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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.

47,350 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

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    Application:

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    Advantages:

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    Application:

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    Advantages:

    WET ESPs are effective at removing a wide range of pollutants, including fine particulate matter and acid gases. They are also relatively easy to operate and maintain.

    Application:

    WET ESPs are commonly used in industries such as power generation, cement manufacturing, and metal processing.

    4. Kitchen Exhaust Scrubber:
    Kitchen Exhaust Scrubbers are used to remove grease, smoke, and other pollutants from commercial kitchen exhausts. To clean up the gas stream, they often employ a wet scrubbing method. Pollutants are drawn into a liquid mist that is passed through a gas stream.

    Advantages:

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    Application:

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    5. Boiler Wet Scrubbers:
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    Advantages:

    Boiler Wet Scrubbers are effective at removing a wide range of pollutants from boiler emissions. They can also help to improve boiler efficiency and reduce fuel costs.

    Application:

    Boiler Wet Scrubbers are commonly used in industries such as power generation, chemical manufacturing, and paper and pulp production

    6. Scrubber for Jet Venturi Fumes:
    The Jet Venturi Fume Scrubber is a type of wet scrubber that sucks in the gas stream to be treated by creating a vacuum with a high-velocity water stream. The gas stream is then accelerated and combined with the water stream after being driven via a Venturi throat. As a result, there is extensive contact between the gas and liquid, which effectively removes contaminants.

    Advantages:

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    7. Vent Gas Scrubber System:
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    Application:

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    8. High Energy Venturi Scrubber System:
    High Energy Venture Scrubber Systems, which combine a High Energy Venture Scrubber and a Cyclon Separator, are intended to remove fine micron and submicron material from industrial and commercial effluent gases. These scrubbers are efficient at removing a wide range of air pollutants, including dust, fumes, vapours, and mists. Because there is so much contact between the gas and the liquid because of the turbulence, pollutants can be removed effectively.

    Advantages:

    High Energy Venturi Scrubber Systems are particularly effective at removing fine particulate matter and other pollutants such as sulfur dioxide and nitrogen oxides.

    Application:

    High Energy Venturi Scrubber Systems are commonly used in industries such as power generation, cement manufacturing, and steel production.

    9. Fume Scrubber:
    Fume Scrubbers are used to remove harmful fumes and gases from industrial processes. They typically use a wet scrubbing system to remove pollutants from the gas stream.

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    Fume Scrubbers are effective at removing a wide range of pollutants, including corrosive gases and acid mists. They can also help to improve workplace safety and air quality.

    Application:

    Fume Scrubbers are commonly used in industries such as metal processing, chemical manufacturing, and pharmaceuticals.

    10. Foundry Wet Scrubbers:
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    Advantages:

    Foundry Wet Scrubbers are effective at removing a wide range of pollutants from foundry emissions. They can also help to improve workplace safety and air quality.

    Application:

    Foundry Wet Scrubbers are commonly used in industries such as metal casting, aluminum production, and iron and steel manufacturing.

    11. Food Industries Wet Scrubber:
    Food Industries Wet Scrubbers are used to remove pollutants such as odours, smoke, and grease from food processing emissions. They typically use a wet scrubbing system to remove pollutants from the gas stream.

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    Food Industries Wet Scrubbers are effective at removing a wide range of pollutants from food processing emissions. They can also help to improve workplace safety and air quality.

    Application:

    Food Industries Wet Scrubbers are commonly used in food processing facilities, such as those that produce baked goods, meat products, and dairy products.

    12. Chemical Factory Wet Scrubber:
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    Chemical Factory Wet Scrubbers are effective at removing a wide range of pollutants from chemical manufacturing emissions. They can also help to improve workplace safety and air quality.

    Application:

    Chemical Factory Wet Scrubbers are commonly used in industries such as pharmaceuticals, petrochemicals, and plastics manufacturing.

    13. Generator Wet Scrubber:
    Generator Pollutants including nitrogen oxides and sulfur dioxide are removed from diesel generator exhaust using wet scrubbers. NOX, HC, CO, and PM, which includes any observable smoke and soot, are among the exhaust emissions from diesel-powered generators. Our dust collector technology completely captures the pollutants in the exhaust flow and emits only clean air. To clean up the gas stream, they often employ a wet scrubbing method.

    Advantages:

    Generator Wet Scrubbers are effective at removing a wide range of pollutants from diesel generator emissions. They can also help to improve air quality and reduce environmental impacts.

    Application:

    Generator Wet Scrubbers are commonly used in industries such as power generation, data centers, and backup power systems.

    FGD & Venturi Scrubbers Frequently Asked Questions
    Q. What is an FGD scrubber for air pollution control?
    A. An FGD scrubber, also known as a Flue Gas Desulfurization scrubber, is a device used to remove sulfur dioxide (SO2) from flue gases emitted by industrial processes or power plants.

    Q. How does an FGD scrubber work to control air pollution?
    A. An FGD scrubber uses a chemical process to absorb sulfur dioxide from flue gases. Typically, a slurry containing a sorbent, such as a limestone or lime, is sprayed into the flue gas stream. The sorbent reacts with sulfur dioxide, forming a solid byproduct that can be disposed of safely.

    Q. What are the main components of an FGD scrubber system?
    A. An FGD scrubber system consists of several key components, including an absorber tower, a reagent storage and preparation system, a slurry circulation system, a mist eliminator, and a wastewater treatment system.

    Q. What types of pollutants can an FGD scrubber remove?
    A. FGD scrubbers are primarily designed to remove sulfur dioxide (SO2) from flue gases. However, they can also capture other pollutants such as mercury, particulate matter, and some trace metals.

    Q. What are the advantages of using an FGD scrubber for air pollution control?
    A. The advantages of using an FGD scrubber include the effective removal of sulfur dioxide, which helps reduce acid rain and respiratory issues. Additionally, it can capture other pollutants, improve air quality, and comply with environmental regulations.

    Q. What are the environmental benefits of using Venturi scrubbers?
    A. Venturi scrubbers provide environmental benefits by reducing particulate matter emissions, which can contribute to improved air quality and human health. They also aid in the removal of certain gases and odors, helping to minimize potential environmental nuisances. By controlling pollution at its source, Venturi scrubbers contribute to sustainable and responsible industrial practices.

    Q. How effective are FGD scrubbers in reducing air pollution?
    A. FGD scrubbers are highly effective in reducing sulfur dioxide emissions. They can achieve removal efficiencies of up to 90-99% for sulfur dioxide, depending on the design and operating conditions.

    Q. Are there different types of FGD scrubbers available?
    A. Yes, there are various types of FGD scrubbers, including wet scrubbers (such as limestone/gypsum and seawater scrubbers), dry scrubbers (such as spray dry and dry injection scrubbers), and electrostatic precipitators.

    Q. What is a venturi scrubber for air pollution control?
    A. Venturi scrubber is an air pollution control device that uses the principle of a venturi nozzle to remove pollutants from industrial exhaust gases. It is particularly effective in capturing particulate matter and some gases.

    Q. How does a venturi scrubber work to control air pollution?
    A. Venturi scrubber operates by creating a high-velocity gas stream through a narrow throat section, which creates a pressure drop. Polluted gases are forced through the venturi throat, where they collide with liquid droplets. The pollutants adhere to the liquid droplets, which are then separated and collected.

    Q. What are the key components of a venturi scrubber system?
    A. Venturi scrubber system typically includes a venturi scrubber chamber, a liquid or water injection system, a gas inlet, a mist eliminator, and a collection and disposal system for the captured pollutants.

    Q. What types of pollutants can a venturi scrubber remove?
    A. Venturi scrubbers are effective in removing various pollutants, including particulate matter, dust, aerosols, gases such as sulfur dioxide and hydrogen chloride, and certain volatile organic compounds (VOCs).

    Q. What are the advantages of using a venturi scrubber for air pollution control?
    A. Venturi scrubbers offer high collection efficiencies for particulate matter, including fine particles. They are also effective for capturing gases and certain volatile organic compounds. Venturi scrubbers have a simple design, require minimal maintenance, and can handle high gas temperatures and high particulate loadings.

    Q. How effective are venturi scrubbers in reducing air pollution?
    A. Venturi scrubbers can achieve high collection efficiencies for larger particles, typically above 90%. However, their efficiency for smaller particles may vary depending on factors such as particle size, inlet concentration, and operating conditions.

    Q. Are Venturi scrubbers suitable for high-temperature applications?
    A. Venturi scrubbers can be designed to handle high-temperature gas streams, but there are limitations. The materials of construction and thermal insulation must be carefully selected to withstand the temperature without compromising the scrubber’s performance or integrity. Higher temperatures can also affect the choice of liquid used for scrubbing and may require additional heat management measures.

    Q. Are there different types of venturi scrubbers available?
    A. Yes, there are different types of venturi scrubbers, including single-stage venturi scrubbers, multi-stage venturi scrubbers, and high-energy venturi scrubbers. Each type has specific applications and operating principles.

    Q. Can FGD scrubbers and venturi scrubbers be used together in an air pollution control system?
    A. Yes, FGD scrubbers and venturi scrubbers can be used together in an air pollution control system. FGD scrubbers primarily target sulfur dioxide removal, while venturi scrubbers are effective in capturing particulate matter and certain gases. Combining these technologies can enhance overall pollutant removal efficiency.

    Q. How do Venturi scrubbers compare to other air pollution control devices?
    A. Venturi scrubbers have certain advantages over other air pollution control devices. Compared to electrostatic precipitators, they can handle higher gas flow rates and are more effective for removing fine particles. Compared to wet scrubbers, Venturi scrubbers have a more compact design and can handle higher gas velocities. However, the choice of the most suitable control device depends on the specific requirements of the application.

    Q. What industries or applications commonly use FGD scrubbers?
    A. FGD scrubbers are commonly used in industries such as power generation, coal-fired plants, oil refineries, cement production, and waste incineration, where sulfur dioxide emissions need to be controlled.

    Q. What industries or applications commonly use venturi scrubbers?
    A. Venturi scrubbers find applications in various industries, including metal refining, chemical processing, pulp and paper manufacturing, pharmaceuticals, food processing, and incineration plants.

    Q. Are there any regulations or standards related to the use of FGD scrubbers and venturi scrubbers for air pollution control?
    A. Regulations and standards regarding the use of FGD scrubbers and venturi scrubbers vary across countries and regions. Environmental agencies and regulatory bodies typically set emission limits and guidelines for air pollution control technologies, including scrubbers, to ensure compliance with air quality standards and environmental protection. It is important for industries to adhere to these regulations and standards when implementing scrubber systems.

    Q. Can Venturi scrubbers be used for removing heavy metals from emissions?
    A. Venturi scrubbers are primarily designed for particulate matter removal and may have limited effectiveness in removing heavy metals from emissions. For the efficient removal of heavy metals, specialized control technologies such as wet scrubbers with specific chemical reagents or electrostatic precipitators with high-efficiency collection plates are often employed.

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