Angelo Irawan - 1140003185
Deon Oxivar - 1140003254
Jonathan Nicholas - 1140002655
Teodorus Ernest - 1140002693
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Rex Oliver

CASE STUDY 2:
BlitzMegaplex vs. 21Cineplex The main issue of this case study talks about how BlitzMegaplex is trying to figure out new marketing strategies in order to get a balanced competition with the long-time market leader in cinemas industry, 21Cineplex. First of all, let’s talk about what BlitzMegaplex has done so far to compete with 21Cineplex. As the new market challenger in the industry, BlitzMegaplex had to define its strategic objective and opponents. It is clear that their opponent is the long-time market leader 21Cineplex and their objective is to attack them. Of course it was not easy to break through the industry. Therefore, BlitzMegaplex has implemented several general attack strategies in order to do so, such as:

* Frontal attack
21Cineplex has the upper hand since its cinemas can be found on almost every shopping mall in Indonesia. BlitzMegaplex tries to compete with them by opening up their cinemas on some of the biggest and prestigious shopping malls on Jakarta and Bandung, such as Paris Van Java, Grand Indonesia, Central Park, Mall of Indonesia, Pacific Place, Teraskota, and Bekasi Cyber Park.
BlitzMegaplex plays current popular national & Hollywood movies, just like 21Cineplex does. In addition, people can find independent movies on BlitzMegaplex, while they wouldn’t find them on 21Cineplex.

* Flank attack
BlitzMegaplex offers more comfort and luxury by having several different classes of auditorium: Regular Class, Satin Class, Velvet Room, and Dining Room. This can be considered as a flanking attack because BlitzMegaplex creates gaps for 21Cineplex to fulfill, considering 21Cineplex didn’t have such various and extravagant auditoriums aimed like BlitzMegaplex does at that time.

* Bypass attack
BlitzMegaplex attempts to diversify into unrelated products, which is in this case, the business units like BlitzShoppe, BlitzgameSphere, Blitzbeat, Billyard, and karaoke, for which 21Cineplex did not have. Furthermore, they also leapfrogged into new technologies by introducing 3D RealD movies. BlitzMegaplex was the first cinema in Indonesia to play 3D movies, while 21Cineplex didn’t provide 3D technology at that time.

Besides those general attacks, BlitzMegaplex also offers specific attack strategy, such as implementing BlitzCard, a pre-paid card that can be used for booking tickets through the internet, choose your own seats, and enjoy all the entertainment on BlitzMegaplex. On the other hand, 21Cineplex has to maintain its status as a long-term market leader and to stay number one in the industry. 21Cineplex found ways to expand total market demand and protect its current share through defensive and offensive actions.

* Expanding total market demand
21Cineplex made numerous improvements and innovations in order to compete with BlitzMegaplex. Some of the most notable innovations made to expand its market demand were the development of Cinema XXI and The Premiere aimed for the upper segment. Cinema XXI can be considered an upgraded and improve version of the classic 21 since it features numerous new extravagant facilities like lounges, clubs, and cafes. The Premiere can be considered as 21Cineplex’s most luxurious class of auditorium that offers maximum level of comfort and can be compared with Velvet Room and Dining Room on BlitzMegaplex. This movement attracts new customers and brings new ways to enjoy 21Cineplex.

* Protecting market share
21Cineplex has been very aggressive in protecting its market share by doing continuous improvements and numerous counteroffensive defense strategies. The development of Cinema XXI and The Premiere that has been explained before can also be considered an example of 21Cineplex’s counteroffensive defense. 21Cineplex also tries to compete with BlitzMegaplex’s Blitzcard by introducing a mobile ticketing system called M-Tix. Another notable counteroffensive defense by 21Cineplex would be the decision to lower the tickets price, especially the “Nomat” program every Monday, in which the prices are lowered by 75%-50% than usual.

Both 21Cineplex and BlitzMegaplex have executed their attack and strategies. And now with everything that has been going on between these two cinemas, BlitzMegaplex is hoping to have a balanced competition between competitor and customer orientation. However, we find BlitzMegaplex’s goal of a “balanced” competition pretty ambiguous and vague. There are some questions to answer because the solutions may vary, such as: 1) How does BlitzMegaplex define a balanced competition exactly? 2) Is BlitzMegaplex trying to win the market leader status over 21Cineplex, or is it merely trying to increase its competitive strategies and still remain the challenger? We will try to discuss some solutions and possibilities for BlitzMegaplex to work either way. BlitzMegaplex has only seven cinemas, in which six of them are concentrated on big shopping malls in Jabodetabek area. Meanwhile there are literally hundreds of 21Cineplex cinemas and they can be found everywhere in many cities throughout the country. This is inevitably a big upper hand for 21Cineplex, because it obviously has much higher brand awareness than BlitzMegaplex, not to mention the fact that 21Cineplex has been around for more than 20 years. Based on this fact, we feel that it is going to be very hard for BlitzMegaplex to acclaim a nation-wide leader status over 21Cineplex. Otherwise it’s another story. Either way, our first recommendation for BlitzMegaplex is to do another frontal attack by increasing more numbers of cinemas, especially outside Jabodetabek or even on other island outside Java. However, the downside of this idea is that there aren’t that many big shopping malls – as big as, let’s say, Grand Indonesia or Mall of Indonesia – outside Java, and BlitzMegaplex has been well-known for its locations inside big malls. But if BlitzMegaplex is willing to, let’s say, build its own cinemas outside malls, this shouldn’t be a problem. The more number of cinemas, the more new customers, the higher its brand awareness. Our next recommendation for BlitzMegaplex in order to compete is to do another frontal attack by appealing to wider audience, especially middle-lower segment. BlitzMegaplex is well known as being an exclusive and upper class oriented cinema, while 21Cineplex has broader appeal to low and upper segment. The fact that BlitzMegaplex has positioned itself in the market as an upper-middle class cinema may be what makes it strong and different, but it can also be what kills its chance to appeal to wider audience. Some people love the fact that BlitzMegaplex cinemas have outstanding interior designs, are located on big shopping malls, and offer more luxury & comfort and extravagant facilities. However some people prefer going to 21Cineplex ironically for the same reason. Some people are afraid that going to BlitzMegaplex might be too “expensive” for them, in spite of the fact that the tickets price might not be that much different than 21Cineplex – Regular Class offers Rp25.000 to Rp30.000, which is comparable to Cinema XXI – but some people probably don’t even bother checking. The idea of BlitzMegaplex is an upper class oriented cinema turns some people off, especially the middle-low segment. So, why not try and tap into the middle-low segment? This might be contradictive to BlitzMegaplex brand image in the first place but we should admit that the middle-low audience is a huge number and is worthy of lots of revenues. When BlitzMegaplex introduced Velvet Class, 21Cineplex responded it by introducing The Premiere to gain more appeal to upper class customers. So perhaps it’s time for BlitzMegaplex to somehow do the same and come up with something like a new concept or program to broaden its appeal to lower segment. 21Cineplex has the classic 21, Cinema XXI, and The Premiere. Perhaps BlitzMegaplex can come up with a “downgraded” class of auditorium – a classic 21 counterpart – aimed for lower-middle audience. Another frontal attack strategy BlitzMegaplex can try is to charge lower price, although this might be a little hard to do because there are many things to consider. They don’t necessarily have to cut the entire tickets price because BlitzMegaplex Regular tickets, for example, are comparable to that of Cinema XXI. Perhaps if BlitzMegaplex comes up with a special program similar to “Nomat” on 21Cineplex or something, it might just be a marketing boost. We feel that it is likely going to be very hard for BlitzMegaplex to completely win over the market leader status, but other than that, BlitzMegaplex is actually doing just fine. The strategies they have done so far is very successful to make them a powerful market challenger for 21Cineplex – otherwise, 21Cineplex wouldn’t react as much! But if BlitzMegaplex feels the need to compete more, they can try to implement the frontal attack strategies that we have recommended above, such as increasing more numbers of cinemas, appealing to wider audience, and perhaps charging lower price.