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.

49,448 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. 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. 마사지

  3. Good post……
    Define Clear Objectives: Before implementing TOSCA, organizations should define clear testing objectives, identify key success metrics, and establish a roadmap for test automation.
    Invest in Training: Provide comprehensive training to testing teams to ensure they are proficient in using TOSCA’s features and capabilities effectively.
    Start Small, Scale Gradually: Begin with pilot projects or small-scale automation initiatives to gain familiarity with TOSCA and gradually scale automation efforts as confidence and expertise grow.
    Collaborate Across Teams: Foster collaboration between development, testing, and operations teams to ensure alignment on testing priorities and maximize the benefits of test automation.
    Monitor and Iterate: Continuously monitor test automation efforts, gather feedback from stakeholders, and iterate on testing processes to drive continuous improvement and optimization.TOSCA Training in Hyderabad

  4. I really wanted to make a brief word to say thanks to you for all of the amazing points you are sharing at this website. My time intensive internet lookup has finally been honored with really good facts and strategies to go over with my colleagues. I ‘d claim that we visitors are rather fortunate to dwell in a remarkable website with so many lovely professionals with valuable guidelines. I feel somewhat fortunate to have encountered your entire site and look forward to plenty of more exciting minutes reading here. Thanks a lot once again for a lot of things. radar138

  5. The online slot game on our site, namely JAMUSLOT, is the slot game that is most popular with slot players, because slot games can produce very tempting prizes, namely very large cash prizes. If you want to get a winning slot game, it’s only on our website JAMUSLOT is a famous slot game site in Asia that always provide a very big win.

  7. WAKTOGEL
    adalah situs yang selain menghadirkan permainan game online populer dan terlengkap, situs satu ini pun telah menghadirkan transaksi yang sudah sangat mudah sekali, sepat dan aman pula. Cukup banyak metode transaksi yang di tanamkan ke dalam situs terpercaya ini, yaitu salah satunya adalah bank transfer lokal yang sudah sangat sering sekali di gunakan untuk media transaksi yang sudah cukup resmi dan teraman di Indonesia.informasi lebih jelas bisa kunjungin diwebsite kami WAKTOGEL
     merupakan situs game online terbesar se asia yang memberikan jackpot
    besar setiap hari.

  8. Buy Aws Accounts & DigitalOcean, Verified And Fast Delivery
    Cloud accounts are offered at a reasonable cost that offer the most secure security and protection that is available that allows you to collaborate with your team members, and take advantage of all the computing power of your computer.
    https://doxiedigital.com/

  9. PALU4D akan memberikan pengalaman bermain judi online yang sangat menyenangkan kepada semua membernya. Tak heran jika member yang sudah bergabung di dalam situs yang satu ini tak terhitung jumlah nya. Jika kalian masuk kedalam situs ini, kalian akan di suguhkan dengan tampilan situs yang bagus dan menarik. Serta berbagai macam fitur yang bisa kalian gunakan dan akan menambah kepuasan kalian dalam bermain game judi online.informasi lebih jelas bisa kunjungin diwebsite kami PALU4D merupakan situs judi online terbesar se asia yang memberikan jackpot
    besar setiap hari.

  12. Your post highlights the potential of starting a side hustle or part-time business alongside a regular job to generate additional income. It’s a way to test ideas and make money on the side. For additional insights, click here

  25. FUSOTOTO
    adalah situs yang selain menghadirkan permainan game online populer dan terlengkap, situs satu ini pun telah menghadirkan transaksi yang sudah sangat mudah sekali, sepat dan aman pula. Cukup banyak metode transaksi yang di tanamkan ke dalam situs terpercaya ini, yaitu salah satunya adalah bank transfer lokal yang sudah sangat sering sekali di gunakan untuk media transaksi yang sudah cukup resmi dan teraman di Indonesia.informasi lebih jelas bisa kunjungin diwebsite kami FUSOTOTO
     merupakan situs game online terbesar se asia yang memberikan jackpot
    besar setiap hari.

  29. Sebagai agen game KOPERTOTO
    online gacor yang terbaik dengan winrate paling tinggi di Indonesia. Agen slot gacor terbaik serta terpopuler di saat ini, Kami berupaya membagikan penawaran dalam permainan game slot online terbaik. Pada tiap Pemain game online ataupun siapapun yang sah bergabung dengan Kami. Tidak terdapat di spensasi ataupun perbeda-an dalam servis, seluruh orang bakal memperoleh jasa yang serupa.informasi lebih jelas bisa kunjungin diwebsite kami KOPERTOTO
     merupakan situs game online terbesar se asia yang memberikan jackpot
    besar setiap hari.

  32. Hal seperti ini juga dapat untuk membuktikan bahwa RTP WAKTOGEL adalah salah satu situs slot gacor online yang sudah menjadi populer dan sudah di percayai menjadi agen game online terbaik sekarang ini. Situs Game online terpercaya ini juga telah menghadirkan beberapa provider slot terbaik dan terpopuler, serta juga telah menghadirkan tips dan trik agar para membernya bisa mendapatkan jackpot dengan sangat cepat atau menang besar.informasi lebih jelas bisa kunjungin diwebsite kami RTP WAKTOGEL merupakan situs game online terbesar se asia yang memberikan jackpot

  36. WAKTOGEL
    adalah situs yang selain menghadirkan permainan game online populer dan terlengkap, situs satu ini pun telah menghadirkan transaksi yang sudah sangat mudah sekali, sepat dan aman pula. Cukup banyak metode transaksi yang di tanamkan ke dalam situs terpercaya ini, yaitu salah satunya adalah bank transfer lokal yang sudah sangat sering sekali di gunakan untuk media transaksi yang sudah cukup resmi dan teraman di Indonesia.informasi lebih jelas bisa kunjungin diwebsite kami WAKTOGEL
     merupakan situs game online terbesar se asia yang memberikan jackpot
    besar setiap hari.

  38. My spouse and i got very thankful when Peter could finish off his reports through your ideas he grabbed from your blog. It is now and again perplexing to simply choose to be giving for free steps that many most people might have been selling. We consider we’ve got you to thank for that. Most of the explanations you’ve made, the easy website menu, the friendships your site make it possible to foster – it’s many fantastic, and it’s really assisting our son and us believe that the matter is thrilling, and that is particularly pressing. Thank you for all! bonekslot

  39. I was just browsing through the internet looking for some information and came across your blog. I am impressed by the information that you have on this blog. It shows how well you understand this subject. Bookmarked this page, will come back for more. 누누티비

  41. Your post highlights the potential of starting a side hustle or part-time business alongside a regular job to generate additional income. It’s a way to test ideas and make money on the side. For additional insights, earn money tips&trick

  43. ร้านขายกัญชา กัญชาที่ออกฤทธิ์เข้มข้นและก็แรงจัดเดี๋ยวนี้มีหลายสายพันธุ์ โดยในวันนี้ 420THC จะมากมายล่าวถึงสายพันธุ์ลูกผสมอย่าง Bruce banner strains สายพันธุ์กัญชาที่เข้มแรงหึกเหิมสายเขียว โดยดีที่สุดในสายพันธุ์กัญชาลูกผสมที่มีการผสมระหว่างสายพันธุ์ sativa 60% ผสมกับสายพันธุ์ indica 40%

  45. I wish more authors of this type of content would take the time you did to research and write so well. I am very impressed with your vision and insight. 뉴토끼

  47. I’ve read some good stuff here. Definitely worth bookmarking for revisiting. I surprise how much effort you put to create such a great informative website. 섹파

  50. There a few intriguing points in time in this posting but I do not determine if I see these people center to heart. There is certainly some validity but I will take hold opinion until I consider it further. Very good article , thanks therefore we want a lot more! Added to FeedBurner in addition 789สล็อต

Leave a Reply

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