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.

40,323 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. I just couldn’t depart your site prior to suggesting that I extremely enjoyed the standard information an individual provide for your visitors? Is gonna be back frequently in order to inspect new posts Slot Online Untung88

  4. http://journal.stiatabalong.ac.id/warna/ Meskipun dia lahir di AS, kami tidak dapat mengabaikannya dari daftar kami karena bayi bertubuh montok ini adalah keturunan Sisilia dan Rusia. Dia wanita yang luar biasa. Aset terbesarnya adalah penampilannya yang dewasa dan seksi serta payudaranya yang luar biasa. Jaclyn Taylor memasuki industri ini pada usia 26 tahun dan sejak itu dia telah bekerja dengan banyak nama terkenal di antaranya Anda juga dapat menemukan bintang bokep Rusia terbaik saat ini. Tak heran jika ia berhasil memenangkan beberapa penghargaan atas penampilannya yang menawan dan memiliki basis penggemar yang besar. Anda juga bisa menemukannya di sampul majalah dewasa paling populer. Relung lesbian dan wajah adalah keahliannya. Dia biseksual dan ketertarikannya pada pria dan wanita adalah kepercayaan diri dan kaki yang besar. Baru-baru ini, dia lebih fokus pada pekerjaannya yang lain seperti modeling dan bisnis.

  5. گن قزن دار

    خرید و قیمت گن قزن دار لاغری زنانه و مردانه در مدل های متنوع با ارسال فوری به سراسر کشور

  7. Thanks for your writing. I would like to say a health insurance broker also works for the benefit of the actual coordinators of any group insurance policies. The health insurance broker is given a directory of benefits sought by an individual or a group coordinator. What any broker can is try to find individuals and also coordinators which best complement those requirements. Then he gifts his advice and if the two of you agree, the particular broker formulates a legal contract between the two parties. biotrust ageless glow

  10. ویتابلا نمایندگی محصولات ویتابلا خرید با قیمت رقابتی و تخفیفی در فروشگاه بیز استار

  12. Positive site, where did u come up with the information on this posting? I’m pleased I discovered it though, ill be checking back soon to find out what additional posts you include. bandar alexistogel

  16. This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information. Keep it up. Keep blogging. Looking to reading your next post. slot gacor maxwin

  24. I wanted to thank you for this excellent read!! I definitely loved every little bit of it. I have you bookmarked your site to check out the new stuff you post. misliwin

  27. Online gaming has become a phenomenon that has rocked the world of online gaming. With a variety of attractive themes and exhilarating features, online games offer an engaging and exciting gaming experience. For further information, you can visit our website https://kambinghitam99.com

  28. Online games are interesting and exciting games. With a variety of creative themes and exciting features, every spin of the wheel provides unforgettable thrills and excitement. In online games, we can feel the tension and excitement while waiting for the right number combination. Let’s continue exploring the online world, chasing jackpots and achieving impressive wins. For further information, you can visit our website. For further information, you can visit our website https://troystucker.com

  29. Let’s tell you about online slot games, those of you who play them will be able to enjoy a gaming experience similar to physical slot machines in casinos, but with the comfort of playing from home. You can choose from a wide variety of slot games with different themes, exciting bonus features and the chance to win big prizes. For further information, you can visit our website https://kawarthanet.com

  30. Feel the sensation of adrenaline and unlimited excitement in every round of online games. With stunning graphics, heart-pounding sounds and exciting bonus features, every spin is an unforgettable experience. Enjoy the thrill as the reels spin and hope the right symbols appear for a win. In online games, you can feel the sensation of online games that inspire adrenaline and unexpected excitement. For further information, you can visit our website https://sumbubur.com

  31. Online games have changed the way we play and enjoy the games. With a variety of interesting themes and stunning graphics, every spin of the wheel takes us into a world full of joy and hope. Online games also provide the opportunity to achieve big wins and change our lives. Let’s continue to explore the online world, chase the jackpot, and experience the unforgettable sensation of winning. For further information, you can visit our website https://nexdaypc.com

  32. 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. 먹튀검증

  34. This article is a well-researched and compelling read. The depth of information, clarity of expression, and the thoughtful exploration of the subject make it both informative and engaging. If your are looking for Healthcare app development visit Apptunix now.

  42. That’s the reason center on it’s essential to precise ground moves well before writing. Might be attainable so that you can extra advisable text that way. jiliko

  43. به زبان ساده تر: کسب و کار، کیفیت و مشخصات میلگرد شاهرود در آهن 28 عبارت است از فرایندی که افراد با قدرت خلاقیت و کارآفرینی خود، فرصت‌های تجاری را از طریق راه اندازی شرکت‌های مختلف خلق می‌کنند که علاوه بر ایجاد اشتغال، می توانند خدمات و محصولات متنوعی را به جامعه هدف خود (مشتریان) ارائه دهند.
    کسب و کار (به انگلیسی: Business )، لفظ عامیانه: کار و کاسبی؛ سازمان یا بنگاه اقتصادی است که برای فراهم کردن کالا، خدمات یا هر دو برای مشتری در قبال دریافت پول و دستمزد و با هدف کسب درآمد ایجاد شده است.

Leave a Reply

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