Calculator Allowed: Yes



Transcription of this question: 3.Barreiro Leisure Complex (BLC)Barreiro Leisure Complex (BLC) owns many cinemas and ticket sales to the cinemas havehistorically been BLCS main source Of revenue. However, the current economic recession hasaffected demand patterns for many leisure activities, including cinema attendances. BLC’smanagement decided to broaden its product range by creating the ultimate community gamingexperience. At a cost Of USS280000, BLC converted one Of its small movie theatres into a largeWi-Fi (wireless) gaming area with 50 computer screens to allow BLC to Offer ‘Cinegames”Cinegames transforms individual game play into group play. The area also includes special effectssuch as fog, black light, flashing green lasers, high-definition digital projectors and vibrating seats.BLC produced the following figures:Cost Of investment to convert one theatre to a Cinegames experience: USS280 000.End Of year Estimated2345revenuessooos)648814212488Market research revealed that a key market segment for the Cinegames experience was the male18—30 year-old age group. The research also showed that leisure companies will need to Offer amore varied product mix, not only to include different movies but also a range Of products to caterfor families. It was predicted that parents could go to watch a traditional movie while sons go toCinegames and daughters go to Other attractions.Initial results Of the launch Of Cinegames were beyond BLCS expectations. On the weekendscrowding and tramc congestion was building up around the complex, putting pressure on localinfrastructure. Despite increasing prices, BLC found that the Cinegames experience was startingto increase the attendances at some Of its screenings for traditional movies watched by families.BLC started to consider the possibilities Of transforming a second theatre into an additionalCinegames experience. However, a local community pressure group argued that BLCS decision toconvert one Of its theatres was starting to impact considerably on the local environment.(Source: adapted from http:/,junv.vjoystiq_conV2007,”02/27/movies-theateß-tcvbecome-arcades-of-the-future’,21 September 2009](This question continues on the following page)(Question 3 continued)(a)(b)(c)(d)Define the term pressure group _(i) Calculate the payback period Of Cinegames.(ii) Calculate the average rate Of return (ARR) Of Cinegames in the first fiveyears Of its operation.(iii) Comment briefly on your results from parts (i) and (ii).Analyse the usefulness Of market segmentation to BLC.Discuss whether BLC should open a second Cinegames experience.[2 marks][2 marks][2 marks][2 marks][5 marks][7 marks]

Leave a Reply