Executive Summary
The mission of Londonderry Theaters is to provide an exceptional entertainment experience to our customers. By offering current and popular titles, 3D movies, exceptional facilities, and outstanding customer service, our customers will be thrilled with their experience. Londonderry Theaters will establish itself as the area’s premier movie theater complex.
Londonderry Theaters will be located in Londonderry, New Hampshire. Londonderry Theaters serves clients in the Londonderry and Derry area of New Hampshire. Customers live in these towns and the surrounding areas. Our target market is anyone who loves movies, males and females ages 2-100. These movie goers are low- middle to upper class and range in ethnicity.
Londonderry Theater’s main competitors are Apple Tree Cinema 12 in Londonderry and Derry Flagship Cinema 12 in Derry. Both offer stadium seating and 3D movies, and pricing is the same as our proposed pricing. We believe that the novelty of a new movie theater in town, combined with our excellent customer service and brand new state-of-the-art facilities, will make us stand out against the competition.
Our goals for the first three years include growing productivity to at least 50%, to attract and grow a loyal customer base, and to become the “go-to” movie theater complex in the area because of the memorable and meaningful experiences we create. I plan to achieve these goals through use of social media marketing, print advertising, and word of mouth.
The theater will start with $25,000 to cover start-up costs including a downpayment on the space, first month mortgage payment, insurance, renovations, and supplies. I anticipate that our opening week will be extremely busy, and will bring in enough revenue to cover additional costs. We will use that momentum to build our customer base and to feed into the money necessary to maintain the business.
Section I: The Business
Londonderry Theaters will be a 12 theatre movie complex featuring stadium seating, 3-D movies, and a video game arcade. The complex would also have a snack bar serving popcorn, soft drinks, candy, and other snack items. The complex would be located in a high traffic area (space is yet to be determined) and each theater will accommodate 300 people.
B. Business Mission
Londonderry Theaters will serve the general population but will seek to serve true movie lovers. By providing state of the art facilities, including stadium seating and 3-D movies, and surround sound, the movie complex will become a favorite of movie goers. We will offer only the newest and most popular movies. Londonderry Theaters will establish itself as the area’s premier movie complex and a popular choice for area residents looking for something to do in their free time.
C. Products and Services
D. Operations
The theater will be open seven days a week, including all major holidays. Hours of operation will be 10:00am – 12:00am. The space will include a lobby with ticket booth, concession stand, 12 theaters, a video game arcade, and 4 handicap accessible restrooms (2 womens and 2 mens). The space will be purchased and renovated. Liability insurance will be secured through State Farm Insurance. All equipment in the theatre will be purchased through XYZ Movie Theater Supply Company. Credit terms have been established with this supplier as well at Orville Redenbacher popcorn, Coca Cola refreshments, Yummy Candy Company, and Video Games plus.
E. Staffing and Subcontracting
The owner will take on full managerial duties with two full time assistant managers working under him. Staff will be a mix of full and part time employees, with full time workers working 5 eight hour shifts for a total of 40 hours per week, and part timers working a mix of 4 and 8 hour shifts for a total of 10-30 hours per week. No health insurance will be offered at this time; one week of vacation time will be accrued following each 6 month term of employment. No members of the owner’s household will work in the theater. Staff will be responsible for ticket sales, concession sales, movie theatre and arcade monitoring, cleaning of theatres, lobby, and restrooms, and other tasks as assigned by management. No work will be subcontracted out to other businesses.
F. Customers and Pricing
It is anticipated that the complex will have an average of 3000 customers each week for the first year of business. We plan to secure a location in a well-known, high traffic area so the complex will be visible to the general public. The movie business tends to be steady throughout the year. Business tends to be busier around the holidays (late November through the end of December) and in the summer months. The slowest month of the year is January, immediately following the holidays. Customers are most likely to visit a movie theater to see large blockbuster movies or children’s films. Pricing is set to be on par with the two competitors in the area.
G. Profit and Loss Projections
The following table shows estimated profit and loss for the first 12 months of business, based on 12 movie theaters with 4 showings each. It is expected that the average ticket price will be $8.50, taking into account pricing for matinees, children, senior citizens, and 3D films, the average concession spending per customer will be $7, and average arcade spending per customer will be $.50, making the total paid per customer $16. Please note that the 100% productivity rate shows numbers for selling out every movie every day for the entire year, which is highly unlikely. Projections for the first year will fall somewhere in the 50-25% range.
Section 2: The Market
A. Market Segments
Londonderry Theaters serves clients in the Londonderry and Derry area of New Hampshire. Customers live in these towns and the surrounding areas. Our target market is anyone who loves movies, males and females ages 2-100. These movie goers are low- middle to upper class and range in ethnicity.
B. Competition & Competitive Advantage
Londonderry Theater’s main competitors are Apple Tree Cinema 12 in Londonderry and Derry Flagship Cinema 12 in Derry. Out location will be in Londonderry. Apple Tree Cinema 12 is located in the Apple Tree Mall and is owned by O’Neil Cinemas. Their theater is state-of-the-art, with stadium seating, 3D movie offerings, and D-Box movies. Their prices are the same as our proposed pricing, with D-Box movies being $8 more than their regular movie offerings (Apple Tree Cinema 12). Derry Flagship Cinema is located in Derry on Ashleigh Drive. They also offer stadium seating and 3D movies, and pricing is the same as our proposed pricing (“Derry Five Star Cinema”).
Though Londonderry Theatres will be a new theater in an established market, I believe that the novelty of a new theater in town will give us a competitive edge. After the initial visit, customers will want to return because of the cleanliness of the facilities and exceptional customer service they have received.
The proprietor holds an MBA and has over 10 years of experience in movie theater management. These experiences and credentials give Londonderry Theaters a distinct advantage in that it is being led by a leader with a diverse background, high level of education, and a strong knowledge base in the areas of management, leadership, and the movie theater business.
C. Promotional Strategies
Our marketing strategy will consist of social media marketing, word-of-mouth marketing, a monthly email newsletter, print advertising, and local press releases. Our social media marketing strategy will utilize Facebook and Twitter to promote our new theaters, upcoming releases, and special events being held at the complex. These pages will also help to drive traffic to our website and have an opt-in for our e-newsletter. We will also utilize our website to market the business, and add a movie blog to add value to our site.
We will also offer special services such as birthday parties, movie clubs, theater rental for corporate use, and video game clubs. We will also host special events to accompany popular movie releases. Utilization of social media will be particularly effective in these areas, as will word of mouth.
D. The Industry
The movie industry consists of 2,008 operating movie theaters nationally, employing 134,244 employees as of 2013 (“Movie Theaters in the US: Market Research Report”). In New Hampshire, the industry is responsible for 1,585 jobs and $76.2 million in wages (“State-by-State Film & Television Economic Contribution”). IBIS world reports that the movie industry brings in approximately 15 billion dollars in annual revenue, and predicts annual growth at 1.4%
The following chart from “Domestic Movie Theatrical Market Summary 1995 to 2013” shows the annual ticket sales for the last 19 years. Though ticket sales had dropped slightly after 2009, numbers are beginning to rise again.
The following table from “Total U.S. & Canada Box Office Grosses” shows the annual box office grosses. This table confirms the growth of the movie theater industry.
Total U.S. & Canada Box Office Grosses
*in billions.
Works Cited
Apple Tree Cinema 12. O’Neil Cinemas. n.d. 22 July 2013.
“Derry Five Star Cinema.” MovieTickets.com. n.p. n.d. 20 July 2013.
“Domestic Movie Theatrical Market Summary 1995 to 2013.” The Numbers. n.p. n.d. 22 July 2013.
“Movie Theaters in the US: Market Research Report.” IBIS World. n.p. June 2013. 22 July 2013.
“State-by-State Film & Television Economic Contribution.” State by State Statistics. Motion Picture Association of America. n.d. 22 July 2013.
“Total U.S. & Canada Box Office Grosses.” National Association of Theater Owners. n.p. n.d 22 July 2013.
