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CINEPLEX ENTERTAINMENT:

THE LOYALTY PROGRAMGROUP 7

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1. P ROJECTING YOUR OWN MOVIE GOING EXPERIENCE , DISCUSS CUSTOMER PERCEPTIONS AND ASSESS LIKELY RESPONSE LEVELS TO THE REWARDS FROM DIFFERENT SEGMENTS .

InternalDevelopment

Flight MilesPartnership

ScotiabankProposal

Teenagers High Low Low

Young

Adults

High Low Moderate

YoungWorking

Moderate High High

YoungFamilies

Low Moderate High

OlderFamilies

Low Moderate High

Retirees Low Moderate High

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2. WOULD YOU RECOMMEND DEVELOPING THE REWARD PROGRAM ALONE , OR PARTNER WITH FLIGHTMILES OR S COTIA BANK? W HY?ATTRIBUTE INTERNAL

DEVELOPMENT

PARTNERSHIP WITH

FLIGHT MILES

PARTNERSHIP WITH SCOTIA

BANKCosts to company $5.5 mn & diminishing

thereafter$15 mn + $0.9/transaction +paying each time they accessdata

Approx. $6.51 mn ($3 mn + $1.7 mn + $ 1.8 mn)

Penetration Rate 16.56% (5.3 mn uniquevisitors)

21.87% (7mn customerdatabase)

21.25% (6.8 mn customers)

Data Ownership Complete NA NA

Pros Control over data &program ownership

There will not be anyBrand cannibalization

Immediate entrance to dataof 7 mn people and other flightmiles partners$250000 contribution toCineplex designed marketingcampaign Easy reach to large Canadianpopulation No additional card to becarried

Promotion in theatres andbank branches One of the big 5 banks inCanada Shared Financial Risk (50:50) Prior Experience with datamanagement Each debit/credit card holderwill be issued a CineplexLoyalty card

Cons Financial risk ofunredeemed points

New DB and team tomonitor the same

Long term project

3 years commitment No easy exit option Would lose access to all dataon exiting Extra cost incurred to access

DB & to issue points

Naming rights on 3 majortheatres Bank machines in all theatres Constrained decision makingpower

Multiple card system

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GO WITH S COTIA BANK PARTNERSHIP OPTION

Advantages:Cheapest and easiest way for Cineplex to establish a largecustomer databaseFinancial and data management risks would be sharedNo barriers for contractual exitsWin Win Situation

Suggestions:Shared decision making powersGather customer preferences via advanced technology atPoSExecute a single card/cardless strategy

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4. H OW WOULD YOU APPLY THE LEARNINGS FROM THIS CASE TO A BUSINES LIKE PVR IN INDIA?

PVR located in metrosLow inclination for flight travelHigh usage of credit/debit cards in metrocitiesSelect the bank with maximum or secondmaximum transactions during ticket

purchaseInternal Development is cost-intensive andnot their core competence

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THANK YOU !!