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Analysing uk cinema market segmentation

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UK has a big market potential for film sales, the gross box office was worth 944 million in 2009 (UK Film Council (a), 2010). To make sure Transformers series movies could enter UK cinema market smoothly, Paramount Pictures Inc. has to segmenting the consumer market. In this report, the UK cinema market segmentation will be analysed through demographic, psychographic, and behavioural. The market positioning of Transformers series movie is affected by these segmentation criteria, which will be stated as well.

2. Segmentation of UK cinema market

2. 1 Segmenting UK cinema market

For Paramount Pictures, customers of Transformers series movies in UK could be divided in two parts cinemas as retailers, and public customers. Cinema is the most convenient platform to promote new film to public customers, and it is the most important path to gain profit for film manufacturers (Appendix 1) (Manley, 2009). Under this situation, Paramount has to sell the Transformers series movies to local cinemas first. On the other hand, cinemas would like to select and promote the films which have market potential (Appendix 2) because the film will be consumed by public customer. Therefore, the favour of public consumers is even more important. UK cinema consumer market could be segmented through demographic, psychographic, and behavioural.

Demographic segmentation contains three parts in this market, age and life-cycle stage, gender, and income (Appendix 1). Consumers demands are changing with age increasing (Kotler & Armstrong, 2006). For instances, 80% of UK cinema-goers locate the age from 15 to 54 years old (Mintel(a), 2010). Comparing with young people, consumers over 45 years old are less interest


in big Hollywood blockbuster, as well as watching film in cinema (Mintel (b), 2009). Gender has influence on behaviour of watching film in cinema because of nature of human being. Females prefer to go cinema, 5% higher than 48% of males (Mintel(b), 2009). Income or socio-economic group is another element which affects consuming attitudes to cinema (Appendix 1). People belong to socio-economic group C1 or above have more positive attitude to enjoy films in cinemas (Mintel (a), 2010).

Lifestyle belongs to psychographic segmentation which relates to consumption of cinema and various films, including two factors. First is people may prefer watching movies in cinemas to TV. For example, nearly 10% of UK population prefer to go to cinema as a leisure activity (Appendix 3). In addition, as mentioned above, cinema-goers would like to go to cinema. Another determinant is the personal reasons of customers, such as hobby, memory, and education. For instances, the fans of Harry Potter books could become Harry Potter series movies audiences. At the same time, English hobbyists might like to watch Harry Potter because of language.

Behavioural segmentation in cinema market could be accessed by perceptions and beliefs, such as favourable or unfavourable. In cinema market, people may have different feelings with different film genres. Take an instance, film genre in UK is distinguished in 17 categories (Appendix 1), 32% of movie customers who between 11 and 19 year-old like watching action movies; old generation is less interest in American blockbusters which was stated before. Furthermore, result from the features of video products on big screens, quality of visual and auditory sense is essential for audiences. With the development of camera technology, computer technology, and special effects, consumers have higher requirements on movie products. As a result, producing 3D and IMAX movies become a new trend. For instance, Avatar is successful on 3D technology (Mintel (a), 2010).

In order to identify the market segmentation better, combining different segmentation criteria together to analyse market segmentation is necessary (Kotler & Armstrong, 2006). The needs of cinema market are flexible,


therefore, segmenting may base on combination of different criteria, such as customer perception and age.

2. 2 Criteria for successful segmentation

According to David Jobber and John Fahy (2009), a successful segmentation can be accessed by five criteria, effective, measurable, accessible, actionable, and profitable. Effective in market segmentation means the segmentation should be clear and unique. Combining several segmenting variables which demonstrated before could ensure UK cinema market segmentation can be divided distinct. Measurable and accessible are feasible on analysing cinema market because plenty of secondary data could be collected through public sources. Actionable depends on capacity of company on some level, however, movie manufacturers such as Paramount Pictures and distributor do not have this problem in UK cinema market. Profitability is the most important criterion because it is the purpose of selling. UK has big market potential which can be proved by 944 million gross box office in 2009 (UK Film Council (a), 2010). The segmentation of UK cinema market might be successful base on the criteria which were explained in this section.

3. Market positioning of Transformers series movies

Competitions among cinema market leaders are fierce (Appendix 1), and bargain power of consumers is high (Appendix 3). Therefore, right market positioning is important for movie manufacturers and their products. Transformers series movie are launched by Paramount Pictures since 2007, which are the adaptation of Transformers cartoon (Appendix 1) (IGN TV, 2009). The market positioning of Transformers should be indicated by segmentation of UK cinema market. The analysis which refers to this topic will be offered below.

Demographic segmentation provides a primary boundary of potential audiences of Transformers. As stated before, most cinema-goers are between 15 and 54 year-old, at the same time, consumers who over 45 year-old are


not very interest in Hollywood movies (Mintel (a), 2010; Mintel (b), 2009). Therefore, people who between 15 and 45 year-old might be the majority customers of Transformers. Socio-economic group classification could be another important segmentation criterion which affects the market positioning of Transformers. Lower income people may not desire to enjoy this movie in the cinema.

Lifestyle affects market positioning of Transformers through different psychographic makeup. People who prefer choose go to cinema as the first leisure activity could become the audience of Transformers. Meanwhile, Transformers audiences could include fans of Transformers series cartoons which were launched by Hasbro since 1984 (IGN TV, 2009), car and weapon manias may attend because various luxury cars and high performance weapons would be shown in the film.

Customer perceptions and beliefs are important for market positioning of Transformers. The UK film council (2007) defined Transformers as action movie, however, it is also can be sorted to Sci-Fi category because of fantasy elements (IMDb, nd). Indeed, Paramount invested $150 million in Transformers 1, for example, built 9. 7 metres tall robots (Tourtellotte, 2007). Therefore, not only action movie preference customers would like to attend, but also Sci-Fi fans. Another advantage of Transformers series is implementing of new technologies. Transformers 1 applied plenty of computer technology to make special effects, and IMAX was used on Transformers: Revenge of the Fallen. Account for using new technologies, audiences such as car and weapon manias have chance to view and enjoy a number of cars and military equipment. This may improve satisfaction of customers.

Market positioning of Transformers series movies is base on market segmentation of UK cinema industry. As an action and Sci-Fi film, Transformers mainly target to the customers who between 15 and 45 year-old prefer to enjoy action and Sci-Fi movies, especially like Hasbro Transformers cartoons and toys, plus on other potential customers who has specific hobby such as cars, military, and visual effects fans. The performance of box office


sales proved the segmentation and position are successful. The gross box office of Transformers was 23. 5 million in 2007 (Mintel (b), 2009), the sequel �DRevenge of the Fallen was 27. 1 million in 2009 (UK Film Council (a), 2010).

4. Conclusion

Overall, market segmentation of UK cinema industry and market positioning of Transformers series movies are stated in this report. Segmenting UK cinema market with demographic, lifestyle which belongs to psychographic, and customer perceptions and beliefs which is consisted in behavioural could classify the different demands of consumers and exploit potential customers.

Transformers series movies market positioning is affected by UK cinema market segmentation. Demographic segmentation gives a primary scope of potential customers. Inside this scope, customers could be segmented through lifestyle, and perceptions and beliefs. Therefore, the positioning of Transformers series movies is to provide a series of action and Sci-Fi film to people who between 15 and 45 year-old, have a favour on Hasbro Transformers series cartoons, or interest in visual effects of movie, cars and military manias. Recording profit of box office is the evidence that the successful of Transformers series movies.



Appendix 1

Industry overview and Transformers series movies

UK film industry is consisting of five parts, cinema, renting, sell-through, broadcast, and downloading (Manly, 2009). This report only offers the analysis of cinema market. Cinema is the traditional channel to distribute films, but it is the shortest way to promote new films and an important path to create profit (Manly, 2009). There are six main cinema companies in UK market which own around 3607 screens totally (Manley, 2009), and in 2009, admissions of UK cinema were 163. 4 million with 944 million revenue (Mintel (b), 2009). Competition in cinema market is intensive, there are 7 market leaders are from Hollywood–20th Century Fox, Columbia Pictures, Metro-Goldwyn-Mayer, Paramount, Universal Studios, The Walt Disney Company, and Warner Bros (Manly, 2009).

Generally speaking, young people prefer watching film in cinema, for example, 57% of people in 15-24 age group wants to enjoy a movie in cinema, but only 26% of people in 55-64 age group will do the same thing (Mintel (b), 2009). 82. 4% cinema-goers were under 54 and 29. 8% of customers are between 15 and 24 year old in 2009. Additionally, 52. 3% of cinema-goers are female, 80. 1% of them belong to C2 socio-economic group or above (Mintel (a), 2010).

There are 17 kinds of movie genre in UK film council s classification, including action, adventure, animation, biopic, comedy, crime, documentary, drama, family, fantasy, horror, musical, romance, sci-fi, thriller, war, and western (UK film council, 2007).

Transformers series movies are launched by Paramount Pictures since 2007. Paramount cooperates with Hasbro which started Transformers series cartoons and toys from 1984 to now (IGN TV, 2009). First Transformers movie was published on 27th June 2007, UK gross box office was 23. 5 million (Mintel (b), 2009), 354 million worldwide. The sequel �DRevenge of the


Fallen was published on 19th June 2009, and the UK revenue was 27. 1 million in 2009, 484. 6 million worldwide (UK Film Council (a), 2010). The third sequel will be released on 1st July 2011 (Paramount Pictures, nd).

Appendix 2

PEST analysis (macro-environment)

Political Factors

UK government does not affect a lot in film industry, but they prefer film contents have less political issues. However, a variety of legislation is passed for encouraging domestic companies (Manly, 2009).

Economic Factors

UK has big market potential because of the excellent economic performance. In 2009, the GDP of the country reached 1448 billion, and PDI was 1015 billion (Mintel (a), 2010).

Social Factors

In 2010, the population of UK is around 62 million, and people who between 10 and 54 year old are 37 million. Adult population who belongs to C2 socio-economic group or above is around 40 million (Mintel (a), 2010).

Technological Factors

New computer special effects technologies appeared in last decade. In addition, 3D and IMAX technologies support developing of film industry (Manly, 2009).

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