MARKETING

PLAN

Written by:

Ricky Erling Chris Gillet Sean Jordan

Raymond Ray Amanda Pereira David

Romo
MKT 3300-008 Due December 11, 2013 Group 10

TABLE OF CONTENTS

I.

EXECUTIVE SUMMARY

II.

THE CHALLENGE

III.

SITUATION ANALYSIS
A. Analysis of the Company and the Collaborators
B. Analysis of the Customers
C. Analysis of the Competitors
D. Analysis of the Context
E. SWOT Analysis

IV.

MARKETING STRATEGY
A. Segmentation
B. Targeting
C. Positioning

V.

MARKETING PLAN
A. Product
B. Price
C. Promotion
D. Place (Distribution)

VI.

SHORT AND LONG TERM PROJECTIONS

VII. CONCLUSION
VIII. APPENDIX
IX.

REFERENCES

I. EXECUTIVE SUMMARY
Alamo Drafthouse Cinema (Alamo) originated in Austin, Texas in 1997 when a
couple, Tim and Karrie League, decided that they wanted to create a unique
Alamo Drafthouse Experience for local movie fans to enjoy great films with
quality food and local beer. After starting with only one movie screen, Alamo
expanded into relatively larger theaters and greatly expanded their number
of locations to California, Colorado, Michigan, Missouri, New York, Texas, and
Virginia.
In August 2013, Alamo opened a new location in Richardson, Texas on North
Central Expressway and Beltline Road, but unfortunately, it is not well
known. In the survey we conducted, of the 42 who responded, only 50% had
heard of Alamo, and no one selected it as their favorite theater. Therefore,
we concluded that increasing brand recognition through new inexpensive
advertising techniques, to ultimately increase customer awareness and
retention, is the first major step in making this theater successful.
Generally, Alamo relies heavily on word-of-mouth for advertisement to keep
spending costs to a minimum, and budget is the main factor inhibiting Alamo
from becoming recognized at a faster rate. Also, due to the budget
constraints, Alamo, leased out an inexpensive building, and in turn, it is in a
location with limited exposure to the general Dallas and Richardson public.
Although this location is not ideal, there are still a number of cost-efficient
ways Alamo can make their presence known and gain a stronger customer
base. However, before we can propose a solution to this problem, we first will
analyze the Richardson market and organize it into four segments based on
demographic and behavioral segmentation variables. However, our target
market will be frequent moviegoers between the ages of 18 and 39. When
approaching this market, we are aiming to differentiate Alamo from their
competitors and position Alamo so their potential customers will understand
that Alamo is not a traditional dine-in movie theater, but rather, it has the
whole Alamo Drafthouse Experience to offer.
Based on our marketing strategy, in the short run, we plan to focus our
efforts in enhancing Alamos products and services, broadening their
customer base through different forms of advertising and offering additional
promotions. In the long run, we will look into how to expand Alamos
placement, discussing potential future locations.

II. THE CHALLENGE

As previously stated, Alamos main challenges are lack of extensive funds,
brand recognition in Richardson, and customer retention. Aside from those
challenges, generally, once people first learn of Alamo, they often compare it
to Studio Movie Grill as if it is just a dine-in movie theater.
Alamos goal is not to be a traditional dine-in theater. Their goal is to educate
their movie-loving customers that they are dedicated to keeping the moviewatching experience safe for movie fans, serving quality food and drinks,
and upholding high presentation standards (Alamo Drafthouse Cinema,
2013). Therefore, since this is not the general portrayal of Alamo, we are
challenged with not only trying to expand Alamos customer base but
educating them of the unique experience Alamo has to offer.

III.

SITUATION ANALYSIS

A. Analysis of the Company and the Collaborators

Who we are.

What we do. Alamo offers a variety of movies and other TV events with
quality food and beverages.
Goal. Alamos goal is to provide a unique movie experience for movie fans.
Strategy. Alamo [maintains] the latest and greatest in projection
technology so that every show features crisp, bright digital or 35mm
presentations with booming surround sound, [and also programs] repertory
titles and special event you wont find anywhere else (Alamo Drafthouse
Cinema). In addition to its high-quality picture, Alamo also supports local
breweries to gain more customers and offers various movie events, such as
movie sing-alongs and movie quote-alongs.

B. Analysis of the Customers

Alamo customers are mostly movie fans but also range to all people who are
looking for a dine-in movie experience.

C. Analysis of the Competitors

Other dine-in movie theaters. Studio Movie Grill
Regular movie theaters. Unless a customer is specifically looking for a
high-quality dine-in movie experience or to watch classic films, all other
standard movie theaters, such as AMC and Cinemark, may take high
precedence over Alamo.
At-home movie experience. Due to the economic slowdown and online
streaming options, such as Netflix or Hulu, customers may prefer to watch
movies from home.

D. Analysis of the Context (PEST Analysis)

When looking at the political and economical environments, we found that
due to the economic slowdown and Alamos major competitors, Alamo must
focus on inexpensive advertising to increase their customer retention.
Currently, they hold some free events and offer Groupons as a form of
advertising; however, although they receive high turnouts for those events,
many of those customers do not return.
Additionally, when analyzing Richardsons social environment, we found that
aside from the college population, Richardson is generally an older market.
Therefore, to save costs, Alamo should keep their current location but
advertise more in areas with a younger demographic, such as college
campuses and advertising on the colleges student discount program.
Currently, Alamo Drafthouse does offer a $1 savings on the listed ticket price
for students; however, they do not actively advertise that.
Regarding the technological environment, Alamo keeps up with current film
technology and should continue to do so in order to maintain competitive
qualities.

E. SWOT Analysis
STRENGTHS

Strict policies
Entry fess and food pricing
Beverage variety
Unique movie experience
Versatility with menu offerings
Comfortable
Online reservations

WEAKNESSES

OPPORTUNITIES

Accessibility
Advertising
Adjust menu
Expand
Minor adjustments

Too small
Limited public awareness
Location
Dining setup
Limited movie selection
Focusing on educating customer
Dining experience
THREATS

All other movie theaters

Economic slowdown
Loss of customers due to strict
policies
Other theaters versatility

STRENGTHS

Strict policies. A part of the Alamo Drafthouse Experience is watching a

movie while enjoying quality food and beverages in an unobtrusive
environment. Therefore, Alamo enforces a strict not talking/texting policy,
and they also no not allow babies and young children in the theater to
keep interruptions to a minimum.
Entry fees and food pricing. In order to remain competitive, Alamos
entry fees range from $8.75-$13, depending on the time of the showing
(matinee or not) and type of movie (regular or 3D). Although their entry
fees are relatively similar to competitors, their food and beverage prices
are slightly cheaper or equal to their competitors. For example, a fountain
soda at a standard theater cost approximately $5 while at Alamo local
craft beer prices start at $5.
Beverage variety. Regardless of location, Alamo supports and
collaborates with local breweries for a unique beer list. Aside from beer,
Alamo also has a full bar with a variety of wines, cocktails, and other
alcoholic and non-alcoholic beverages.
Unique movie experience. In addition to a full food and drink menu,
before every showing, they show an Alamo-original pre-show, consisting
of video clips that relate to the movie about to be shown, and they
advertise upcoming events at Alamo. They show and offer current films,
classic films, classic movie sing-alongs and quote-alongs, and occasionally
big TV events, such as college football games.
Versatility with menu offerings. Because they are a smaller company,
they can change the menu according to customer demands.
Comfortable. Offers comfortable seating in clean, spacious theaters.
Online reservations. Alamo provides its customers the option to reserve
seats online to avoid long lines and to ensure good seating.

WEAKNESSES

Too small. Alamo has a limited movie selection, number of screens, locations,
and its not well known, so it can be difficult to retain customers.
Limited public awareness. Due to budget limitations, Alamo relies heavily on
word-of-mouth advertising; therefore, they have trouble reaching out the mass
public.
Location. Their location is somewhat hidden and is not a high traffic area,
making it difficult to establish brand recognition in Dallas. Also, Richardson is
generally an older market, which may not be who they want to market towards.
Dining setup. Tables are too far from seats to eat comfortably, seats are too
close, and reading menus and writing orders is difficult in lighting provided.
Limited movie selection. Small movie selection caters to less people, making
it difficult to retain more customers.
Focusing on educating customer. The different concept causes the
customer to learn how to enjoy the movie in this new set up.

Dining experience. The dining service is limited causing the customer to

rethink coming back.

OPPORTUNITIES

Advertising. Alamo could offer text alerts to customers for special events,
expand its social media presence, and work with other local companies and
colleges to increase customer retention and spread word-of-mouth.
Adjust menu. The menu is slightly cluttered and some items are difficult to
visualize, so they should add pictures for easier viewing of popular items.
Expand. Once Alamo generates more revenue at this location and has a larger
budget, they should expand into other Dallas locations, such as the Arts
District, where there might be a larger audience interested in film appreciation
and the Alamo Drafthouse Experience. This would greatly increase brand
recognition, customer retention, and advertising by word-of-mouth.
Minor adjustments. Making minor changes in the service, such as
ordering procedure, can enhance the movie experience. Currently,
customer must write down what they want or need from the server and
place it in a clip in front of their seat. Occasionally, the paper will not get
taken right away, and it is difficult to see what is being written in the
minimal lighting provided.

THREATS
1. All other movie theaters. Alamos main competitor is Studio Movie Grill
because most first-time customers see Alamo to simply be a dine-in
movie theater. On the other hand, for those movie enthusiasts who see
Alamo as a place to watch and appreciate a good film and meal, Angelika
would be Alamos other main competitor. Other competitors include AMC,
Cinemark, iPic, which are increasing their market share, and some are
starting to offer alcoholic beverages.
2. Economic slowdown. A slowdown in the economy will cause less
disposable income for customers. Therefore, there is a lower demand for
an outing at the movies.
3. Loss of customers due to strict policies. Families are less inclined to
come Alamo due to strict no babies or young kids policy, potentially
hurting Alamos overall reputation among families regardless of the
occasional family, kid-friendly events they hold.
4. Other theaters versatility. Larger theaters have more versatility with
showtimes and multiple locations.

IV.

MARKETING STRATEGY

A. Segmentation
Considering Alamo has a limited marketing budget, we are focusing on
segmenting Richardson. However, in the future, if our Richardson location

becomes fully stable and our budget permits, we will adjust our focus to the
remainder of Dallas. To segment the Richardson market in Alamos favor, our
segmentation strategy is based off the following two segmentation variables:
demographic and behavioral segmentation.
As previously stated, Alamo does not allow children under the age of 18 into
the theater unless accompanied by an adult for a specified event/viewing
intended for minors. Therefore, demographically speaking, we segmented
our market based on two age groups: people ages 18-39 and 40+, which
make up approximately 76.8% of the Richardson population as of 2012 (U.S.
Census Bureau, 2012).
Of those age groups, we further segmented our market using behavioral
segmentation, measuring their movie viewing frequency. Within each age
group, we segmented them further into two categories: frequent moviegoer
and infrequent/occasional moviegoer. For our purposes, we consider
frequent moviegoers those who go at least once a month on average, and
infrequent/occasional moviegoers are those who do go less than once a
month on average.
To ensure effective segmentation, we organized our segments to be
homogenous within, heterogeneous between, and operational. *Refer to
appendix* In 2012, Motion Picture Association of America (MPAA) conducted
a study, analyzing the frequency of moviegoers within various age groups in
the U.S. and Canada. Since we are unable to conduct such an extensive
study due to budget limitations, we are using their results as an approximate
representation of the moviegoers in Richardson. After segmenting the
Richardson market, we determined each segments estimated size, their
characteristics and preferences, their needs and wants, when they will most
likely utilize our products and services, and the best way to reach them. The
following table depicts are our findings:
18-39
40+ Infrequent/
Infrequent/
Occasional
Occasional
Moviegoer
Moviegoer
~25% of
~50% of
45% of frequent
33% of frequent
Estimated
infrequent
infrequent
moviegoer
moviegoer
Size (%)
moviegoer
moviegoer
population
population
population
population
Characterist Slightly price
Not Price
Price sensitive
Price sensitive
ics &
sensitive
sensitive
Relatively less
Relatively more
Preferences Relatively less
Relatively more
likely to have
likely to have
likely to have
likely to have
kids
kids; familykids
kids; familyfriendly
Less interested in
friendly
atmosphere
Enjoys the ideal
the ideal movie
atmosphere
Less interested in
movie
experience
Enjoys the ideal
experience
the ideal movie
18-39 Frequent
Moviegoer

40+ Frequent
Moviegoer

movie
experience

Needs &
Wants

Good Food,
Beverages, &
Variety of
Movies/TV events

Product/
Service Use

General Outings

Good Food,
Beverages, &
Variety of
Movies/TV
events

experience
Inexpensive
prices &
newest/popular
movies

Inexpensive
prices &
newest/popular
movies

Special Weekend
Special Weekend
Outings
Outings
Social Media
TV/Mail
Social Media
TV/Mail
Advertisement For college
For college
Best Way to
s
Advertisements
students: local
students: local
Reach
campus student Less social
campus student Less social media
discount
media
discount
exposure
program
exposure
program
General Outings

B. Targeting
We chose to use the Single Target Market Approach, focusing on the 18-39
Frequent Moviegoers. Since Alamos core competency lies in the Alamo
Drafthouse Experience centered on the enjoyment of the movie, this
segment of the market has the most to gain from the Alamo Drafthouse
Experience.
Additionally, the 18-39 Frequent Moviegoer demographic is appealing to
Alamo because they are less likely to have children and more disposable
income to spend on entertainment, dinner, and drinks. Furthermore, this
segment is highly exposed to social media, making them fairly easy to reach
without requiring a heavy marketing expense. Using social media marketing
will allow Alamo to maintain in contact with their customers before and after
the experience at the theater, potentially creating an increase in customer
retention.
We chose not to target the 40+ Frequent Moviegoers and the
Infrequent/Occasional Moviegoers because they will benefit less from the
Alamo Drafthouse Experience. 40+ Frequent Moviegoers will be more
expensive to reach since a smaller percentage of them use social media in
comparison to the 18-39 age group. Also, this segment is more likely to have
children and be more price sensitive, so they may not see as many movies,
and if they do, they are more likely to want to go to a family-friendly theater.
On the other hand, Infrequent/Occasional Moviegoers mostly go to the
movies to only see the movie, whereas the Alamo Drafthouse Experience is
more geared around film appreciation while enjoying quality food and drinks.

C. Positioning
Because Alamo is a small share of the market, relative to other movie
theaters, it must set itself apart from the competition by positioning itself as

a unique experience and not just a dine-in movie theater. However, showing
potential customers how Alamo is different from its competitors is one of the
more difficult aspects of marketing this company because most view it as a
dine-in movie theater similar to Studio Movie Grill. Therefore, Alamo must
take a step further to market the Alamo Drafthouse Experience as a whole.
To 18-39 year old frequent moviegoers, Alamo Drafthouse is the
movie theater that creates the ideal movie experience for adults
by shaping the experience around their love of movies and
movie culture.
Separating Alamo from the common movie theater is paramount. Thus, when
the customer is considering seeing a movie, we want them to remember
Alamos distinct movie culture, environment, and dining. We also want these
customers to be connected via social media so that they can benefit from
Alamos unique programming that sets it apart from other theaters.

V. MARKETING PLAN
A. Product

The Alamo brand is about the classic movie experience for the movie
enthusiast. Therefore, Alamo continues to expand on its humble beginnings
in Austin, Texas and expands on Founders Tim and Karrie Leagues love for
watching movies and enjoying fine food and beer/wine with friends. To
combine these passions for movies, food, and drinks with friends, Alamo has
intentionally designed their service model to be as unobtrusive as possible.
To succeed at this goal of an unobtrusive environment, Alamo highly
encourages arriving early to enjoy the pre-movie entertainment, consisting
of old commercials and movie clips supporting the movie to be shown and to
order food and beverage ahead of the movie. Alamo Drafthouse offers a
vast array of modern movies and classic movies to the audience, creating an
environment for the movie nostalgic.
To support a pleasing movie
experience, Alamo Drafthouse enforces a series of strict policies in regards to
electronic devices and even small children. However, for the more outgoing
movie enthusiasts, Alamo Drafthouse does invite audiences to participate in
the movie experience through special events including sing-a-longs and
quote-a-longs with reruns of classic movies. On a side note, in order for
Alamo Drafthouse to rerun these classic movies in the atmosphere they were
meant to be seen, they have to first acquire the films on the original media,
having the benefit of preserving these movies for future generations. Also,
they have special events from time to time for big college football games
and large sporting events available to be watched on their movie screens.

B. Price

Alamo Drafthouse, currently engages in a pricing strategy that seeks to keep

box office prices low in the range of about $7.00 to $10.00 per ticket. This

pricing strategy was developed to gain market share from other dine-in
amenity based chains. We actually met with Alamo Drafthouse executives
and were given some raw data of box office tickets purchased between
September 16 and October 31 of this year. After some analysis of this data,
it is evident that the average amount of revenues Alamo saw from movie
tickets purchased (net of discounts and refunds given) in this month and a
half period was $8.00 per ticket before taxes and $7.00 per ticket after taxes.
The average net revenues per day (taxes excluded) in ticket sales during this
period is about $1,372.00. This means, if they average the same business
throughout the year, their projected net revenues after taxes over the course
of a year would total $500,780.00 from ticket sales alone. We know that
they make most of their profit from the food and beverages they sell, but
based on the survey we conducted, it seems that most people in our target
market would be willing to pay about $15 to $20 per ticket at Alamo
Drafthouse. This being the case, they could probably keep the prices of their
tickets to about $10 to $12 per ticket and maximize the ticket revenues they
bring in. The reason for undershooting is to stay lower than competitors and
help them attract new customers.

C. Promotion
Alamo Drafthouse currently engages in radio marketing avoiding the high
cost of TV advertisement. Furthermore, on December 3, 2013 Alamo
Drafthouse rolled out their loyalty rewards program in the DFW area, Alamo
Victory. This loyalty program is a very big step in the promotion of their
business and really adds some extra benefit in an arena they are struggling
in, keeping customers coming back. These loyalty programs give free movie
tickets on birthdays, atleast two special offers per year, surprises (these
are rewards you pick up after earning visits and purchasing new tickets), and
weekly emails and offers. This is a completely free program to join. There
are four levels that can be achieved. The way it works is that everybody
starts at level 1. Based on how many visits you make, each movie tallied up
differently, you can move up to the next level. Each level increases in the
amounts of discounts and offers you receive, basically rewarding the higher
level customers for their loyalty to Alamo Drafthouse. Now that they have
this program, they can create returning loyal customers as they bring more
in from their other promotions. Their main way of advertising is by word of
mouth. They may want to consider investing in advertising that would speed
the process of bringing more people in the door by exploiting their main
target market, which we have identified as 21-35 year old adults. They
already send out mail advertisements and coupons for discounted movie
tickets in the immediate area neighborhoods in Richardson, so sending these
out to specific neighborhoods/apartments in zipcodes where they are lacking
many customers, such as West Plano and Addison, could be effective ways to
help get the word out. Also, they could hand out promotions at UTD,
Richland, and Collin College and/or provide special student discounts to
students with student ID for any college or university. Another idea is to

advertise on social media websites and eventually develop and Alamo

Drafthouse App for smartphones so people can look up showtimes and order
their tickets online with ease.

D. Place (Distribution)
Currently, Alamo Drafthouse has only one location in the DFW area which is
located in Richardson, Texas at 75 and Beltline. This location provides a
centralized location in the North Dallas area, however it is not a prime
location. It was just easily accessible for Alamo Drafthouse to expand into
this market for monetary reasons. It doesnt appear that they looked for
strategically placing the theater in a great place for their target market.
Since this is not a very good location, Alamo Drafthouse is currently planning
six future locations in the area. They are primarily focusing on locating
towards the downtown Dallas Area. Some good strategic locations that
would make sense for them to look into based on the target market we are
focused on would be places like Addison, Oak Lawn, Frisco/Allen area, and
Uptown.

VI.

SHORT AND LONG TERM PROJECTIONS

VII. CONCLUSION
VIII. APPENDIX

IX. REFERENCES
http://quickfacts.census.gov/qfd/states/48/4861796.html