The Marketing Function: An Operator's View

Andrew MacDonald 05:29 Feb 21st, 2006 Bonuses

An Operator's view

Casino marketing in the next millennium will require the function to be raised to the second power. Rather than the traditional 4 P's of marketing, product, promotion, price and place, being considered, a need will exist to transcend this paradigm and extend the range of issues considered.

Firstly, consideration will be given to the 3 P's of position. Position. Position. Position. Everyone knows that this is critical to success, yet often it is ignored in the context of the marketing mix. What is the catchment area? What is the demographic of the catchment area? Does the facility and product mix suit the area? Obvious to many, yet how often have these critical factors not been considered when developing a new property and putting forward a prospectus or IPO. The Stratosphere in Las Vegas is an obvious example of where the location of the property and its consequential catchment area were not taken into account in the design of the property or the initial product associated with it. The Cairns Casino in Northern Australia represents another clear example. A $200 million facility developed in tropical far north Queensland to cater to a local population of under 60,000, eco-tourists, backpackers and Japanese honeymooners. An opulent European style casino with dress regulations imposed in Florida style weather conditions where the local "canecutters" dressed in shorts and singlets.

Secondly, more focus must be given to the 3 P's of people. Our staff, our customers and those people who are not yet our customers. Our people we pay. Our people, that play. Other people we'd like to have play, with us, instead of with our competitors. Often marketing seems to focus on the second group without giving proper consideration to the first or third groups. Our people need to be involved in the development of our marketing programs and the products on offer. Too often marketing programs and promotions come down from on high without appropriate consultation with those staff that interact daily with our customers and provide service to them. Concepts, once defined, should be put to focus groups of staff who can critique the mechanics and objectives of the operation. Better still, marketing staff could regularly conduct focus groups with casino staff to brainstorm concepts and have these generated from the bottom up. Ownership comes from involvement, recognition and mutual respect. Many gaming staff would criticise their company's marketing team for not knowing the mechanics of the games or understanding the customer they serve well enough. They develop this view because gaming promotions are often intrusive into the mechanics of the game and don't seem to excite or satisfy the casino's customers. The other group that often seems ignored or placed in the "too hard basket" is the people who are not yet our customers or, worse still, are someone else's customers. Marketing needs to focus on being innovative to bring in the incremental customer. Yes, we need to stay focused on satisfying our existing players and ensure that they don't defect to the opposition, but real growth will come from getting new players in the door.

Thirdly, there are the 5 P's associated with branding. Positioning. Presence. Profile. Performance. Post Analysis. A holistic approach integrates this with the above elements. The positioning chosen needs to consider the catchment area in which the facility operates and the demographic of the target market. The Bellagio clearly has adopted a different positioning than the traditional casino. Articles and advertising in high-end lifestyle magazines such as Vanity Fair and La Mode take the product to the jet set and the rich and famous. Creating a presence and a profile ensures that top of mind awareness is achieved amongst the target market. The performance of these elements needs to be measured and reviewed over time. Often it seems that the balance sheet of the company is the measure that ultimately gets a company to change course, yet regular market research should be an important component in the evaluation of the marketing function. The Stratosphere seemed to want to create a "must see" facility at the wrong end of the famed Las Vegas Strip and in the wrong part of town. On failing to achieve this goal the company totally re-positioned itself to attempt to attract the local, value driven customer. Clearly with this new positioning the value of the Tower itself and the Roller Coaster atop the Tower are greatly diminished. Low limit games, high returns and great value meals have replaced the former offerings. The only problem that now exists for the company is whether or not a value driven, local customer base really exists within the immediate area.

Finally, the most important consideration from any operator on the subject of marketing, is profitability. Ultimately business is about the profitable provision of customer satisfaction. It often would appear to an operator that their marketing executives were sick the day they taught this in Marketing 101. We come up with fantastic marketing programs, advertising campaigns or promotions and fail to put together proformas or post analysis measures to attempt to quantify success or failure. While the creative folks that the marketing function attracts may scoff at this suggestion it does seem that they prefer to lack accountability and rather use anecdotal observations to justify their endeavours.

Thus in the next millennium, the casino marketing function must be taken to a new level. From the 4 P's of marketing to the 16 P's , or raising marketing to the power of 2. Perhaps this simply means, operators learning more about marketing and marketing learning more about operations.