziness of the stay.

    For Reservations contact : 0891-2717301
    Follow us on : Facebook Instagram
    Visit Daspalla Executive Court

  6. This blog is really great. The information here will surely be of some help to me. Thanks!. Wow, What an Outstanding post. I found this too much informatics. It is what I was seeking for. I would like to recommend you that please keep sharing such type of info.If possible, Thanks. Thanks for every other informative site. The place else may just I get that kind of information written in such an ideal means? I have a venture that I’m just now operating on, and I have been on the look out for such information.I did so love looking through reports created on this site. They can be striking and has now loads of handy information and facts. I loved reading this post. Thanks for the exceptionally instructive and simple to follow guide. 토토매거진 검증업체

  7. I discovered your site ideal for me. It consists of wonderful and useful posts. I’ve read many of them and also got so much from them. In my experience, you do the truly amazing.Truly i’m impressed out of this publish . Positive site, where did u come up with the information on this posting? I’m pleased I discovered it though, ill be checking back soon to find out what additional posts you include. 토토브라더검증사이트

  8. This post is extremely radiant. I extremely like this post. It is outstanding amongst other posts that I ve read in quite a while. Much obliged for this better than average post. I truly value it! imr 4064

  9. Good website! I truly love how it is easy on my eyes it is. I am wondering how I might be notified whenever a new post has been made. I have subscribed to your RSS which may do the trick? Have a great day! Thank you so much for the post you do. I like your post and all you share with us is up to date and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job. Thanks for sharing this information. I really like your blog post very much. You have really shared a informative and interesting blog post with people.. This is actually the kind of information I have been trying to find. Thank you for writing this information. 토토시대 먹튀검증

  10. you in reality make it appearance so everyday with your presentation besides i find this have an effect to be genuinely some thing which i determine i’d never recognise. It has all the earmarks of being unreasonably obfuscated and unbelievably huge for me. I’m searching forward in your subsequent publish, i’ll enterprise to get its dangle! This is such an extremely good useful resource that you are giving and also you part with it to no cease. I really like seeing web page that fathom the cost. Im satisfied to have observed this post as it’s something but’s a captivating one! I’m with the aid of and large looking out for satisfactory posts and articles so i take delivery of im fortunate to have found this! I believe you will add all of the extra later on. Top notch information, there’s no vulnerability that your web site may additionally truly be having application similitude issues. Each time i look at your blog in safari, it seems great at any price while establishing in net explorer, it makes them cowl issues. I essentially expected to provide you a short watch out! Other than that, heavenly site! Tons gratitude to you once more for all the facts you distribute,properly put up. I used to be quite curious about the item, it’s quite spurring i need to yield. I really like touring you website considering i through and huge run over interesting articles like this one. Notable process, i essentially like that. Do hold sharing! Regards . I got too much interesting stuff to your weblog. I wager i am no longer the best one having all the leisure here! Maintain up the good work. We’re without a doubt thankful in your blog post. You’ll find quite a few techniques after traveling your post. I was exactly attempting to find. Thanks for such post and please preserve it up. Terrific work. I definitely thank you for the essential information in this phenomenal difficulty and assume extra improbable posts. A great deal liked for purchasing a price out of this greatness article with me. I’m loving it really! Looking ahead to another superb article. Proper luck to the maker! Absolutely the exceptional! That is my first time i visit right here. I found so many drawing in stuff on your weblog, mainly its discussion. From the gigantic thousands of comments to your articles, i construe i am with the aid of all record no longer by any way the handiest one having all of the unwinding here! Hold to do remarkable. I’ve been importance to create some thing like this on my site and you’ve given me an concept. You actually make it appearance so ordinary along with your presentation anyway i discover this have an effect to be definitely some thing which i parent i would never comprehend. It has all of the earmarks of being unreasonably obfuscated and unbelievably extensive for me. I am looking ahead for your subsequent publish, i’ll enterprise to get its hang! That is such an super aid which you are giving and you element with it to no cease. I like seeing website online that fathom the fee. Im glad to have discovered this publish because it’s some thing however’s a fascinating one! I am via and huge looking out for fine posts and articles so i be given im fortunate to have located this! I believe you’ll upload all of the greater later on. Good day, there is no vulnerability that your website might also sincerely be having web program closeness problems. Right when i observe your web page in safari, it appears first-rate anyway when starting in ie, it makes them cover problems. I actually expected to give you a brief be careful! Beside that, out of the ordinary website! That is the splendid perspective, however is just no longer assist with making every sence at all broadcasting approximately that mather. Basically any technique a wealth of thank you in spite of i had try to propel your very own article in to delicius regardless it is whatever however’s an difficulty the use of your statistics objections might you have got the choice to if it’s not too much problem, survey the concept. Thankful over again 주간토토 먹튀검증사이트

  12. Very informative post! There is a lot of information here that can help any business get started with a successful social networking campaign. nimbus

  13. This article was written by a real thinking writer without a doubt. I agree many of the with the solid points made by the writer. I’ll be back day in and day for further new updates. konglo123

  14. When I read your article on this topic, the first thought seems profound and difficult. There is also a bulletin board for discussion of articles and photos similar to this topic on my site, but I would like to visit once when I have time to discuss this topic . The article composing business is going extraordinary for me at this moment, and the vast majority of my prosperity is because of the substance that you post here. I utilize your substance to compose my articles, and the substance makes my great article incredible. A very awesome blog post. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. I was exactly searching for. Thanks for such post and please keep it up. Great work 토토팡검증사이트

  16. Truly, this article is really one of the very best in the history of articles. I am a antique ’Article’ collector and I sometimes read some new articles if I find them interesting. And I found this one pretty fascinating and it should go into my collection. Very good work! Your blog provided us with valuable information to work with. Each & every tips of your post are awesome. Thanks a lot for sharing. Keep blogging . That is the excellent mindset, nonetheless is just not help to make every sence whatsoever preaching about that mather. Virtually any method many thanks in addition to i had endeavor to promote your own article in to delicius nevertheless it is apparently a dilemma using your information sites can you please recheck the idea. thanks once more 카이소

  17. What I don’t grasped is altogether you’re by and by not entirely more particularly liked than you may be at present. You’re particularly clever. You comprehend thusly broadly with respect to th n the off chance that it is one thing to do with Girl insane! Your individual stuffs unbelievable. Constantly handle it up! You are particularly valued than you might be right now. 카지노군단

  18. hello friends, good article and nice arguments commented aonce in a while read a few new articles if i locate them interesting. And i found this one quite captivating and it ought to pass into my collection. Superb paintings! 안전지대 토토

  19. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. I was exactly searching for. Thanks for such post and please keep it up. Great work. best online casino india

  21. Really nice and interesting post. I was looking for this kind of information and enjoyed reading this one. Keep posting. Thanks for sharing. I just couldn’t leave your website before telling you that I truly enjoyed the top quality info you present to your visitors? Will be back again frequently to check up on new posts. 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. This is an excellent resource about turmeric and how it can be a benefit towards healthy well-being. Thank you for sharing this information . 검증나라

  22. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. I was exactly searching for. Thanks for such post and please keep it up. Great work. ikaria lean belly juice

  25. Nicely picked details, many thanks to the author. It’s incomprehensive in my experience at present, however in common, the convenience and importance is mind-boggling. Regards and all the best .. 끝판왕토토

  27. 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. CALIBURN GK2

  30. I’m glad I found this web site, I couldn’t find any knowledge on this matter prior to.Also operate a site and if you are ever interested in doing some visitor writing for me if possible feel free to let me know, im always look for people to check out my web site. passive income ideas

  36. winch rope suppliers

    Shandong Santong Rope Co., Ltd specializes in the production of high-end ropes and new materials. They are exported to the United States, the United Kingdom, France, Australia, the Middle East and other parts of the world, and are highly commended by domestic and foreign consumers. Our company has many patents, twelve for utility models, one for invention and two for design. We also boast two domestically registered trademarks and are the first rope company listed on the OTC market.

  38. winch rope suppliers

    Shandong Santong Rope Co., Ltd specializes in the production of high-end ropes and new materials. They are exported to the United States, the United Kingdom, France, Australia, the Middle East and other parts of the world, and are highly commended by domestic and foreign consumers. Our company has many patents, twelve for utility models, one for invention and two for design. We also boast two domestically registered trademarks and are the first rope company listed on the OTC market.

  43. You made such an interesting piece to read, giving every subject enlightenment for us to gain knowledge. Thanks for sharing the such information with us to read this… du học nhật bản

  49. Completely shocked by the results of this site! I cannot find any difficulty using it. Works perfectly and very easy to execute as well! 5 stars for them! Suggested to everyone! famous design firms

  50. Discover true power of the modern, robust and completely open source payment gateway, which is feature rich and user friendly. Don’t compromise the quality of your service by going with older, limiting technology. open source payment gateway

Leave a Reply

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