Consumer Behavior - Observe Table 1. Which of the Groups, According to You, Would Have Demand for Multiplexes

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CONSUMER BEHAVIOR

CASE-I: MAKING MAGIC THE MULTIPLEX WAY

The middle class of India, a virtual nonexistent entity on Independence, has gradually become more sensible, educated and demanding. The overall growth of the economy has given a tremendous thrust to the middle class, expected to grow by 5 to 10 percent annually. It has grown over 57 million by 2001-02 and is expected to cross 153 million by 2009-10.

The average household income in urban India has grown at a CAGR of 5 per cent over the last decade, not only is this, but the age profile of the INDIAN spenders is also undergoing a sea of changes. NCAER has identified five categories of household on basis of income which is summarised in Table 1 below:

The multiplex business has rightly tapped the growth of consumerism in India as it has understood the pulse of the Indian Consumer’s preference towards superior ambience, comfortable seating, air-conditioning and good quality snacks, even at the cost of paying higher price. The average price of ticket in a conventional theatre is Rs. 15-35, while a multiplex charges on an average of Rs. 75-350 and consumer is willing to dish out this extra amount to enjoy the “complete” movie experience, which most of the traditional theatres could not render and are thus facing the fate of near extinction. It thus promises to take the moviegoers’ experience to a whole new level and giving a new dimension to watching movies at theatres.

Posers

1. What lessons can you draw from the above case regarding consumer behavior?

2. Do you think change in consumer perception in middle class has been instrumental in emergence of multiplexes? What can be other reasons?

3. Observe Table 1. Which of the groups, according to you, would have demand for multiplexes?

4. Would law of diminishing marginal utility apply to movie watching? Will this affect...