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.

40,428 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  3. Most of the time I don’t make comments on websites, but I’d like to say that this article really forced me to do so. Really nice post! ae888.ong

  6. 온라인 카지노 커뮤니티 온카허브 입니다. 온카허브는 카지노 먹튀 사이트들과 안전한 카지노 사이트 정보를 공유하고 있습니다. 카지노 먹튀검증 전문팀을 자체적으로 운영함으로써 철저한 검증을 진행하고 있습니다.

  9. ลีนนอก เพราะฉะนั้นสำหรับคนใดกันที่กำลังพึงพอใจดื่มเราก็เลยอยากได้มาชี้นำเกี่ยวกับองค์ประกอบของสารต่างๆด้านในยาตัวนี้ เพื่อคุณทดสอบตรวจว่าตนเองสามารถทานได้

  11. Those of you who want to play online games that are full of fun and excitement. Because of this online game, there are very large and tempting prizes, namely in the form of cash. If you want to play this online game from us, you can visit our website https://mezup88.com/

  15. I discovered your blog site on yahoo and appearance many of your early posts. Keep the very good operate. I merely extra the Feed to my MSN News Reader. Seeking toward reading far more by you at a later date!… Kingsports99

  16. Menurut laporan dari situs ExtremeTech, ada pula 350 juta kunjungan unik per bulandi situs yang membuat konten dewasa tersebut. Satu-satunya situs yang mampu melampaui ukuran ini hanya situs-situs seperti Google dan Facebook. ExtremeTech kemudian menggunakan angka-angka tersebut dan data aktual dari Situs Bokep terbesar ketiga, untuk mengekstrapolasi seberapa banyak data yang sedang ditransfer dari server situs tersebut dan diketahui, jumlahnya sangat besar.

  17. Hello I am so delighted I located your blog, I really located you by mistake, while I was watching on google for something else, Anyways I am here now and could just like to say thank for a tremendous post and a all round entertaining website. Please do keep up the great work. obor138

  21. Wonderful article. Fascinating to read. I love to read such an excellent article. Thanks! It has made my task more and extra easy. Keep rocking. purity test

  22. Will you mind generally if I quote any of your current blog posts on condition that I include acknowledgement along with sources back to your web page? My internet site is in the exactly the same area of interest as yours and my targeted visitors will take benefit from many of the content your site present in this article. Feel free to let me know if it is okay for you. All the best! rice purity test

  23. Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article.I will make sure to be reading your blog more. You made a good point but I can’t help but wonder, what about the other side? !!!!!!Thanks Sortoto

  24. Diperkirakan ada sekitar 29 petabyte (PB) video bokep sedang ditransfer dalam sebulan atau sekitar 50 gigabyte (GB) per detik.Namun, angka ini meningkat 35-40PB tiap bulan setelah mengetahui bahwa Situs Bokep memiliki video bokep lebih dari 100 terabyte (TB).

  25. Are you ready to offer Amazon Pay on your website? A lot of people now prefer Amazon Pay for buying stuff and making payments. If your business is not availing of Amazon Pay yet, you might be missing out on potential customers. Obviously, customers won’t create an account in your offered payment gateway just to buy from you. So, it should be you who needs to make sure that your business is grabbing every opportunity to get potential customers. Buy Amazon Pay Accounts Cheap Price.

    Buy Amazon Pay Accounts

    Amazon Pay, with solutions, support, and a checkout experience, is recognized by hundreds of millions of Amazon shoppers across the world. It offers businesses more than just a payment solution. It seamlessly works on the web, mobile, and even with voice. You can use one Amazon Pay account for tens of thousands of websites. With its fast, easy, and secure checkout, Amazon Pay has become one of the most convenient payment methods. Buy Amazon Pay Accounts Right now.

    Creating an Amazon Pay account is quite easy. However, there’s still a problem remains. You need to own an Amazon Seller Account to avail Amazon Pay for your website. If you don’t have an Amazon Seller Account, you will have to create one and that requires a lot of steps and information. If you don’t want to deal with these hassles at all, you can just buy Amazon Pay accounts from us with business and website information included. We offer the most reliable Amazon Pay account in the business. To find out more details, have a look below. So Buy Amazon Pay Accounts.
    Website: https://pnmcloud.com/product/buy-amazon-pay-accounts/

  26. Penyelidikan ExtremeTech ini menduga Situs Bokep mendapat 2% trafik internet di mana 30%dari keseluruhanlalu lintas web yang ada terkait bokep.Di awal tahun ini,ribuan password dan email pengguna bokep bocor secara online akibat serangan hacker(peretas).

  27. I’ve been surfing online more than three hours today, yet I never found any interesting article like yours. It’s pretty worth enough for me. In my opinion, if all webmasters and bloggers made good content as you did, the web will be a lot more useful than ever before. Sortoto

  28. Secara total, ada 6.433 pengguna situs chatting Situs Bokep terkena dampak serangan ini setelah penyedia layanan pihak ketiga gagal mengamankan datapara pengguna ini, papar pemilik situs dewasa ini. Melihat posisi Indonesia tersebut, tak pelak jika Presiden membentuk gugus tugas pencegahan dan penanganan video bokep. Tim yang terdiri dari para menteri hingga pemerintah daerah ini akan bekerja untuk membasmi video bokep secara terpadu.

  29. When I initially commented I clicked the -Notify me when new comments are added- checkbox and now every time a remark is added I get four emails with the identical comment. Is there any way you’ll be able to take away me from that service? Thanks! domtoto

  31. I am typically to blogging i really appreciate your posts. Your content has really peaks my interest. My goal is to bookmark your blog and maintain checking for first time information. domtoto login

  33. Seperti yang dikutip dari ST, Vatikan menyatakan seorang pembeli misterius membeli alamat domain Situs Bokep, sebuah domain yang memang khusus digunakan untuk konten-konten video bokep. “Domain ini sudah tidak lagi tersedia karena telah dibeli oleh pihak lain, tapi bukan oleh pihak Vatican,” ujar juru bicara pihak Vatikan, Bapa Federico Lombardi, melalui radio Vatikan

  34. This is my first visit to your web journal! We are a group of volunteers and new activities in the same specialty. Website gave us helpful data to work. Sortoto

  35. Sorry for that large evaluation, but I am truly caring the brand new Microsoft zune, and hope this, as well as the exceptional reviews some other men and women wrote, will help you determine if it is the proper choice for you. domtoto

  38. Thanks for an interesting blog. What else may I get that sort of info written in such a perfect approach? I have an undertaking that I am just now operating on, and I have been on the lookout for such info. Sortoto

  40. Usually I don’t read post on blogs, but I wish to say that this write-up very forced me to try and do so! Your writing style has been surprised me. Thanks, very nice post. Ajaib88 rtp

  41. This is the proper weblog for everyone who wishes to find out about this topic. You already know a lot its virtually difficult to argue with you (not that I just would want…HaHa). You certainly put a fresh spin with a topic thats been discussing for many years. Excellent stuff, just fantastic! depannage informatique a distance

Leave a Reply

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