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.

36,652 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  3. JaamBearing

    جام بلبرینگ فروشنده انواع بلبرینگ ، رولبرینگ ، یاتاقان با قیمت و کیفیت مناسب | 02133930709 – 09121087451

  5. JaamBearing

    جام بلبرینگ فروشنده انواع بلبرینگ ، رولبرینگ ، یاتاقان با قیمت و کیفیت مناسب | 02133930709 – 09121087451

  6. خرید هاست

    ابر نوین ارائه دهنده انواع هاست وردپرس و ووکامرس، هاست لینوکس، سرور مجازی ایران، سرور ابری، سرور مجازی اروپا، ثبت دامنه طراحی سایت و سئو می باشد.

  7. I wanted to take a moment to express how much I appreciate your blog post. It was a true source of inspiration.

  9. Thank you so much for sharing this great blog.Very inspiring and helpful too.Hope you continue to share more of your ideas.I will definitely love to read. sbobet88

  10. Ayurveda, the ancient holistic healing system from India, has been revered for its profound understanding of human health and wellness for thousands of years. One of the intriguing facets of Ayurveda is its approach to sexual health, which emphasizes the connection between intimacy and overall well-being. Ayurvedic sex medicine harnesses the power of natural herbs, therapeutic practices, and lifestyle adjustments to enhance sexual vitality, foster emotional intimacy, and promote harmonious relationships. In this article, we explore the principles of Ayurvedic sex medicine and how it can contribute to a fulfilling and balanced sexual life.
    https://www.ayurleafherbals.com

  11. دانلود بیت رپ

    قصد دانلود بیت دارید؟ در مرجع تخصصی دانلود بیت میتوانید انواع بیت غمگین و شاد و بیت جدید، را رایگان دانلود نمایید. دانلود بیت گنگ و شاخ بصورت رایگان و سریع

  13. Thanks for sharing this quality information with us. I really enjoyed reading. Will surely going to share this URL with my friends. sbobet

  14. خرید سرور مجازی

    ابر نوین ارائه دهنده انواع هاست وردپرس و ووکامرس، هاست لینوکس، سرور مجازی ایران، سرور ابری، سرور مجازی اروپا، ثبت دامنه طراحی سایت و سئو می باشد.

  15. خرید سرور مجازی

    ابر نوین ارائه دهنده انواع هاست وردپرس و ووکامرس، هاست لینوکس، سرور مجازی ایران، سرور ابری، سرور مجازی اروپا، ثبت دامنه طراحی سایت و سئو می باشد.

  17. 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 enjoyed reading. sbobet

  20. I wanted to thank you for this great read!! I definitely enjoying every little bit of it I have you bookmarked to check out new stuff you post. poker88 asia

  25. I admire this article for the well-researched content and excellent wording. I got so involved in this material that I couldn’t stop reading. I am impressed with your work and skill. Thank you so much. Visa île Maurice

  26. 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. happie

  28. I appreciate everything you have added to my knowledge base.Admiring the time and effort you put into your blog and detailed information you offer.Thanks. dewibola

  29. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. water

  30. 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. GLUCOTRUST

  31. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. GLUCOTRUST

  33. 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. BOOSTARO

  34. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. BOOSTARO

  36. 롤토토추천

    We are an esports betting site. You can bet on various online game competitions such as League of Legends, StarCraft, Valorant, and Counter Striker, and you can also bet on games from Twitch, and Kakao TV streamers.

  38. Inat Box Apk isn’t just an individual organizer; it’s also a powerful collaboration tool. Share your task lists, schedules, and notes with colleagues, friends, or family members. Collaborate in real-time, assign tasks, and track progress effortlessly. With Inat Box Apk, teamwork becomes more efficient, communication clearer, and projects better organized. Embrace the power of collaboration and download Inat Box Apk to supercharge your productivity today.

  40. Vincent Bubolo‘s journey as a health and wellness expert started with a passion for helping others. He pursued a rigorous education in chiropractic care, mastering various techniques to address a wide range of health issues. Today, his dedication and expertise make him a sought-after specialist in Kennesaw.

  42. As a holistic health practitioner Vincent Bubolo recognizes the interconnectedness of body, mind, and spirit. His approach to health and wellness involves addressing the root causes of health issues, rather than merely treating symptoms.

  43. Beyond his role as a chiropractic specialist, Vincent Bubolo envisions creating healthier and happier communities in Kennesaw. Through educational workshops, seminars, and outreach programs, he aims to spread awareness about the benefits of holistic wellness, inspiring people to take charge of their health and embrace a more fulfilling life.

  44. At the core of Vincent Bubolo practice lies a philosophy that emphasizes the body’s innate ability to heal itself when provided with the right tools and guidance. His approach to health and wellness centers on empowering individuals to make informed choices about their well-being, whether it’s through chiropractic adjustments, nutrition, exercise, or stress management techniques. Vincent believes that by taking an active role in their health, his clients can experience long-lasting improvements and overall vitality.

  46. Recruitment Application Portal Applications from eligible residents looking to join any job posting are now being accepted through the job application portal. We will give you crucial details about the Federal Government Job Form for 2023-2024, the Federal Government Job Portal, the deadline for applications, and other relevant details that will help you submit a successful application.

  47. Your post is very helpful to get some effective tips to reduce weight properly. You have shared various nice photos of the same. I would like to thank you for sharing these tips. Surely I will try this at home. Keep updating more simple tips like this.
    world largest religion

  49. Thank you because you have been willing to share information with us. we will always appreciate all you have done here because I know you are very concerned with our. Shisha

Leave a Reply

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