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.

46,458 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. Jika pasar. untuk memahami untuk memenangkan mesin slot Login Pakar69, maka baca fakta ini. Anda akan menemukan informasi mesin slot generator nomor acak yang membantu untuk dapat lebih sukses di tempat.

  2. Nice information, valuable and excellent content. lots of great information and inspiration.
    Visit Site: Real Estate Company in India – Commercial & Residential property for sale, Buy & Rent. Best Villas in hyderabad, houses for sale near me A99 Real Estate. Link: A99 real estate

  3. Apa yang terjadi adalah Anda berjudi dengan uang penting untuk tidak kalah dan menang pada hari Jumat. Ini membuat Anda semakin memuaskan. Tetapi ketika Anda kehilangan semuanya, Jumat berikutnya memiliki kehancuran dan rasa sakit. Seseorang yang tidak berjudi memiliki lebih sedikit kesenangan daripada pada hari Jumat # 1. Tetapi mereka memiliki lebih banyak kesenangan daripada Anda pada hari Jumat # 2 karena Anda membeli di atas. Mereka juga tidak mendapatkan kehancuran dan rasa sakit seseorang pada hari Jumat # 2 cenderung rusak. Silakan kunjungi artikel saya Pleasure + Addiction = Pain untuk mempelajari lebih lanjut tentang bagaimana kecanduan tidak pernah membawa visit Daftar Pakar69 kita lebih banyak kesenangan selama periode bulan, tahun, umumnya bahkan tidak selama dua minggu.

  4. Buy Vultr Account
    Vultr is a popular hosting service for some guests. There are a many merchandisers where you can Buy VultrAccount.However, it may be a perfect choice, If you ’re looking for the fastest and most effective devoted garçon for your website.

    Buy Verified vultr accountsYou can snappily understand points of commerce and the general control board is kindly more charming for guests, especially newcomers than the druthers accessible moment. still, you bear an account to pierce this position of service. That’s why you may have to buy Vultr performances.

    It offered a free FICO standing for the new individual record to get an occasion to set up a new VPS garçon on the Cloud Computing stage. therefore, it’s seductive to Buy Vultr accounts. swells is an exquisite volition if you need to buy a secure and secure spot to buy Vultr Accounts.

    Then at( website name), we ’ll take all the hassle out of Purchasing Vultr Accounts and offer you a fully suited traffickeraccount. However, also go ahead and continue with that, but it’s simply a waste of time, If you want to examine our different account offers to find the ideal fit for you.

    In short, as you have formerly gone then, why go any farther with your hunt? After poring this composition, you can no longer calculate on a different possibility. Purchasing our Accounts is your stylish bet. Be sure to use Vultr Accounts moment.
    Website: https://pnmcloud.com/product/buy-vultr-account/

  5. Jika orang-orang di sekitar cenderung menjadi penjudi, dan ada kemungkinan besar bahwa Daftar Pakar69 slot Pg Anda akan naik seperti mereka. Lingkungan di dalam bisa menjadi pertimbangan yang sangat penting dalam berkontribusi bersama dengan obsesi perjudian.

  6. Seorang penjudi kompulsif Daftar Pakar69 akan mengeluh kekurangan uang atau beberapa uang, tagihan yang tidak dibayar, meminjam uang secara ekstrem dari banyak orang atau bahkan dari rencana pensiun Anda, atau dibebani dengan tunggakan. Ada juga orang lain yang overdraw dari undangan kredit mereka.

  7. AI Training London– Artificial Intelligence (AI) is now considered one of the most dominant technologies in both IT and other industries. The evolution of AI came out as a result of the rapid innovation in IT and computing technology. IT professionals are now required to know and learn more about the implications of AI to optimize the business and foster the business process.

  8. Acquire NM: Your trusted family-oriented company in Albuquerque, NM. we buy houses for cash and properties fast, providing fair closing with a hassle-free process. Transparent, honest, and knowledgeable about the local real estate market. Sell your house fast with us!

  9. Maximize teamwork and productivity with MiPlaniT, the ultimate team collaboration tool and Project management tool. Seamlessly coordinate tasks, share schedules, and track progress together. With MiPlaniT, your team will stay organized, focused, and efficient. Experience the power of synchronized appointments, digital diary, and smart analytics. Supercharge your productivity and conquer your goals as a team with MiPlaniT!

  10. Buy Kamatera Accounts
    Perfect for startups as well as app and web designers, eCommerce businesses IT MSPs, systems integrators, consultants and many more. Our portal enables you to effortlessly manage your entire server all in one location. From Our doxiedigital.com.

    Kamatera is a truly unique platform that offers incredible benefits which ensure that you get top-quality performance. The most notable features are:

    High-Performance Servers
    Range of Products
    Flexible Cloud Services
    Support Always Available
    Pioneers of IaaS
    What are the reasons Kamatera Accounts are worth buying?
    Utilize the latest processors to get up to 300 percentage more power per CPU than before. This is thanks to our top server.
    Our servers can connect with the Internet backbone, which is capable of 40 Gbit/s speed – which is infinite! The speed is unbeatable and ensures that your data gets transferred fast safely, with no security issues, without delays.
    Use our databases and applications without interruptions or delays to ensure that your operations are running at a high level every moment.
    Start with a simple setup and increase your capabilities with a basic metal appliance at the push of a single key, with our simple cloud-based management console.
    In order to ensure the highest efficiency and dependability, every server has been equipped with the highest-quality resources. We will not oversell or sharing CPU, RAM and other components of the system.
    Start your servers within a matter of minutes using our simple cloud management console. No previous technical expertise is required! Create and replicate servers with the touch of one button to create your servers in a matter of seconds.
    Cloud Private Network
    If you require an employee that’s just for your personal use the LAN organizer might be a good option. It allows you to effortlessly connect the remote server to the local network. This will make it simpler to run programs such as Mattermost (a alternative to Slack) and other similar programs for teams using a remote system, with minimal maintenance.
    Website: https://doxiedigital.com/product/buy-kamatera-accounts/

  13. The Idaho Powerball Lottery is a widely-played multi-state lottery game offered by the Idaho Lottery in collaboration with other participating states. It provides players with the opportunity to win significant cash prizes.

    In the Powerball game, players select five numbers from a pool of 1 to 69, as well as a Powerball number from a separate pool of 1 to 26. To win the jackpot, players must match all five main numbers and the Powerball number. There are also smaller prizes for matching fewer numbers.

    Drawings for Powerball are held twice a week, on Wednesdays and Saturdays. Players can purchase tickets until shortly before each drawing. The jackpot prize starts at $20 million and increases with each rollover until it is won.

    The Idaho Powerball lottery offers players the chance to win substantial prizes through its multi-state jackpot game. It adds excitement to the Idaho Lottery lineup and provides another opportunity for players to win life-changing cash prizes twice a week.

  15. Discover LemonadeStand: Where kids excel! Experience seasonal jobs nurturing skills & responsibility. Empower kids with early employment chances now. Jobs For Kids To Make Money, Kids Earning Platform, Earning Platform For Kids, Jobs To Earn Money, Jobs For Students.

  16. Immerse yourself in the premier Hunt Community across top platforms for hunting. Participate in exhilarating wildlife hunting competitions and events, fostering connections with fellow enthusiasts. Get ready for the ultimate adventure!

  34. 좋은 사이트가 있습니다. 정말 쉽고 탐색하기 좋은 웹 사이트가 훌륭하고 멋져 보이고 따라 가기 매우 쉽다고 생각합니다. 토토사이트

  37. “Appreciating the dedication you put into your blog and detailed information you provide.
    It’s awesome to come across a blog every once in a
    while that isn’t the same old rehashed material. Fantastic read!” 링크세상

  38. “I really appreciate this post. I’ve been looking everywhere for this! Thank goodness I found it on Bing. You have made my day! Thank you again!

    ” 링크세상

  39. For a long time me & my friend were searching for informative blogs, but now I am on the right place guys, you have made a room in my heart! 꽁머니

  42. CooperBuild is NYC’s premier general contractor and luxury builder, providing high-end construction solutions that include general contracting, design and build, residential and commercial remodeling, and interior build-outs. We aim to create a stress-free experience for our clients by managing the construction of the project from start to finish.

  46. In the dynamic world of mobile app development.Flutter is Google’s open-source UI software development toolkit, has emerged as a game-changer, enabling developers to create stunning, high-performance applications for iOS, Android, and beyond. If you’re aspiring to become a proficient mobile app developer, Brolly Academy in Hyderabad has just the course for you.

    Flutter Training in Hyderabad

Leave a Reply

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