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.

36,999 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. While the prospect of skipping the initial setup process is appealing, Buy aws account isn’t without its potential downsides. Account security, ownership verification, and potential breaches of terms of service are all factors that need careful consideration before you decide to buy an AWS account.

  2. Legal Consultation: Seek legal advice to ensure that the purchase is in compliance with AWS’s terms of service and that there are no legal implications.
    Secure the Transfer: Ensure that the account transfer process is carried out securely, with AWS’s guidance and assistance if possible. This can help prevent unauthorized access during the transition.

    https://bulkbuyaccs.com/product/buy-aws-accounts/

  3. Sure, I’d be happy to help you write comments for the Scottish Kilt Collection! Keep in mind that these comments can be used for marketing, social media, or customer engagement purposes. Feel free to customize them to fit your needs: scottishkiltcollection

  4. Sure, I’d be happy to help you write comments for the Scottish Kilt Collection! Keep in mind that these comments can be used for marketing, social media, or customer engagement purposes. Feel free to customize them to fit your needs: scottishkiltcollection

  5. Stay ahead of the curve with Turnpoint Blog where we bring the latest Facebook updates and social media news directly to your screen. Our commitment to keeping you informed means you’ll always be connected to the pulse of the digital world.

  6. It is a cryptocurrency software that uses artificial intelligence to set up and execute cryptocurrency transactions. The robot system makes it a reliable software as it reduces the risk of losing money by scanning different websites and providing you with only the best offers. quantum ai recenze

  8. ChatGPT-4 have ability to understand and generate natural language text makes it a versatile tool for improving user experiences, automating tasks, and enhancing communication across various industries and domains. However, it’s important to implement ChatGPT-4 responsibly, taking into account ethical considerations and potential biases in its responses. Best ChatGPT-4 Plugins

  9. I loved as much as you’ll receive carried out right here. The sketch is tasteful, your authored subject matter stylish. nonetheless, you command get got an edginess over that you wish be delivering the following. unwell unquestionably come more formerly again as exactly the same nearly very often inside case you shield this hike. How to hack someone’s Snapchat Account

  18. I recently had the opportunity to take a Bangla course, and I must say it was an incredible experience. Learning the Bengali language has opened up a whole new world for me, and I wanted to share my thoughts and experiences with others who might be considering taking a Bangla course

  20. Güneşli Escort Aradığınızı Bulmaya Hazır Olun
    Güneşli semti, İstanbul’un en canlı ve enerjik semtlerinden biriydi. Caddeleri, parkları ve renkli insanlarıyla her anı dolu doluydu. Bu semtte yaşayan genç bir kadın vardı: Leyla.

    Leyla, enerjik ve neşeli biriydi. Güneşli’nin hareketli atmosferiyle uyum içindeydi. Ancak yoğun iş temposu ve hayatın hızı zamanla onun içini boşaltmıştı. Bir gün, Güneşli’nin merkezindeki bir Escort salonu gözüne ilişti.

  23. Experience Ultimate Vaping Luxury with iluma dubai Collection!

    🌟 Elevate Your Vaping: Immerse in extraordinary flavors and satisfaction.
    ⚡ Fast Delivery Across UAE: 1-hour delivery in Dubai, Ajman, Sharjah; 24-hour delivery nationwide.
    💨 Instant Gratification: Iluma’s rapid nicotine release for instant pleasure.
    🏙️ Dubai Exclusive: Discover the pinnacle of vaping innovation.
    🎉 Be a Trendsetter: Embrace Iluma’s cutting-edge design and technology.

    Unlock a world of sensation, style, and satisfaction – explore the Iluma Dubai collection now!

    Shop now to indulge in a vaping experience like never before. Your journey to ultimate pleasure starts here.

  25. Thejacketmaster jackets aren’t just pieces of clothing; they have a personality of their own. Each jacket tells a story and becomes a part of your journey. nabuk leather

  28. Gain mastery over the core principles of data analytics and get ready to work with top companies. Get acquainted with the bright and exciting future of data science by enrolling in the best data analytics institute in Bangalore. Learn to empower more meaningful business decisions by representing data with tools of visualization.
    data analytics course in bangalore

  29. Your brand’s story deserves to be told in a way that truly captivates your audience, and that’s exactly what our Video Animation Services do. We don’t just animate videos; we breathe life into your narratives. From concept to execution, our team crafts animated experiences that dance, dazzle, and delight. Ready to see your brand’s story in motion? Join us on a journey where pixels come to life and your brand shines like never before with our video animation expertise.

  47. پنجره ترمال بریک

    گروه صنعتی 2000 از سال 1357 با نام شیشه حیدری آغاز به کار کرده است و تا به امروز در این عرصه فعالیت می کند و در خدمت شما عزیزان می باشد، در سال 2000 میلادی پس از ثبت رسمی از کالای شیشه حیدری به شیشه گلدار 2000 تغییر نام داد. این مجموعه از ابتدای کار در زمینه فروش و اجرای شیشه های پروژه های بزرگ ساختمانی فعالیت نموده است.

  50. There are very a great deal of details this way take into consideration. That is a fantastic indicate raise up. I provide the thoughts above as general inspiration but clearly you can find questions such as the one you talk about the location where the biggest thing might be working in honest excellent faith. I don?t know if recommendations have emerged around such thinggs as that, but More than likely that the job is clearly defined as an affordable game. Both girls and boys feel the impact of only a moment’s pleasure, through out their lives. black rutilated quartz ring

Leave a Reply

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