Cds, a closer look

Scott Reina ∙ Sjr05d@gmail.com

CIRQUE DU SOLEIL:
A CLOSER LOOK
By Scott Reina


Introduction
Cirque du Soleil is a powerhouse global brand and a juggernaut within the entertainment industry. Their
shows have been attended by upward of 100 million guests in nearly 300 cities all over the globe. The
purpose of this paper is not to critique or give outlandish suggestions regarding Cirque du Soleil but to
showcase critical thinking skills. Survey analysis only provided insights from an external point of view
and much of the data has many possible conclusions.

I will be completing the Masters of Business Administration (MBA) program this December. My goal is
to join the Cirque du Soleil team and to be part of the “talent behind the talent.” In addition to having a
strong business background, I spent five years performing with Florida State University’s Flying High
Circus and have worked as a high and ground rigger for the last two years at the Tallahassee Leon
County Civic Center. Beyond these skills, I have a strong passion for the performing arts. Cirque du
Soleil would greatly benefit from my passion, analytical skills, and intimate understanding of circus.
Both a resume and references are available upon request.


Table of Contents
Executive Summary....................................................................................................................................... 1
Research Overview ....................................................................................................................................... 2
Methodology................................................................................................................................................. 2
Survey Demographics ................................................................................................................................... 2
Entertainment Motivation ............................................................................................................................ 3
Entertainment Market .................................................................................................................................. 5
Current Business Environment ..................................................................................................................... 7
Why People Have Attended a Cirque du Soleil Show ................................................................................... 9
Disney World and Las Vegas ....................................................................................................................... 10
Core Business .............................................................................................................................................. 12
Repeat Guests ............................................................................................................................................. 13
Lifetime Value of Guests ............................................................................................................................. 16
Expansion .................................................................................................................................................... 18
High End Restaurant/Lounge .................................................................................................................. 18
New Permanent Location ....................................................................................................................... 20
Branding and Competition .......................................................................................................................... 22
Why People Have Not Attended a Cirque du Soleil Show .......................................................................... 24
Recommendations ...................................................................................................................................... 27


Executive Summary
The current business environment for Cirque du Soleil appears to be very different from the
surroundings that paved the way for much of the past company success. Guests that have attended a
Cirque du Soleil show, on average, earn and spend more money on entertainment; however, Cirque du
Soleil’s guests report that they have decreased their spending on entertainment more than their
counterparts due to the recent recession. In addition, other external factors may pose a potential risk to
Cirque du Soleil, such as the possibility of a second recession or direct competitors imitating the Cirque
du Soleil business model.

Cirque du Soleil’s CEO and founder, Guy Laliberté said, “We’ve gone through three recessions in Cirque
history, and they were all growth periods for us.” To continue the pattern of recession growth Cirque du
Soleil needs to focus on several key areas. Two of those areas include the 30 year old age segment and
people who are motivated by thrill seeking when pursuing entertainment.

Thrill seekers represent the largest group of repeat guests to attend a Cirque du Soleil show, an
important statistic considering there are numerous substitutes and competitors for Cirque du Soleil.
The largest age group to identify themselves as thrill seekers is 30 year olds. Coincidentally, this is also
the largest age group to visit Las Vegas. Utilizing deal-of-the-day coupons should prove to be an
effective tool to attract 30 year olds to attend their first Cirque du Soleil show. The 30 year old segment
tends to be more familiar with the technology associated with the coupons and represents a group that
would more readily use the coupon specifically for a Cirque du Soleil show.

The survey also indicates that more repeat guests have attended a permanent show as opposed to a
traveling show. For expansion, guests identified New Orleans as a city that would have a strong
potential for success to house a new permanent Cirque du Soleil show. In addition, there are other
avenues for company expansion such as a greater presence in the high-end restaurant or lounge
business. Expanding into a completely new market would require a great deal of planning to achieve a
strategic fit of Cirque du Soleil’s core values but guests who have attended a show indicate a strong
desire to frequent such a restaurant or lounge.

Upon departure, a quarter of the survey respondents could not remember the name of the show they
had seen. Thus, branding, as a facet of marketing, seems to be a very important tool that could be
further utilized. Guests of a traveling show have a stronger tendency to be unable to recall the name of
the show attended. Furthermore, inability to remember the name of the show is characteristic of guests
who never return to see another Cirque du Soleil performance. An equally important issue to address is
why the potential guest did not attend a show in the first place. The data suggests the most common
reason a person has not attended a show is an innate misconception of Cirque du Soleil. Understanding
guests’ motivations and attitudes are crucial to formulating an effective marketing strategy.

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Research Overview
Cirque du Soleil (CDS) is beginning to encounter direct competition in regards to their business model, a
sign of the maturity stage of the product life cycle. In the maturity stage, it becomes increasingly
difficult to grow sales. Thus, a lifestyle study of current and potential guests is crucial. Furthermore, the
development of a guest retention strategy is needed. Identifying key consumer groups and assessing
their attitudes and behaviors can help re-position and brand Cirque du Soleil in an even more attractive
way in order to gain the largest possible market share.

In order to better understand the trends of both current and future Cirque du Soleil guests a cross-
sectional, descriptive study was utilized. Data collection was completed via survey. The survey was
completed by 514 different individuals from all over the United States.

Methodology
Due to personal financial limitations, a non-probability sample was used for the survey. The primary
method of survey distribution was snowballing through email. One of the disadvantages of snowballing
is that extrapolating population preferences from the sample results has some inherent risk. The survey
population is 211,750,000, which represents a rough approximation of the United States’ population
aged 25 and above. Based on a sample size of 514 and a confidence level of 95% the confidence interval
for the survey is 4.32%. Survey construction was completed using the web-based software program
Qualtrics.

Survey Demographics
Prior to analyzing the results of the survey, it is crucial to understand the survey demographics. It is
important to note that the two questions pertaining to income were optional and all of the other survey
questions were required. Several of the demographic categories are more represented than others, but
this is to be expected for any survey; according to Dr. William Smith of San José State University, “More
educated and more affluent people are more likely to participate in surveys than less educated and less
affluent people, women are more likely to participate than men, and white people are more likely to
participate than non-white people.” Below are the survey demographics:

Gender Age Marital Status

Answer Response % Answer Response % Answer Response %
Male 176 34% 20's 128 25% Single 159 31%
Female 338 66% 30's 123 24% Married 305 59%
Total 514 100% 40's 81 16% Separated 4 1%
50's 122 24% Divorced 41 8%
60's 51 10% Widowed 5 1%
70's + 9 2% Total 514 100%
Total 514 100%

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Individual Income Total Household Income

Answer Response % Answer Response %
< $30,000 87 23% < $30,000 41 11%
$30,000-$39,000 45 12% $30,000-$39,000 24 7%
$40,000-$49,000 56 15% $40,000-$49,000 31 9%
$50,000-$59,000 39 10% $50,000-$59,000 23 6%
$60,000-$69,000 39 10% $60,000-$69,000 28 8%
$70,000-$79,000 20 5% $70,000-$79,000 22 6%
$80,000-$89,000 15 4% $80,000-$89,000 26 7%
$90,000-$99,000 14 4% $90,000-$99,000 18 5%
$100,000-150,000 36 10% $100,000-$150,000 82 23%
$150,000 & above 27 10% $150,000 & above 68 19%
Total 378 100% Total 363 100%

Race
Answer Response %
White 445 87%
African American 16 3%
Hispanic 41 8%
Asian or Pacific Islander 9 2%
Native American 3 1%
Total 514 100%

State of Residence
32 of the 50 states were represented in the survey. Florida received the largest representation carrying
66% of total survey responses.

Entertainment Motivation
Beyond simple demographic data a better understanding of motivations for entertainment is helpful
when uncovering the reasons an individual has attended a Cirque du Soleil show. In attempt to capture
entertainment motivation quantitatively, the survey asked the respondent to pick one of three options
as their primary motivation for entertainment. These motivation options were previously identified by
researcher Jason Sit of the University of Southern Queensland. Sit utilized three primary categories for
entertainment motivation in his study. Below are the three motivation options with a simple definition
which were provided in this survey.

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Figure 1

Thrill Seeking Socializing Escapism
• To have fun • To be with people who • To give your mind a
• To have excitement are interested in the rest
• To be amused same things as you • To reduce stress
• To have a great time • To be with people who • To get away from
enjoy the same things as daily duties
you

Survey Responses for Entertainment Motivation

Figure 2

Entertainment Motivation Response %
Escapism 182 35%
Socializing 171 33%
Thrill Seeking 161 31%

The survey responses for entertainment motivation were split relatively evenly among the three
options. However, when comparing the motivations for entertainment to Cirque du Soleil show
attendance, a trend becomes apparent. The biggest entertainment motivation to attend a show is
escapism. This trend would make sense as Cirque du Soleil works hard to develop a unique, chimeric
atmosphere for each show.

Figure 3

38%

36%

Escapism
34%
Socializing
32% Thrill Seeking

30%
Attended CDS Not Attended CDS
Show Show

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Figure 4 breaks down entertainment motivation by age, and Figure 5 shows the dominant motivation in
each age segment. It is important to note that the 30’s age segment displays the highest overall
representation for thrill seeking.

Figure 4

45%

40%

35%
Escapism
30%
Socializing
25%
Thrill Seeking
20%
20's 30's 40's 50's 60's &
Above
Age

Figure 5

Age Dominant Motivation for Entertainment
20’s Socializing
30’s Escapism, but the highest segment for Thrill Seeking
40’s Escapism
50’s Escapism
60’s and Above Socializing

Based on the above figures, the 30’s age segment appears to be of importance. Escapism, the highest
entertainment motivation category of an individual that has attended a Cirque du Soleil show, decreases
by age starting with this segment. While socializing, the highest entertainment motivation category of
an individual that has not attended a Cirque du Soleil show increases by age—also starting at the 30’s
age segment. Understanding motivation for entertainment could prove to be very useful when
formulating a marketing strategy for Cirque du Soleil.

Entertainment Market
In the broadest of terms, Cirque du Soleil competes in what can be described as the “adults who go out”
market. To better understand the competition within this market the survey asked the respondent,
“Which event do you prefer for entertainment purposes?” The figure below shows the responses from
this question.

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Figure 6

Entertainment Event Response %
Sporting Event 199 39%
Theatre Performance 143 28%
Music Concert 100 19%
Comedy Show 50 10%
Magic Show 10 2%
Symphony 10 2%
Opera 2 0%
Total 514 100%

Figure 7

Entertainment Event
50%

40%

30% Attended CDS show

20%
Not attended CDS show
10%
Difference (Attended-Not
0%
attended)
-10%

Based on figures 6 and 7, attending a sporting event was the most popular category for entertainment
events and has the largest negative difference with respect to Cirque du Soleil attendance. Certainly,
large growth potential for Cirque du Soleil lies within the sporting event category. This data supports
the decision Cirque du Soleil made to throw out the first pitch at the Kansas City Royals-San Diego
Padres game on June 27th and the Tampa Bay Rays-Boston Red Sox game on July 17th. Beyond the
positive publicity for Cirque du Soleil, the unique and memorable first pitch ceremonies should prove to
be a successful marketing tool to reach a large untapped demographic.

Below, figure 8 displays entertainment motivation for the four most popular event choices from the
survey.

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Figure 8

Event Type by Entertainment
Motivation
45%

40%

35%
Escapism

30% Socializing
Thrill Seeking
25%
Theatre Sporting Concert Comedy
Performance Event
Event

Sporting events have the lowest percentage of patrons seeking escapism for entertainment. Thus, it
appears other entertainment events may host individuals with a higher predisposition to attend a Cirque
du Soleil show based on entertainment motivation. Individuals from these other events may be more
readily persuaded to attend a Cirque du Soleil show. More thrill seekers attend concerts which, as the
paper later discusses, are a very important segment for Cirque du Soleil. With this in mind, perhaps
Cirque du Soleil could partner with various musicians to provide additional entertainment to concert
guests in a similar manner to the baseball first pitch ceremonies. An ideal musician to partner with
could be Elton John, given that Cirque du Soleil has previously worked with him in composing the
original music score for the new Cirque du Soleil show, Zarkana.

Current Business Environment
The downturn of the economy has adversely impacted the spending trends of Americans. Looking at the
Bloomberg Consumer Confidence Index helps put the American sentiment in context. The most recent
number released as of 8/25/2011 is -47, which is down from the number of -44 a year ago. The current
index number appears to have stabilized near the record low of -54 dating back to January 2009. The
index uses a scale of -100 to +100 and measures people’s willingness to spend. Generally, a low number
suggests a contracting economy due to the decline in individual spending. In addition, economists
surveyed by CNNMoney are raising their recession risk estimates. In August, the CNNMoney survey of
economists found the average chance of a new recession to be about 25%, up from a 15% chance only
three months ago. The main reasons for the increased chance of another recession are the recent slide
and volatility in the U.S. stocks and S&P’s downgrade of the U.S. credit rating.

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With consumer confidence down, discretionary spending on entertainment would likely be adversely
impacted as well. Below, Figure 9 displays how survey respondents spend their money on
entertainment.

Figure 9

Income Spent on
Entertainment
22
22 21
21
20 19
19
% 18 Mean
17
16 Median
15
14
Survey Total Attended Not Attended
CDS Show CDS Show

It is clear from the figure that people who have attended a Cirque du Soleil show spend more money on
entertainment. However, if consumer confidence remains low, then a continued downward shift in
entertainment spending is likely.

Individuals who have attended a Cirque du Soleil show spend a greater percent of disposable income on
entertainment and on average have a higher household income.

Attend CDS Show Not Attend CDS Show
Average Household Income Upper half of $70,000 bracket Upper half of $60,000

Although Cirque du Soleil guests may have a higher household income and spend more money on
entertainment they are not recession proof. In fact, Figure 10 indicates people who have attended a
Cirque du Soleil show agree, on some level, that they are now spending less on entertainment due to
the recent recession than their counterparts who have not attended a show.

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Figure 10

Entertainment Spending
Declined Due to Recession
62% 63%
65% 57%
55%
45% Agree on some level
35% 29% 29% 30%
Disagree on some
25%
level
Survey Total Attended Not
CDS Show Attended
CDS Show

Why People Have Attended a Cirque du Soleil Show
For a better understanding of why an individual has attended a Cirque du Soleil show a multiple
regression analysis was conducted using some of the demographic data along with the following
information:

1. Whether or not the individual has visited Las Vegas or Disney World in the last 15 years
2. Whether the individual’s spending on entertainment has declined due to the recent recession
3. The percentage of income the individual spends on entertainment
4. Entertainment motivation
5. Entertainment event type

The R square of the multiple regression was 0.09, which means the x-variables only explained 9% of
the variance for attending a Cirque du Soleil production. Clearly, other variables impact an
individual’s decision to attend a show, but the survey was not able to capture these variables.
Examples of other variables such as mood or attitude of the individual could prove difficult to
capture quantitatively. Below, figure 11 shows how much each variable contributed towards the
explained variance. The larger the T-score, the more significant the x-variable is for the regression.

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Figure 11

X-Variables Regression T-Score
Coefficient
Entertainment event -0.001439824 0.104928
Decline of entertainment spending due to recession -0.008588127 0.548694
Household income -0.007788088 0.644619
Percent of income spent on entertainment -0.001308934 0.808608
Individual income -0.013108759 1.029792
Marital status -0.043962663 1.217637
Age 0.032253948 1.419954
Entertainment motivation 0.055496287 1.76514
Visited Disney World, last 15 years 0.166914257 2.916201
Visited Las Vegas, last 15 years 0.162973107 3.048874

Important note: Dependent Variable= Yes/No Attend Cirque du Soleil

Figure 11 shows the importance of visiting Las Vegas or Disney World on the consumer’s decision to
attend a Cirque du Soleil show. This should not come as a surprise because between the two locations
there are 8 permanent shows. Entertainment motivation and age, the two variables with the next
highest T-scores, should prove to be more insightful for understanding characteristics of individuals
attending a show. In addition, entertainment motivation and age should help explain why individuals
travel to these locations. Due to this reasoning, entertainment motivation and age will be used
frequently throughout the rest of the paper in cross tabulations.

Disney World and Las Vegas
Disney World and Las Vegas, as noted from the multiple regression analysis, play an important role for
Cirque du Soleil. Figure 12 and 13 show the entertainment motivation and age, respectively, of the
individuals who have visited Las Vegas or Disney World in the last 15 years.

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Figure 12 Figure 13

Entertainment Age
Motivation 30%

37% 25%
36%
35% 20% Visit Las Vegas,
34% Visit Las last 15 years
Vegas, last 15 15%
33%
32% years 10%
31% Visit Disney
30% Visit Disney 5% World, last 15
World, last 15 years
years

There are different primary entertainment motivations when visiting the two locations. The largest
group to have visited Disney World is escapism while the largest group to visit Las Vegas is socializing.

Below are findings relating to Disney World:

• 73% of the survey respondents have visited Disney World at least once in the last 15 years.
• 42% of the survey respondents have visited Disney World more than five times in the last 15
years.
• 79% of the people that have visited Disney World in the last 15 years have also visited
Downtown Disney Marketplace.
• 60% of the people that have visited Downtown Disney in the last 15 years have attended La
Nouba.
• 45% of the Florida residents that have attended a CDS show have not attended La Nouba.
• 47% of Florida residents are unaware that La Nouba is located in Orlando.

There is strong potential for more Florida residents to attend La Nouba if they were made aware of the
show.

Las Vegas is truly an anchor point for Cirque du Soleil as it currently houses seven permanent shows.

• 51% of the survey respondents have visited Las Vegas in the last 15 years.
• 56% of the survey respondents who have visited Las Vegas have visited more than once.

Respondents who had visited Las Vegas were asked to identify themselves as one of the following
categories:

1. Visited Las Vegas strictly for business
2. Visited Las Vegas for business but had time for pleasure as well
3. Visited Las Vegas strictly for pleasure

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Figure 14 breaks down the Las Vegas visitors by category and frequency of visits.

Figure 14

Visit Las Vegas, Last 15
Years
80%
60% Strictly buisness
40%
20% Business but had
0% time for pleasure
One Time More Than Strictly pleasure
Once
# of visits

While most visitors of Las Vegas visit strictly for pleasure, business visitors play an important role as
well.

• There is a 16% increase among “business but had time for pleasure” visitors when visiting Las
Vegas more than once.
• There is a 14% decrease of “strictly pleasure” visitors when visiting Las Vegas more than once.
• Zumanity, with 33% of the survey respondents, has more business visitors attending the show
compared to the other Las Vegas shows.

Core Business
For Cirque du Soleil the shows bring in about 60% of the revenue. Thus, it is apparent that the core
business for Cirque du Soleil is the show itself, but how do the permanent shows differ from the
traveling shows? At the time the survey was distributed there were 10 permanent and 9 traveling
shows. Iris, Zarkana, and Michael Jackson: The Immortal World Tour were not open to the general
public yet. The survey, which only looked at shows in the U.S., attempted to identify which show model
has a greater impact on revenue. Below, figure 15 demonstrates, by percentage, the show model with
the greatest number of repeat guests.

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Figure 15

Attended CDS Show
More Than Once
90%

80%

70%

60%

50%
Permanent Show Traveling Show
Show Type

Figure 15 suggests that permanent shows, with respect to repeat guests, are the core business as more
repeat guests have attended a permanent show. One potential reason for the high number of repeat
guests for permanent shows may be guest satisfaction. Guest satisfaction could be higher for
permanent shows as the venues are built specifically for the show which means rigging and other
transitions are seamless, while traveling shows are not afforded the luxury of seamless transitions.

Another possible reason for more repeat guests of a permanent show could be the result of product
differentiation. Oftentimes, Broadway shows have a touring version of the same show and this could
lead to confusion for Cirque du Soleil guests, particularly the guests of traveling shows. Perhaps, guests
that have attended a permanent show realize that traveling shows are not the same show they have
already attended. However, if a guest has attended a traveling show, they may not attend another
show because they assume that other Cirque du Soleil shows are identical due to the “Broadway”
assumption. Thus, guests of permanent shows have a better understanding of the differentiation
among the shows than guests of traveling shows.

Repeat Guests
Repeat guests are very important as they represent the core customers of Cirque du Soleil. As
previously identified, more repeat guests have seen a permanent show. However, to obtain a further
understanding of some of the characteristics of repeat guests, a multiple regression analysis was
performed. The same variables used in the first regression were used for the repeat guest regression.
Overall, the variance explained by the variables was low as the R square value was .06. However, this is
not surprising as none of the regression variables explain guest satisfaction after attending their first
Cirque du Soleil show. Below, figure 16 shows the T-score for each of the variables. Once again, the
greater the T-score the more significant the x-variable is for the regression.

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Figure 16

Coefficient
Visit Disney World, last 15 years -0.025383267 0.297
Individual income -0.0076763 0.438
Entertainment event 0.011295058 0.623
Spending decline due to recession 0.017418332 0.817
Marital status 0.042634752 0.854
Visit Las Vegas, last 15 years -0.066617802 0.873
Age -0.028982275 0.926
Entertainment motivation 0.046806688 1.088
Total household income 0.037338161 2.207

Important note: Dependent Variable= how many times an individual has attended a Cirque du Soleil
show.

Total household income contributed the most towards the explained variance of the regression. In
order to better understand how the other variables relate to total household income, a correlation was
performed.

Figure 17

Variable Correlation to Household Income
Entertainment motivation 0.008
Visit Disney World, last 15 years 0.017
Entertainment event 0.087
Spending decline due to recession 0.141
Marital status 0.236
Visit Las Vegas, last 15 years 0.313
Age 0.424
Individual income 0.718

Below are several suggestions from the correlation:

• Household income has no relationship with entertainment motivation and entertainment event.
o Suggestion: Individual’s motivation for entertainment and entertainment event is not
influenced by income.
• Household income has no relationship with whether or not the individual has visited Disney
World.
o Suggestion: Household income does not factor into the decision to visit Disney World.
• There is a weak positive relationship between household income and visiting Las Vegas.
o Suggestion: Income may factor into the decision process when deciding to visit Las
Vegas as a greater household income has a greater tendency to visit Las Vegas.

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• There is a weak positive relationship between age and household income.
o Suggestion: The older the individual, the higher the household income.

The correlation between household income and visiting Disney World or Las Vegas is an important
relationship to note. Even though both Disney World and Las Vegas are popular tourist destinations,
there seems to be a different approach when deciding to visit each location.

The regression analysis identified various variables related to repeat guests on an aggregate level, but
looking at repeat guests with respect to one variable should also be insightful. As identified in the first
regression, entertainment motivation is important as it attempts to uncover deeper reasons for seeking
entertainment than demographic data alone. One should look at the entertainment motivations of
repeat guests as it had the second highest T-score in the regression, as well. Below, figure 18 depicts
the various motivations for entertainment with respect to the number of Cirque du Soleil shows
attended.

Figure 18

Attended CDS Show
40%

35%

30% One time
More than once
25%

20%
Escapism Thrill Seeking Socializing

Figure 18 is very important, as several suggestions can be drawn from the data. As noted earlier, more
escapism individuals have attended a Cirque du Soleil show and this holds true for individuals who have
only attended one show, but this is not the case when guests have attended multiple shows. Thrill
seeking, which represents the smallest percentage of one time guests, is the largest category for repeat
guests. This data would suggest that while the original allure to attend a Cirque du Soleil show is the
fantasy world portrayed in the production, it is the thrills of the show that keep the guests coming back
to see another show, as evidenced by the number of thrill seekers who are repeat guests.

Another possible suggestion when referencing figure 4 (which compared entertainment motivation by
age) and figure 18, is marketing to the 20 and 60 plus age groups is not as effective because they are
primarily motivated by socializing when seeking entertainment. While individuals of the 20 and 60 plus
age group may be interested in a Cirque du Soleil show, they are more likely to be a one-time guest. On

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the other hand, marketing to the other age groups (30’s, 40’s and 50’s) is more cost effective based on
their propensity to become a repeat guest.

Figure 19

Difference
More than one time One Time (repeat – one time guests)
Escapism 36% 40% -4%
Thrill Seeking 37% 23% 14%
Socializing 27% 37% -10%

Figure 19 indicates socializing has the largest negative difference for attending a show. For the survey,
socializing was defined as being with other people who are interested or enjoy the same things as you.
Perhaps, to increase the percentage of repeat guests who prefer to socialize, a more enticing group rate
could be offered to guests who have already attended at least one show.

It would be interesting to look at the number of repeat guests for the music themed Cirque du Soleil
shows (Viva Elvis, Love, Michael Jackson: The Immortal World Tour) compared to the other shows since
more thrill seekers, the largest group of repeat guests, prefer to attend concerts than the other
entertainment events (figure 18).

Lifetime Value of Guests
As earlier discussed, repeat guests is an important segment for Cirque du Soleil. Over a lifetime, a
satisfied guest will continually contribute towards company revenue and further reinforce Cirque du
Soleil’s positive reputation. To capture the lifetime value of a guest it is important to reach out to young
individuals who have the highest predisposition to become a repeat guest. As previously identified,
thrill seekers have the highest propensity to become repeat guests, and 30 year olds are the highest
percentage of thrill seekers.

The concept of the deal-of-the-day coupon has taken the internet by storm. Groupon, the leading deal-
of-the-day site was called the “fastest growing company ever” by Forbes magazine. The deal-of-the-day
coupons are popular because they are an effective means of attracting new customers. Figure 20
identifies survey respondents who have used a deal-of-the-day coupon by age.

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Figure 20

Used a Deal-of-the-day
Coupon, by Age
6%
20's
30's
22% 32%
40's
14% 50's
26%
60's & Above

The 30 year olds are the second largest group to have used deal-of-the-day coupons. Figure 21
illustrates which age groups are “very familiar with deal-of-the-day coupons” and “very likely to use a
deal-of-the-day coupon specifically for Cirque du Soleil.” In both categories, the 30 year olds are again
the second highest group only surpassed by the 20 year olds.

Figure 21

Deal-of-the-day Coupons
40%
35%
30%
Very Familiar with
25%
Deal-of-the-day
20% coupons
15%
Very likely use Deal-of-
10%
the-day coupon for
5% CDS
0%
20's 30's 40's 50's 60's &
Above

Figure 21 shows a decline by age until the 50 year old group, at which point there is an increase in both
familiarity and likeliness to use the coupons for Cirque du Soleil. The 50 year old age group also
represents the second highest group to visit Las Vegas (behind 30 year olds).

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Figure 22

Very familiar w/ deal-of- Very likely to use a deal-of- Difference
Age the-day coupons the-day coupon for CDS (Familiar –Use)
20’s 37% 37% 0%
30’s 26% 28% -2%
40’s 14% 9% 5%
50’s 19% 20% -1%
60’s & Above 4% 5% -1%

Based on the percent difference of the two categories the 30 year old age segment has the potential to
have a high conversion rate from coupon familiarity to using the coupons for Cirque du Soleil. This
indicates that these coupons could be successful in capturing a very important age segment.

Expansion
High End Restaurant/Lounge
Cirque du Soleil has recently been marked by company growth as several new shows have opened each
year. Cirque’s president and COO Daniel Lamarre said, “We like to take risks. It’s part of who we are.
Every time we are in a comfort zone, we will find a way to get out, because being comfortable in our
business is very, very dangerous.” In agreement with this statement, Cirque du Soleil could position
itself to move further into other forms of entertainment such as the high end restaurant or lounge
business. Currently, Cirque du Soleil is involved with two lounges in Las Vegas: Revolution and Gold.
Figure 23 illustrates how likely the survey respondents would dine at a high end Cirque du Soleil
restaurant or lounge.

18

Figure 23

Dine at High End CDS
Restaurant or Lounge
40%
30%
20%
10%
Attended CDS show
0%
Not attended CDS show

• 67% of guests who have attended a show would also be likely, at some level, to dine at a Cirque
du Soleil high end restaurant or lounge.
• 56% of guests who have not attended a show would be likely, at some level, to dine at a Cirque
du Soleil high end restaurant or lounge.

Figure 24 graphs the percentage of one time and repeat guests who would likely dine at a Cirque du
Soleil high end restaurant or lounge.

Figure 24

Dine at a High End CDS
40%
30%
20%
10% Attended CDS show once
0%
Attended CDS show more
than once

19


67% of both groups indicate they would likely dine at such a venue on some level. Furthermore, the
repeat guests reflected a slightly higher percentage of patrons who would be very likely to dine at one of
these high end venues, 15% compared to 11%.

Figure 25 graphs an individuals’ likeliness to dine at a high end Cirque du Soleil restaurant or lounge
based on entertainment motivation.

Figure 25

Very Likely Dine at High End CDS
60%
50%
40% Attended CDS show
30%
20% Not attended CDS
10% show
Escapism Socializing Thrill Seeking

Additionally, the lounge or restaurant could be an effective means of reaching an audience that is
unfamiliar with Cirque du Soleil. Based on Figure 25, thrill seekers would be very likely to dine at a
Cirque du Soleil restaurant or lounge regardless if they have attended a show. Thrill seekers are initially
more reluctant to attend a Cirque du Soleil show (Figure 18). Introducing this population to the Cirque
du Soleil brand through a restaurant/lounge is a viable promotional option.

One option to consider is placing the restaurants or lounges in locations that do not have permanent
shows. The Gold and Revolution lounges are primarily used to compliment the respective Cirque du
Soleil shows in Las Vegas, and having a lounge in another location could increase Cirque du Soleil
awareness of a segment that otherwise would not be enticed to attend a show.

New Permanent Location
Already identified as the core business, permanent shows represent a way to continually expand Cirque
du Soleil. Cirque du Soleil is currently looking for a location in England for a new permanent site.
However, in the midst of the global economic downturn, the British economy is weaker than the United
States’ based on the most recent GDP reports. The second quarter 2011 GDP numbers for the United
States and Britain were 1.28% and 0.8%, respectively. Considering the United States appears to house
greater economic potential for a permanent show, the survey attempted to identify the most promising
location in the U.S.

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Based on tourism numbers, five cities were selected for survey respondents to rank as the city they
would most likely visit to attend a new permanent Cirque du Soleil show. Only guests who have already
attended a show were asked this question. Below are the five cities:

1. Chicago
2. Miami
3. New Orleans
4. New York City
5. San Francisco

On June 29th New York City hosted a brand new show, Zarkana, in the Radio City Music Hall, but
currently the show is only seasonal so the survey still listed New York City as an option for a full time
permanent location.

Figure 26 shows the results for each city using a weighted point system.

Figure 26

Percent
st nd rd th th
1 2 3 4 5 Weighted point system Total of
(Place Points leader
votes) points
New Orleans 85 77 44 55 39 (85*5)+(77*4)+(44*3)+(55*2)+39 1,014 100%
New York 85 82 25 44 14 930 92%
City (85*5)+(82*4)+(25*3)+(44*2)+14
Miami 65 60 34 58 83 (65*5)+(60*4)+(34*3)+(58*2)+83 866 85%
Chicago 37 46 89 79 49 (37*5)+(46*4)+(89*3)+(79*2)+49 843 83%
San Francisco 28 35 58 64 115 28*5)+(35*4)+(58*3)+(64*2)+115 697 69%

It is clear that Cirque du Soleil wants to have a full time permanent show in New York City based on CEO
Guy Laliberté’s quote, “We want something solid and permanent in the entertainment capital of the
world, and we are hoping to have a presence in New York for 12 months a year.” However New Orleans,
based on this survey, also appears to have strong potential for a permanent Cirque du Soleil presence.
Cirque du Soleil’s ability to reinvent the brand with each new production, combined with New Orleans’
uniquely rich culture and history, would seem to lend itself well to a permanent show. It is important to
note that the majority of survey respondents are from the Southeast, which could have affected the
outcome for city selection.

Figure 27 illustrates which city received the most first place votes by entertainment motivation.

21


Figure 27

1st Place Votes by
35%

25%
Thrill Seeking
15%
Escapism
5% Socializing
New New York Chicago Miami San
Orleans City Francisco
City

Based on figures 18 and 27, New Orleans could have the highest number of first-time Cirque du Soleil
guests and a high number of repeat guests. This furthers the suggestion that New Orleans has strong
potential to host a permanent Cirque du Soleil show. In addition:

• Louisiana is a “Right to Work” state, while California, Illinois, and New York are “Forced-
Unionism” states.
• Louisiana is a leader in offering tax incentive programs to the entertainment industry.
o The State Department of Economic Development for Louisiana is offering the nation’s
first tax credits to concert and theatrical productions (35%), which will ultimately reduce
production costs.
• New Orleans has the lowest cost of living as compared to the other five cities:
o New Orleans 97
o Miami 108
o Chicago 115
o San Francisco 164
o New York City 218

According to Kilpinger’s Personal Finance, 100 is the national average for the cost of living index.

Branding and Competition
Unfortunately, a different business environment is on the horizon for Cirque du Soleil than the
environment that paved the way for much of the company’s success. A major reason for the difference
is the increased competition. Cirque du Soleil has lost much of its uniqueness as many similar shows are
imitating the business model. Some of the notable imitating competitors are La Rêve and 7 Fingers.

22


Based out of Montreal, like Cirque du Soleil, 7 Fingers currently has 7 shows, all of which combine
artistry and acrobatics. 7 Fingers is gaining national acclaim and it recently had its show Traces featured
on the hit TV show America’s Got Talent. La Rêve’s intimate imitation can be contributed to show
creator Franco Dragon, who also created several Cirque du Soleil shows. Comments on YouTube videos
of La Rêve also show confusion as to whether or not La Rêve is a Cirque du Soleil show. In addition, La
Rêve is located across the street from Mystère and competes directly with Cirque du Soleil on price.
Several individuals cite the reason they did not attend a Cirque du Soleil show was because of the
cheaper ticket price of La Rêve.

The increased competition, along with the downturn of the economy, puts a stark focus on branding for
Cirque du Soleil as it is both imperative to retain current guests and to ensure new ones. Jessica Berlin,
a social media manager for Cirque du Soleil said, “Our fans are an extension of our brand.” However, if a
Cirque du Soleil guest does not remember the name of the show they attended, the guest is unlikely to
attend another show. 25% of survey respondents do not remember the name of the show they
attended. Figures 28 and 29 compare the number of repeat guests to whether or not they remembered
the name of the show attended.

Figure 28 Figure 29

Remember the Name Do Not Remember the
of the Show Name of the Show
Attended CDS Attended CDS
show once show once
31% 33%

Attended CDS Attended CDS
69% 67%
show more show more
than once than once

Based on the above figures, more repeat guests remember the names of the shows attended. A goal for
company branding should involve having more guests identify and remember the name of the shows
attended.

Figure 30 shows which entertainment motivation group is least likely to remember the name of the
Cirque du Soleil show attended.

23

Figure 30

Do Not Remember the Name
of the CDS Show Attended
40%

30%

20%

Escapism represents the entertainment motivation group least likely to remember the name of the
show attended, which parallels the previously mentioned data indicating the escapism group has the
second lowest percentage of repeat guests.

Why People Have Not Attended a Cirque du Soleil Show
To capture future guests it is helpful to identify why people have not attended a Cirque du Soleil show.
The survey asked the respondent to pick the most contributing reason as to why he/she has not
attended a show from the following three options:

1. Lack of interest in Cirque du Soleil
2. Not familiar with Cirque du Soleil
3. Ticket prices and other expenses to see a Cirque du Soleil show are too expensive

Below, figure 31 shows the results.

Figure 31

Reasons For Not Attending a
CDS Show
70% 65%
60%
50%
40%
30% 17% 17%
20%
10%
Lack of Interest Not Familiar w/ Ticket Prices and
CDS Other Expenses
Too Great

24


From figure 31 it is obvious that ticket prices and other expenses are the main deterrent for attending a
show. Prior to this question there were three scale questions asking the following:

1. On a scale of 1-7 (1 being very unfamiliar and 7 very familiar) how familiar are you with Cirque
du Soleil?
2. On a scale of 1-7 (1 being very uninterested and 7 very interested) how interested are you in
attending a Cirque du Soleil show?
3. On a scale of 1-7 (1 being strongly disagree and 7 strongly agree) do you agree it is too
expensive to attend a Cirque du Soleil show?

Using the answers to the scaled questions a multiple regression analysis was performed. The R square
for the regression was 0.317. This means that 31.7% of the variance for not attending a Cirque du Soleil
show is explained by the three options. Figure 32 shows the T-scores for the multiple regression.

Figure 32

Coefficient
Unfamiliar with Cirque du Soleil 0.034132 0.990043
Too expensive 0.207444 5.421467
Not interested in Cirque du Soleil 0.188438 5.61571

Important note: Dependent Variable= reason for not attending a Cirque du Soleil show

Based on the T-scores, the most significant reason as to why someone has not attended a Cirque du
Soleil show is not ticket prices but not being interested in attending a show. After the respondent
identified a reason for having not attended a show, he/she was exposed to Cirque du Soleil in the survey
through a short video trailer of Totem. After the video trailer the respondents were required to give
their impressions of Cirque du Soleil in a short, free-written response. Below are several of the
responses from respondents who identified themselves as not interested in Cirque du Soleil.

• “Interesting. Not what I pictured when I thought of Cirque du Soleil.”
• “Very spectacular”
• “It looks very interesting and fun. I'm intrigued by the ways that the human body can perform
and act as art.”
• “Interesting. Thought it was more of an old time circus, but this might be fun to go see.”
• “Very unique mix of storyline, acrobatics and costumes.”
• “Looks cool”
• “It looks like fun and entertaining”
• “Interesting”
• “Exciting”
• “Very colorful and exciting”
• “Very enlightening and entertaining”
• “Unique, athletic, magical”

25


• “Concept performances. The performances look to be very exciting and would be fun to see in
person. “
• “Well performed, great entertainment, huge talent, visual excellence”

After reviewing the free-written responses, it appears that some of the “non-interested” respondents
enjoyed the video clip. Perhaps the lack of attendance does not reflect a lack of interest but rather an
inaccurate notion of Cirque du Soleil. If more people were to be exposed to Cirque du Soleil, then
perhaps more people would be interested in attending a show. If attendance levels for a permanent
show were to drop below a pre-determined level over time, an increase in media marketing may keep
show attendance high even with intense competition and economic downturn.

Figure 33 identifies individuals who cited a lack of interest to attend a Cirque du Soleil show by
entertainment motivation. Thrill seeking is one of the highest groups to express a lack of interest
regarding Cirque du Soleil. This further perpetuates the idea that a lack of understanding of the true
essence of Cirque du Soleil is a large barrier to attracting first time guests. Exposing thrill seekers to the
thrills and excitement of a Cirque du Soleil show should be an effective marketing strategy.

Figure 33

Lack of Interest to Attend
CDS Show
35%

30%

25%

26


Recommendations
It is not possible for Cirque du Soleil to appeal to everyone. With this in mind, Cirque du Soleil should
only target the various segments that have the highest predisposition to attend a show. Based on the
survey data, Cirque du Soleil should refrain from targeting the 20 year old and 60 plus age segments.
This strategy would not only increase marketing returns but also increase all business metrics.

It is recommended that Cirque du Soleil utilizes deal-of-the-day coupons but in a strategic fashion.
These coupons are loss leaders and should target individuals who have a strong chance of becoming a
repeat guest and would otherwise not attend the show. Based on the data, 30 year olds should be the
target of the deal-of-the-day coupons.

From an outside perspective, it appears that Cirque du Soleil has traditionally relied on word of mouth
as a primary means of marketing. The biggest advantage for using word of mouth advertising is cost
effectiveness, but it has many downsides. It can be challenging to accurately portray a consistent
message regarding the brand when relying on word of mouth, as evidenced by survey respondents prior
to being exposed to a short clip of Totem. Expanding an effective marketing campaign for Cirque du
Soleil during an economic downturn could prove to pay off in the long run.

Ticket prices will always be a deterrent to attend a show. Other than strategically utilizing the deal-of-
the-day coupons Cirque du Soleil should not drop ticket prices to attract a larger market share. Instead,
Cirque du Soleil should rely on carefully crafting a marketing strategy to overcome other objections for
not attending a show, such as misconceived perceptions about the show.

It is also recommended that Cirque du Soleil looks into the possibility of utilizing New Orleans as a
location for a new permanent show. For example, Zed could be re-branded as a new show located in
New Orleans as it is coming to a close in Japan at the end of this year. However, Cirque du Soleil needs
to be mindful of over expansion as an over leveraging of resources during a contracting global economy
has significant risks.

27

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