Marketing Strategy for Regional Films India to launch in the U.S. market

Introduction

Regional Films India (RFI) is an Indian regional language movie distributor based out of Mumbai, India. A lot of Indians have immigrated across the globe and especially to the U.S. RFI has been distributing movies in India for long and now wants to expand its services internationally. RFI is looking for opportunities and avenues of launching its products (movies) in the U.S. market initially and then across the globe. RFI will distribute movies in the U.S. market through its U.S. subsidiary and will be ready to launch in the Fall of 2017. RFI plans to enter the U.S. market with Indian regional language movies that will have the lowest barrier to entry. RFI will help to bring the big screen nostalgic experience of regional movies to the Indian Americans in the U.S.

Before creating the marketing plan for RFI, it was important to understand the working of the industry and business as well the U.S. market. The below figure shows the working model of RFI. 

RFI deals with B2C as well as B2B clients. Regional movies are produced in India and RFI buys the movies at a fixed fee per screening. In the B2C track, RFI plans the theater screenings in different cities and markets the movie to the consumers. Consumers buy the tickets from different platforms or at the theater and enjoy the movie on the big screen. Theaters retain 40% of the total revenue generated and pass on the remainder to RFI, thus RFI makes money. Part of it is then invested to buy other regional movies as well as market them. In the B2B track, RFI re-sells the movie to different groups for a fixed price and generates revenue from the surplus margin. 

Market Background and Research

India is the largest producer of films in the world and second oldest film industry in the world which originated around about 103 years ago. This gives RFI a strong incentive to take the regional movies globally and distribute them in the U.S. and across the globe. In India, there are 22 official languages that include Assamese, Bengali, Bodo, Dogri, English, Gujarati, Hindi, Kannada, Kashmiri, Konkani, Maithili, Malayalam, Marathi, Meitei (Manipuri), Nepali, Odia, Punjabi, Sanskrit, Santali, Sindhi, Tamil, Telugu, Urdu and many more dialects. Indian film industry is expected to reach $3.7 billion by 2020 and thus has a huge potential to reach the U.S. market. Hindi movies, famously known as Bollywood movies are quite widespread and distributed globally. But, there are as good as or even better regional movies that don't get the opportunity or platform to get screened globally. Few of the languages for better regional movies are Kannada, Malayalam, Marathi, Punjabi, Tamil, and Telugu.

As RFI is looking forward to launching its services in the U.S. market, it is critical to understand the market. One of the primary customers for RFI is going to be the Indian immigrants in the U.S. (Indian Americans). Per 2015, Indian Americans comprise of 4 million people, that represents around 1% of the entire U.S. population. Most of the Indians live in the bigger cities and metro areas like NYC, New Jersey area, Philadelphia, Chicago, San Francisco Bay area and many more. The table in the image below shows the top 10 areas with maximum Indian population. Approximately 24% of the Indian American population can understand/speak Hindi and that justifies the Hindi movies or as popularly known Bollywood movies being famous in the U.S. But, there are a lot of Indian regional language speaking Indian Americans that might be interested in the regional language movies. The below image shows the approximate percentage of Indian Americans speaking regional languages. 

Another aspect of the market research is to find the socioeconomic background of the Indian Americans. Per the data by PEW research, the median annual household income for Indian Americans is $88,000 which is much higher than all Asian Americans ($66,000) and U.S. households ($49,800). Only 9% of adult Indian Americans live in poverty as close to 75% of Indian Americans have at least Bachelors degree.

Needless to say, RFI has direct and indirect competitors in the U.S. The below image shows the different players in the market for different regional languages.

Marketing Strategy - Segmentation, Targeting, Positioning

After understanding the company, industry, market and socio-economic background, few critical points to be considered in the marketing strategy are

• Increase awareness of RFI in the U.S.
• More movies, More cinema theaters, More cities
• Penetrate into the market
• Increase customer loyalty
• Gather customer service feedback to improve the product offerings
• Eventually grow the business in general and in the U.S.

Being new in the market, RFI is cost constrained, budgets are tight and therefore the marketing strategy is designed to be cost sensitive and IMPACTFUL!

As discussed, RFI will work with both B2C and B2B clients. Thus, both types of clients are in consideration for market segmentation. In B2C, Indian Americans can be micro-segmented by the regional languages they speak. Consumers who are interested in learning different cultures or linguistic experts can also be one of the segments. Serious international movie followers or movie buffs that might be interested in a certain topic can also be targeted. In B2B, RFI can look for Indian sub-ethnic groups or community groups by language as a big customer. The below image shows the market segmentation in detail.

To make sure the marketing program is effective and efficient, it is important to hone the market and target specific sections. The target segments for RFI are shown below.

Market Positioning is the totality of the offering to the public that provides the value proposition. RFI's positioning is

“ Regional Films India is a corporation that specializes in the purchase and distribution of Indian regional films in the U.S. As soon as a new Indian regional movie is released, RFI will screen the movie in the U.S. at a movie theater near you. RFI will take you on the big screen nostalgic experience, similar to the one that you used to have in India that no other alternative/competitor can do. RFI will bring India closer to Indian Americans by bringing movies, values, and culture to the U.S. ” 

Product, Price, Promotion, Placement

In the marketing mix or the 4Ps; a product is a vital entity. A product is anything that can be offered to a market to satisfy a want or a need. RFI’s plan is to offer a product as a service. RFI’s primary product is an Indian regional movie screened at a movie theater for target consumers. Quality of the movies is critical and RFI will make individual item decisions. The figure below illustrates the process RFI will follow to make product decisions.

In terms of pricing, RFI will use inelastic demand curve as the product is unique and catered to well to do the socio-economic segment. RFI will implement multiple pricing (dependent on a combination of products, channel, communication mix). RFI will NOT initially sell at a loss and may consider penetration pricing. RFI may consider implementing price customization depending on the city. RFI may consider adaptive pricing based on competitive blockbuster movies. For cost assessment - RFI will use target costing, competitive benchmarking, and break even analysis to determine a good price spot. The current price floor is $8 per ticket (based on break even point) and the price ceiling is $14 per ticket. 

For promotion, RFI should build its brand equity. Brand equity reflects the way consumers think, feel, and act with respect to the brand. RFI brings a nostalgic feeling of watching movies on big screens at a theater in India. The high-quality branding of RFI can help to improve perceptions of the company as well as the movies it distributes. Consumer’s willingness to pay a higher price can be justified for higher quality. RFI can enjoy increased effectiveness of promotion programs due to improved quality products and high perceived value.

The market channel is a set of mechanisms or network via a firm goes to the market. The below images demonstrate the market channels and channel design RFI will implement to market the brand and products to its target segment.

In conclusion, RFI should implement the following recommendations for a successful market entry in the U.S.

References:

This article was a part of academic research. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company/agency. Examples of analysis performed within this article are only examples. They should not be utilized in real-world analytic products as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of any entity.

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