Shall we sing?

Lau Hang Yu

Do you know…• That there are

10,000,000 customers that went to a particular karaoke shop in a year.

Map of Hong Kong

My Presentation

• Part1: The market structure of the karaoke

service industry• Part2: Phenomenon: why it is hard to find

vacancies for karaoke in Sundays lunchtime…

Part 1 Market Structure

Market structure

• Oligopoly• small no of firms • Large firm size• Products : close or perfect

substitutes• Frequent advertising

They react with one another…

I will start

providing

breakfast in the morning

.

I will do

also!!!

Part 2 why there are more people willing to sing karaoke

in the lunchtime?

Note that in lunch time a serving of lunch is provided without additional cost, while additional food or snack in happy hours requires additional charge.

Neway California Red

Lunch time 40 36-44

Happy Hour 55 79

Prime time 69+59+69 79+49(29)

Overnight 55+59 69+49

Assumption…

• Mary is willing to pay a maximum of $30 for an hour to enjoy singing karaoke.

• She must have lunch for one hour since she is a healthy girl

• She values a lunch quality as good as the one provided by the shop as $28.

• Assume that no diminishing marginal utility applies to the four hours of her singing.

Going to lunch karaoke for three hours…You must have

lunch for one hour since you are a healthy guy

Cost= price of the services(44)+ alternative use of time(2 hours)(18*2)=(44+18*2)=80

You value a lunch quality as good as the one provided by the shop as $28.

Benefit=the enjoyment of the services=30*2+28=88

B(x)>c(x)

Going for karaoke in happy hours for four hours..

C(x)=cost you pay for the service+ alternative use of time=55+18*4=127

B(x)= benefit for singing four hours=30*4=120

B(x)<c(x)

Conclusion…

• Singing in different timeslot would generate different cost and different benefit

• Incentive does matter!• Providing catering together with karaoke

services increases consumers’ benefits thus increases their incentive for singing.

• Diversity of services provided by karaoke shops increases consumers’ incentive.

So, next time if your friend ask you…

When do you want to sing?

Shall we sing

together for

karaoke?

ENDThankyou!