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.

46,489 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. Dijamin akun yang Anda mainkan akan menghasilkan keuntungan besar. Gratis bocoran slot gacor untuk setiap pemain slot setia sehingga hanya bermain beberapa putaran saja sudah bisa mendapatkan maxwin serta scatter yang banyak.

  3. Tingkat kemenangan yang tinggi juga merupakan salah satu faktor Game Slot Online Madu88 banyak digemari oleh masyarakat, hanya dengan beberapa kali putaran permainan saja Anda sudah bisa mendapatkan banyak scatter dan dijamin langsug maxwin.

  5. Cukup daftar Game slot gacor dan mainkan satu user ID saja Anda sudah bisa memperoleh keuntungan berlipat. Anda pun berhak untuk menjadi pemenang di situs Raden138, maka dari itu jangan tunda lagi pendaftarannya.

  6. Com seu transfer porto seguro para caraiva, será necessário fazer o transporte de carro privativo com zenon táxi e vans para caraiva, o aeroporto mais próximo de caraíva é o aeroporto de Porto Seguro. taxi caraiva

  9. This content is written very well. Your use of formatting when making your points makes your observations very clear and easy to understand. Thank you. eudoratex

  13. 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! acheter des commentaires instagram

  18. Unlock the path to PMP success without the stress! Introducing the hassle-free solution to conquering your PMP Exam – pay someone to take it for you. Our seasoned professionals are here to navigate the complexities of the Project Management Professional exam on your behalf, ensuring you not only pass but excel. Whether you’re a busy professional or just seeking a surefire way to secure that PMP certification, we’ve got the expertise to make it happen. Your success is our priority, and with our discreet and reliable service, you can confidently take the next step in your project management career. Say goodbye to exam anxiety and hello to PMP achievement – Pay Someone To Take My PMP Exam today!

  24. Virtual Experiences

    ANMP Creative is a dynamic digital services company specializing in immersive and innovative solutions. With a keen focus on brand gamification, CGI cinematics, virtual experiences, 3D solutions, and digital brand storytelling, ANMP stands at the forefront of digital transformation. Their expertise in crafting engaging, visually stunning narratives and interactive experiences positions them as a leader in elevating brand presence in the digital landscape. ANMP Creative’s commitment to cutting-edge technology and creative excellence drives their mission to transform how brands connect with their audiences.

  25. Great Information sharing .. I am very happy to read this article .. thanks for giving us go through info.Fantastic nice. I appreciate this post. 420 Carts

  26. Unlock success in your PMP (Project Management Professional) journey by choosing the smart path—Pay Someone To Take My PMP Exam for you! Our skilled professionals are here to alleviate the stress of exam preparation and ensure you achieve the PMP certification with ease. Whether you’re a busy professional or facing time constraints, we offer a confidential and reliable service to help you pass your PMP Exam with flying colors. Trust our experts to navigate the complexities of project management knowledge areas, process groups, and more. Take the leap toward career advancement without the worry—pay someone to take your PMP Exam and make your goals a reality!

  29. Hi there, I found your blog via Google while searching for such kinda informative post and your post looks very interesting for me info

  30. Ingrown Toenail

    We Specialize in Cold Laser Therapy for Fungal Nail Infections and are the leader in NZ being the first to offer the service. We also specialize in Biomechanical Assessments and prescribing 3D Printed Custom Orthotics, We lead the way in treating Ingrown Toenails and performing Nail Surgery. We are one of the few practices offering Medical Pedicures and aim to develop this offering further.

  32. home renovation

    Ridgetop Renovations provides a personal remodeling experience with a primary focus on job cleanliness, timing accuracy, and customer communication. This unique approach to renovation, of focusing on elite customer experience rather than a high volume of work, is establishing Ridgetop Renovations as a high-end service provider in the Tri-cities area of eastern Tennessee.

  36. Dual Therapy Action

    Hot-Ice Therapy is a website dedicated to offering natural solutions for migraine relief. They specialize in products like the Relieva mask and Hot-Ice Relief Cap, which combine hot and cold therapy, light-blocking technology, and eco-friendly materials. These products are designed to provide targeted relief from migraines, stress, and related symptoms, offering a drug-free alternative to traditional pain relief methods. The site emphasizes its commitment to natural, effective solutions for migraine sufferers.

  41. corporate event food truck catering

    Food truck catering is a great way to cater for an exciting wedding. Stay ahead of the latest trends by choosing a popular food truck in LA to feed your guests and put a smile on the faces. Naturewell Juice Bar LA can provide a juice and smoothie food truck to fresh your wedding guests at lower price than that charged by a traditional caterer. Whether you want to serve refreshing juices after the ceremony or let your guests enjoy healthy smoothie bowls at the wedding reception, Naturewell has lots of creative ideas. Find out how a food truck caterer can help you start your new life together in the best way possible.

  43. food truck product promotions

    Pre-wedding parties and rehearsals are very popular and can be almost as much fun as the wedding itself If you are planning on a pre-wedding get together and want to serve cheap and healthy food Naturewell Juice Bar food truck is available to hire. Your event guests can enjoy delicious smoothies and juices to keep them refreshed and hydrated. Find out how a Naturewell food truck can help your celebrations get off to the best start possible and give your guests insight into the fabulous catering they can expect on your big day.

Leave a Reply

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