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Cinemark Bargaining Power Of Buyers

744 Words3 Pages

Bargaining power of buyers When it comes to Cinemark Holdings Inc., the customer’s bargaining power varies. The customers bargaining power is determined by where the customer is located. If the customers live in a small city then the customers have a limited amount of options. This means that the customers bargaining power is low. For instance, if Cinemark is the only movie theatre in a particular area then the customers can only go to a Cinemark theatre to watch a movie, because Cinemark is there only option. On the other hand, if customers live in a larger city then their bargaining power is high because they have multiple options to which movie theater that customers can choose from. The customers can decide based off of experience, concessions, …show more content…

Cinemark’s main suppliers are the movie studios and distributors. The reason why the movie studios and distributors have such a high amount of bargaining power is because they are the only sources that provide Cinemark with their movie. If Cinemark does not pay for a particular movie (especially the popular movies) customers can decide to go to a competitor, which means loss in potential revenue. So movie studios and distributors have the leverage to determine how much Cinemark has to pay for a movie. This is one of the reasons why Cinemark and their competitors do not earn most of their revenue from ticket sales. Cinemark’s film rentals and advertising costs for 2016 were about $578.2 million, compared to $548.9 million in 2015 (Cinemark, 2016). This increase was due to the high amounts of blockbuster films being released in …show more content…

Other than going to their competitors, such as, Regal, AMC, and drive-in theatres, customers have other options to fulfill their need to watch a movie. These include Netflix, Hulu, movie pirating, DVD/Blue-Ray, and other ways to watch movies outside of going to a Cinemark theatre. As the increase in popularity of home streaming increases the need to watch movies at Cinemark theatres decreases, which impacts Cinemark significantly (Stebner, 2013). These substitutes can be cheaper and more convenient for customers to watch a movie. Some customers would rather wait months until a movie is released to watch it at home and for less than the cost of a movie ticket. Although it is illegal, there are also ways for customers to download the movies that are released at the same time that Cinemark decides to show the

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