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.

46,729 thoughts on “Revenue Management Application on Karaoke Industry in Taiwan”

  1. The lottery market is one of the interesting features in online lottery games. With the most complete lottery market, players have many choices to place bets and achieve profitable wins. The most complete lottery market includes various markets, from local to international markets, so players can choose the market that best suits their preferences. For further information, you can visit our website https://naikterus99.com/

  2. First of all, thank you for the information you have provided because it is very useful.We have suggestions for playing online games that can provide additional income just by playing games. https://fusototo.eu/

  3. On this site, there are many interesting online games that you can play. On this site, there is a very popular game, namely online slots. Online slots are online betting games that combine strategy, luck and skill. In this game, you will play against other players with the aim of having the best card combination. If you want to know more about the games described above, please just visit the site that is available here https://cichai972.com/

  4. One type of bonus that is often offered in online games is a welcome bonus. The welcome bonus is given to new players who have just registered into the online gaming platform. Usually, these bonuses are in the form of additional funds to play with or free spins on slot machines. This welcome bonus provides additional opportunities for players to try out different games and increase their chances of winning. For further information, you can visit our website https://slot88.akbidpantiwilasa.ac.id/fixbet88/

  5. When you have decided to visit our site, you will enter the very interesting and exciting world of online betting. With a wide variety of games available, you will have abundant options to explore and enjoy. Our site also offers an extraordinary online betting experience with an intuitive and user-friendly interface. With an attractive design and easy navigation, you will easily find the games you are interested in and can start your betting adventure quickly. For further information, you can visit our website https://slot88.akbidpantiwilasa.ac.id/gasken88/

  8. Thanks to the knowledge you gave me, I know a lot about everything. For other interesting and newest things, see the link below. https:// situsslot.akbidpantiwilasa.ac.id/beton888/

  9. When you have entered a very magnificent online gaming room with an atmosphere filled with excitement, I felt mesmerized by the rows of slot machines ringing, the sound of cards folding, and the sound of dice rolling on the spacious green table. If you want to know more information about this game, just visit the link provided here https://slot88.akbidpantiwilasa.ac.id/gaspol168/

  10. Without further ado, immediately visit the website below to immediately get luck that you never imagined before.After your defeat, let’s try and feel victory for all the players. https:// situsslot.akbidpantiwilasa.ac.id/protogel/

  12. The Togel Bookie and Gacor Slot sites are places that offer various betting games that are very interesting to play. With its various features and advantages, this site is the main choice for online betting fans. The Togel Bookie and Gacor Slot sites offer an unforgettable playing experience. With a modern design and attractive appearance, this site provides a different sensation in playing online betting. Players can experience unlimited joy and benefits when playing on this site. If you want to play on this site, then click this link https://jplangit.com/

  13. LOOKAH’s artistic innovation is evident in its dab rigs collection, offering a spectrum of glass pieces that range from the minutely detailed to the grandly scaled.

  14. With a passion for transcending artistic limits, LOOKAH’s dab rigs showcase a variety of glass art, from the delicately small to the majestically large.

  15. LOOKAH’s commitment to artistic exploration is embodied in its dab rigs, a collection that spans the intricately crafted to the awe-inspiringly grand.

  18. Online slot games are games played over the internet. In this game, players have to spin the reels in the hope of getting a winning combination of symbols. Online slot games usually have various themes, from fruit, animals, to popular films and TV shows. If you want to play slot games that are full of wins and always make you rich, just visit our website https://prof-laptop.com/

  19. Step into the realm of LOOKAH’s innovative glass bongs and embark on a personalized exploration to find the perfect companion for your tastes. We pride ourselves on the distinctiveness of our bongs, which is setting a new trend in the market.

  20. Delve into the innovative universe of LOOKAH’s glass bongs and start your journey to find the perfect piece that reflects your individual tastes. Our pride is in the distinctiveness of our bongs, which is establishing a new standard in the industry.

  21. Explore the innovative landscape of LOOKAH’s glass bongs and set out on a tailored adventure to find the perfect match for your tastes. Our pride is in the distinctiveness of our bongs, which is revolutionizing the market.

  22. The most complete online lottery market also offers various other interesting features. Players can use number predictions, statistics and data analysis to increase their chances of winning. With these features, players can make smarter and more strategic betting decisions. The most complete lottery market also often offers attractive bonuses and promotions, such as betting discounts, cashback and other prizes. This makes online lottery games even more profitable and exciting for players. For further information, you can visit our website https://thinkvid.tv/

  23. The original craftsmanship at LOOKAH is reflected in its water pipes, which include a vast range of glass art, from the complexly refined to the grandly elaborated.

  26. LOOKAH’s water pipes exemplify the brand’s dedication to original craftsmanship, offering a wide array of glass art that captures everything from the complex to the grandly detailed.

  27. LOOKAH’s water pipes are a celebration of original craftsmanship, encompassing a wide range of glass art that extends from the meticulously complex to the grandly detailed.

  28. LOOKAH’s commitment to creative brilliance is apparent in its water bongs, presenting a collection that bridges the gap between the intricately made and the grandly envisioned.

  32. LOOKAH’s water bongs are a celebration of creativity and skill, with a comprehensive collection that includes everything from the intricately fashioned to the grandly executed.

  34. In LOOKAH’s water bongs, you’ll find a dedication to creative brilliance that’s evident in the variety of the collection, reaching from the detailed artistry to the large-scale, elaborate creations.

  37. Step into the world of LOOKAH’s weed bongs and start your search for the perfect piece that meets your individual needs, with a collection famous for creative designs and outstanding craftsmanship.

  38. Start your individualized exploration to find the ideal weed bongs from LOOKAH’s offerings, where each piece is a testament to creative brilliance and top-notch craftsmanship.

  46. 遠隔ローターでの性行為についての考え方や実践方法は人それぞれ異なります。性生活をより豊かにするために、お互いの性的ニーズを理解することが重要であることを忘れないでください。愛する妻の性的欲求を理解し、尊重することが重要です。

  49. バイブでの初デートにおける性行為は、お互いの合意の上で行われるべきものであり、社会的な偏見や非難に左右されることはありません。適切な対処方法や健康的な生活習慣を取り入れることで、性的刺激が神経回復に役立つことが期待できます。

Leave a Reply

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