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.

49,615 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  4. What is the best computer virus remover?. My computer is slow as hell and freezes on me. Most of the time, I have to restart my computer. I think I may have a virus on my computer. What is the best software to remove the viruses of my computer?. 에볼루션카지노

  5. Wow, excellent post. I’d like to draft like this too – taking time and real hard work to make a great article. This post has encouraged me to write some posts that I am going to write soon. hong kong diamond

  7. I am a new user of this site so here i saw multiple articles and posts posted by this site,I curious more interest in some of them hope you will give more information on this topics in your next articles. 바카라사이트추천

  8. This article was written by a real thinking writer without a doubt. I agree many of the with the solid points made by the writer. I’ll be back day in and day for further new updates. hong kong diamond

  10. The Hellstar Hoodie is a creation of the popular streetwear brand, Supreme. It made its debut in the brand’s Fall/Winter 2019 collection and has since become a highly coveted item among fashion enthusiasts. The hoodie features a black and white checkered design with the iconic Supreme logo on the front and back. Its unique design, coupled with the brand’s popularity, has contributed to its immense success.

  11. The Incel Wiki serves as a platform that echoes the academic discourse surrounding the concept of involuntary celibacy. Originating as an academic sociological term, “incel” denotes individuals experiencing involuntary celibacy, akin to other recognized life adversities like poverty. Academic studies, such as the Donnelly study of 2001, established inceldom as a sociological phenomenon, highlighting its harmful effects rather than confining it to an internet subculture. Notable researchers like Denise Donnelly, Elizabeth Burgess, and Laura Carpenter have contributed to understanding involuntary celibacy’s complexities, emphasizing its diverse manifestations across gender, race, religion, and socioeconomic backgrounds. The wiki maintains that inceldom isn’t a unified movement but a gender-neutral life circumstance, fostering diverse perspectives within self-identified incel communities. It recognizes the heterogeneity of these communities, encompassing varying racial compositions, political ideologies, and views on the root causes and solutions to involuntary celibacy. While acknowledging the presence of online forums like Incels.is and /r/foreveralone, the wiki disavows any association with individuals resorting to violence, emphasizing that the majority of incels do not condone such actions. Through its alignment with academic research and advocacy for nuanced understanding, the Incel Wiki endeavors to provide a balanced portrayal of involuntary celibacy as a multifaceted societal issue.

  12. Join the Botogon trading community to engage with like-minded traders, share insights, and collaborate on strategies to enhance your trading journey. Whether … forex robot

  20. Good to become visiting your weblog again, it has been months for me. Nicely this article that i’ve been waited for so long. I will need this post to total my assignment in the college, and it has exact same topic together with your write-up. Thanks, good share. indoslot88

  21. Chaga mushroom tea appears to be shown a great deal of mankind through Ruskies artice writer Alexandr Solzhenitsyn using your partner’s new ‘Cancer Ward’ the spot predominant reputation has been curable of pisces with the help of the help of this relaxer. Chaga 에볼루션카지노 가입

  24. Interesting topic for a blog. I have been searching the Internet for fun and came upon your website. Fabulous post. Thanks a ton for sharing your knowledge! It is great to see that some people still put in an effort into managing their websites. I’ll be sure to check back again real soon. https://thetalktoday.com/

  25. Pretty post . It will useful for everybody, Thumbs up to your excellent information you made in this blog. You’ve done an excellent job.
    “Visit Site: “”Welcome to Maithri Systems, your one-stop destination for top-notch laptops and desktops coupled with exceptional sales and services. At Maithri Systems, we take pride in offering a wide array of high-quality laptops and desktops, catering to various needs and preferences.
    “” Link: Best Computer Sales and Services“

  26. Perjudian sudah ada selama berabad-abad. Bahkan Pakar69 akhirnya menjadi begitu lazim di masyarakat bahwa hal itu telah dianggap untuk dapat menjadi bagian dari masyarakat kontemporer manusia. Dari Romawi kuno, hingga Cina kuno, hingga peradaban modern, perjudian memang menjadi salah satu aspek file. Bahkan, bahkan berbagai raja paling terkenal diketahui telah berjudi dan beberapa akhirnya kecanduan di atasnya. Hari ini, Anda akan melihat bahwa banyak orang di seluruh dunia sekarang mengunjungi internet karena taruhan online.

  27. I really loved reading your blog. It was very well authored and easy to undertand. Unlike additional blogs I have read which are really not tht good. I also found your posts very interesting. In fact after reading, I had to go show it to my friend and he ejoyed it as well! slot thailand

  28. Inilah yang dilakukan situs web Perjudian dan taruhan besar. Mereka memuat situs mereka merencanakan artikel dan konten tentang perjudian kompulsif dan bagaimana Anda dapat berhenti visit Pakar69 dari Perjudian online. Mereka memberikan tips dan saran tentang berhenti berjudi, selama situs yang sama persis – dan bahkan halaman yang sama, mereka mempromosikan situs perjudian mereka. Jangan tertipu dengan berpikir bahwa jenis ini bertanggung jawab dan sebenarnya merupakan isyarat mulia untuk membantu orang-orang dengan masalah Perjudian yang serius. Ini jauh dari itu.

  31. General visits recorded here are the most easy system to esteem your imperativeness, which is the motivation behind why I am taking off to the site conventional, examining for new, interesting information. Many, favor your heart! alexistogel slot

  32. Ini benar-benar masalah kesehatan mental dan ada banyak orang yang menderita item tersebut. Tidak ada lagi atau kurang berisiko online. Semuanya tergantung Pakar69 pada orang tersebut serta kekhasan mentalnya. Anda dapat terlibat dalam taruhan olahraga, lotere, slot, roulette, dan sejumlah permainan lainnya. Selain itu, sementara fantastis lebih suka berjudi, yang lain seperti perjudian online dan volume pemain memiliki kecanduan judi online terus meningkat. Alasan utamanya adalah peningkatan penggunaan internet secara umum.

  33. Thanks for this post. I definitely agree with what you are saying. I have been talking about this subject a lot lately with my brother so hopefully this will get him to see my point of view. Fingers crossed! Philips Food Processor 7320

  34. I am really enjoying reading your well written articles. It looks like you spend a lot of effort and time on your blog. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work. hbomax/tvsignin

  35. Just saying thanks will not just be sufficient, for the fantasti c lucidity in your writing. I will instantly grab your rss feed to stay informed of any updates. hbomax/tvsignin

  49. I can’t imagine focusing long enough to research; much less write this kind of article. You’ve outdone yourself with this material. This is great content 온카판

Leave a Reply

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