Executive Summary
AMC is a leader in providing a cinematic entertainment experience panning across 900+ locations. Traditionally, AMC has leveraged innovative mechanisms such as megaplex stadium, recliner seats, dine-in theaters to create an entertaining environment. AMC is faced with declining sales, a fundamental shift in the lifestyle of the core audience, and the impact of state-mandated shutdowns due to COVID-19. Summit 6 has launched a strategic marketing initiative to uniquely position AMC as a market leader with cutting-edge entertainment, expand the core market, create blue ocean opportunities and strategic partnerships to drive incremental revenue and value.
Opportunity Analysis
Our white space analysis comprises three factors: Current products and services offerings, new and improved products/services offerings, and added core competencies. First, AMC Theaters has been around since 1920 and is the leader in the multi-cinema entertainment experience. AMC revenue comes from 30% - 40% percentage of the total revenue shared with production studios. The other revenue stream comes from selling snacks and drinks at the concession stands.
We strongly believe there are high growth opportunities to create new products/services and improve existing offerings. One product creation is partnering with Playstation and game studios to build immersive VR and gaming experiences. The other opportunity is an upgrade from existing services providing diversity in movie titles, including international and independent films, blockbusters, and classic movies. By adding core competencies in hospitality, creating gaming content, and unparallel movie-watching experiences, AMC will sustain a competitive advantage over competitors.
Our goal is to increase attendance and create new markets by leveraging on blue ocean strategy. Our 5C market strategy analysis focuses on determining our target customers, AMC's value creation and unique selling proposition, collaboration within our external networks, understanding our direct and indirect competitors, and focusing on innovation by launching a new gaming platform and superior movie experience.
Target Audience Segmentations
Our market strategy analysis created two personas: core gamers and core moviegoers ages from 13 - 35 ages. Both personas have lifestyle similarities, including diversity, a sense of community engagement, strong social media presence, and experience seekers. These two personas will guide us on our segmentation of geographical and psychographic variables focusing on high concentration Gen Z and millennial markets and analyzing their lifestyle, personality, activities, and interest. By analyzing their cluster, we are able to build a perceived value creation through unmet needs.
Consumer Behavior
In order to succeed, our focus is to get inside the heads of our target audience to know what they would be willing to invest in and spend time and money on. We launched an AMC survey that would reveal audiences' personal preferences, demographics, and specific interests. The majority of participants were 13 - 35 years of age, confirming that those who would be the most invested in the new AMC would be Gen Z and Millenials.
The participants highlighted themselves to be avid video game players- further solidifying our assumption that molding video games into the new face of AMC were the right direction. The survey portrayed the amount of money our potential clients currently spend on their video game hobbies, along with their priority, paving the way into how we would formulate pricing. While the love of video games was loud and clear, the survey revealed that the age-old hobby of moviegoing was still prevalent. Feedback from this survey was critical to revealing what aspects we should focus on moving forward, including the importance and value of customer service, hospitality, and eco-friendliness.
In addition to the survey, Summit 6 agency conducted focus groups in which a conversation-based approach was used to gather additional information on our target audience. We spoke to a group of 10-12-year-olds and multiple groups of 13 - 35-year-olds. Video games proved to be significantly popular during these discussions once more.
Younger demographics were thrilled with the idea of playing video games at the local theater. In contrast, the older demographics still enjoyed going to the movies, predominantly big-budget blockbusters, and the thought of playing video games was a fun addition to the new AMC.
The focus group members were collectively intentional with how they spend their money at their respective ages. Being social for our 18 and under age group is by spending their free time gaming online while video chatting with their friends. Video games nowadays do not have many local cooperative play opportunities, so to play the same game together with friends, everybody needs their systems, which the new AMC will provide. Professional gamers and, more importantly, influencers are now looked upon for inspiration and knowledge. We have learned that gaming is here to stay, and the new AMC is bound to attract the attention of our newfound clients.
Brand Positioning Statement
We recommend that AMC portray that they are a unique company with new features unlike any other. AMC is a new type of entertainment company that maintains the quality they have had for years.
"For 13 - 35-year-olds looking for gaming and movie entertainment, AMC Entertainment is the only brand within the gaming and motion picture industry that offers the most exciting and immersive gaming and moviegoing experience. AMC Entertainment provides a unique ecosystem designed for gamers to learn, play, and compete while delivering an elevated cinematic experience."
Product Definition
The new AMC will be the leader in e-gaming through innovative partnerships, including Sony and GameStop. Fans will get early access to upcoming games incentivizing gamers to play games at their local AMC theaters. AMC will host gaming events, allow friends to play against one another, and provide every gaming system and latest games. The moviegoing experience will be reimagined with upgraded seatings and included luxurious amenities. Assigned seatings will be a standard now.
In addition to the classic necessities–Popcorn, candy, and soda, AMC will partner with local food carts and restaurants to provide an exquisite dining experience. Our target segment is environmentally conscious; therefore, we will promote AMC to become a B-corp, carbon-neutral, and remove single-use plastics from theaters.
Promotional Strategy
AMC's main promotional focus will be on social media. AMC's target audience uses TikTok, YouTube, Instagram, Twitch, and Reddit. TikTok is free and will be used for 'peek behind the curtain' and trend videos. The other outlets will have banner ads and videos highlighting AMC's redesigned theater and brand new features. Our secondary promotional focus is our multi-tiered loyalty program.
We want AMC to capture market share immediately before other entertainment companies replicate the redesigned business model. Early market leadership will help AMC govern in the customer's minds that they are the best. AMC loyalty program will help to retain customers.
Distribution Channels
Our recommendations to AMC distribution channels are via direct, distributors, retailers, and alliances. Strategic alliances will be established with Gamestop, Uber & Lyft, and Twitch.
Direct – AMC will allow sales of tickets and subscriptions directly
to the end-users via their website and mobile application.
Distributors – will be able to resell the AMC payment cards.
There will be a 15% discount on per month pricing for the distributor.
Retailers – AMC will provide a discount structure for resellers to
re-charge the AMC payment cards and sell retailer branded cards via their brick and mortar outlets.
Alliances – AMC will enter into alliance partnerships with Uber & Lyft to enable ride-sharing, Gamestop for game purchasing, and Twitch for content viewership.
Pricing/Value Recommendation
AMC will offer a multi-tiered pricing strategy combined with subscriptions and ala-carte options. AMC branded NFC-based cards will be provided that can be reloaded electronically by the user or a retailer. Payments can be made by tap-and-go functionality within the redesigned AMC mobile application.
AMC pricing structure is targeted for multiple audience segments. We learned that the AMC target segment is price sensitive. As such, along with the subscription model, AMC will also offer ala-carte options. The pricing tiers are highlighted in Appendix 4.
We recommend for AMC to establish a value point system. For every dollar spent at the AMC movie theater, a virtual point will be added to the account holder. Parents and family members will have the ability to refill user accounts. AMC would enable a reward system that would allow a family member to add points to the account holder. Points collected can be used to make payments or purchase merchandise items, including movie tickets, games, concession stand items, memorabilia, and other ala-carte options.
Customer Management
To optimize customer retention and create lifetime value, AMC will enable the following choices:
Data-driven email mailing lists - Using proper data analysis, AMC will cater emails to be intentional and rewarding to our customers. Special occasions, such as Birthdays, would provide customers with free movie tickets and gaming credits.
Loyalty Program - The more a customer visits AMC, the more rewards and experiences they can earn. To promote higher traffic, AMC would offer daily Rewards, including free popcorn, drinks, and Uber credits. The top moviegoers will earn opportunities to attend exclusive red-carpet events. The top gamers will earn opportunities to play against their favorite e-gamers and attend live e-gaming events.
World Class Service - Each AMC theater will have dedicated wait staff to offer in-seat service.
Conclusion
Since 1920, AMC theaters have been the ambassador of entertaining moviegoing experience to millions of movie fans. While the traditional offerings were innovative, AMC has experienced a slowdown in sales to alternate options such as Netflix and gaming apps.
As Summit 6 agency embarked on this strategic marketing initiative, our priority was to gain insights into the AMC target market. We identified two core personas of gamers and moviegoers with the highest frequency of more than one visit per month to a theater. We discovered that the persona lifestyle similarities included diversity, social media engagement, environment friendly, experience over materialism, and individualism with community engagement.
From a value perspective, our recommendation to AMC is for a complete rebrand that offers a next-level movie and gaming experience by delivering a superior variety of contents along with stellar hospitality. We established AMC to be the only brand within the gaming and movie industry that offers the most exciting and immersive gaming and moviegoing experience.
We have redefined the moviegoing experience and the pricing strategy that comprises subscriptions and ala-carte options. Our marketing strategy consists of direct channels, distributors, retailers, and alliances to make the vast gaming and movie world accessible.
We believe that by implementing recommendations from Summit 6, AMC would establish leadership in cutting-edge entertainment with the latest cinematic content, immersive gaming experience, and community engagement. AMC would be able to expand its core market and create a differentiated strategy and effective channel partnerships. The enhanced marketing strategy, pricing structure, redesigned theater layouts, expansion to new gaming segments would enable AMC for success and effective revenue increase.
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