United States

Vegas is Not the Competition

Posted on July 17, 2003

A critical factor in determining the success of a casino operation is to correctly define the competition. By properly delineating one’s competition, a casino can design a facility that best meets the needs of its market, optimize the allocation of precious capital, forestall attempts by competitors to gain an advantage and more prudently spend marketing dollars. One of the single biggest mistakes an Indian casino can do is define Las Vegas as one of its competitors.

Casinos that make the assumption that Las Vegas is part of their competitive mix do so on the flawed hypothesis that, because some of their customers periodically visit Las Vegas, the casino can divert one or two of those visits to their property. While at first blush this reasoning appears sound, a closer examination of customer behavior reveals that this logic is flawed. These casino operators simply do not understand the basic reasons gamblers choose periodically vacation in Las Vegas and the reasons visit Indian casinos with such great frequency.

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Choosing a Competitive Business Strategy

Posted on January 16, 2003

When it comes to identifying an appropriate competitive strategy, casinos are no different than any other business. All businesses compete using one of two basic strategies: they employ a pricing strategy or a differentiation strategy.

Businesses that compete on price strive to offer the lowest possible price. They do so by reducing the costs of production in order to deliver a product or service at a price that is lower
than the competition. This strategy works well for commodities in which the products sold are undifferentiated. Wheat and oil are commodities and producers compete solely on price. Products that are clearly differentiated, through features or other unique elements, can command a higher price.

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Building a Successful Organization

Posted on September 16, 2002

The passage of Proposition lA in 2000 allowed many Indian gaming casinos in California to rapidly grow from small local oriented properties to regional gaming and entertainment destinations. Casinos that were once little more than bingo halls with class n gaming devices quickly became fullservice casinos offering guests a multitude of dining and entertainment options. Most significant to marketers was the addition of sophisticated player tracking systems that allowed Indian casinos to employ database marketing programs and analytical tools that were once only available to non-Native American casinos.

Unfortunately the staffing needs of marketing departments for many of these rapidly growing casinos often did not keep up with these hurried expansions. As such many casinos now find themselves marketing larger properties, promoting multiple dining options, expensive headliner entertainment, hotel, meeting space and greatly expanded gaming operations with virtually the same sized staff that they had prior to this period of growth.

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The Dangers of Marketing Cheap

Posted on June 17, 2002

Native American gaming operations have often looked to Nevada for insights into how to market their casinos. The general belief is that the marketing practices of Nevada casinos are based on sound research and experience, and have demonstrated themselves to be the best way of attracting and retaining qualified gaming prospects.

One of these marketing practices is the concept of attracting garners by discounting food, drinks and room rate to ridiculously low levels. Cheap meals, cheap drinks and low room rates have always been associated with Nevada casinos. The logic behind these practices is that by generating traffic through the property, a certain percentage of those people will stop and gamble. The exact percentage that do stop to gamble or their gaming budgets has never been determined.

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