Marketing Case of Imax China

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(Data source: Research report of Chinese movie audience’s behavior)

Competitor Analysis

It seems that IMAX is the pioneer and market leader in the field of large screen movie. Based on strong technical advantage and long-term cooperation with film companies or famous directors, especially those from Hollywood, the company has explored the movie market and occupied the biggest market share in this area. But IMAX company still faces challenges from other companies. In the market of great China, the main competition comes from Ploymax and DMAX ， which are operated by Poly Company and China Film Group Corporation respectively. Both of them are targeting at large screen movie market, with lower costs and ticket price.

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For most people who buy movie tickets, it is hard for them to tell the difference of these equipments from a professional view. The brand identify is not very clear to the audiences and IMAX is not their only option. Besides, in second and third-tier cities where IMAX is not affordable to the citizens, the other competitors get obvious advantages with lower price.

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However, the market for large screen movie is still blue ocean. The higher competition for different brands, the more chance that audience would have to know the movie with new formate. Also, companies have to invest more in technological development to produce products with better quality. To some extend, the competition is promoting the whole industry.

Marketing Strategy Analysis

Sensed the big opportunity, IMAX China has planed new strategy for opening the market. Basically the strategy is from three aspects.

Focus on technology

When IMAX first stepped into commercial movie area, it was a “chicken or egg” question. The company tried to convince theaters to buy the expensive equipment when there were not enough IMAX movies. Also they had to negotiated with movie companies to transform

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movies into IMAX formate at a risk of limited theater resources. The reason behind this situation is the high cost. In 2001, the company developed DMR technology, which could transform movies into IMAX format at a much lower cost than before. This technological breakthrough brings the business model of IMAX film into reality. It is a significant step for IMAX company to get into commercial movie field.

As a technology based company, there is no doubt that IMAX would pay great attention to technology research and development in order to remain competitive in film market. The annul report of 2014 shows that the company spent 16 million dollar for research and development. Technology is the key for the company to stay at the forefront and make long- term profit.

Corporate with local company

To be a more localized brand in China, it is not sufficient to just rely on selling Hollywood movie and new equipment. As a new brand entered in Chinese commercial film industry, IMAX China focus on exploring the distribution channel and advertising campaign. In 2009, IMAX China started to rent the equipment instead of selling it at one time, which brought a win-win situation for theaters and IMAX company by minimizing the potential investment risks.

More importantly, the company has signed a long-tern partnership with “Wanda” corporation, the biggest cinema operator in the world. The corporation includes installing IMAX systems in cinemas of Wanda and 195 of all 210 theater systems are under the parties’ joint revenue sharing arrangement. From 2007 to 2013, the number of cinemas operated by Wanda and IMAX China reached 210, covering almost all the core cities in mianland China. With the mature business model and great national influence of Wanda, IMAX China is entering its

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golden age. The number of IMAX theaters reached 251 in 2014 and Great China is expected to be a key market in the global strategy of IMAX company in the future.

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(Data source: Chinese Film Industry Research Report of 2014)

Improve brand value

The slogan “A ticket to dream” is a good explanation for the company’s brand value. In the advertisements of IMAX, the company emphasizes the most intuitive feeling such as the screen size, resolution and sound track and avoids to provide too many technical details, which could be hard to understand by the public. It is the core value of focusing on customers that helps IMAX China gain favorable reputation and considerable profit.

Differ from the global strategy of IMAX company, the marketing strategy of IMAX China has to be localized and suitable for Chinese customers. Buzz marketing and differentiated strategy could be effective ways for opening Asia market. There were only 14 IMAX screen in China for Avatar in 2009 but contributed 25 million dollar movie box revenue, which was a miracle at that time. Public started to realize the watching experience in IMAX theatre was totally different. Now, watching IMAX is regarded as kind of superior entertainment, with a combination of movie story, atmosphere and service. Many Chinese customers are willing

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to pay 100 RMB or even more for a ticket of IMAX movie, not only for the extraordinary watching experience, but also for the famous brand.

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(Data source: Chinese Film Industry Research Report of 2014)

Potential problem

With the huge success in China market of IMAX, the time of “chicken or egg” has gone. However,the potential problem “whether to put all eggs into one basket” still exists. The Company depends principally on commercial movie exhibitors, whose systems account for