Casino Marketing Mix and Pricing
Every facet of gaming is undergoing tremendous growth.
For tangible products, the marketing mix is composed of the '4 Ps': product, price, promotion, and place (distribution).
It is called the marketing mix because these elements are blended to make a marketing offer to the customer.
For example, Caesars Place targets an upscale market.
Its product includes luxurious suites, a large, well-maintained casino, excellent restaurants, and well-trained employees. It charges more for its hotel rooms than most casinos, and its table minimums are higher than some.
However, Caesars know its customers will be to pay these higher prices, because they value the product. Therefore, the casino advertises in magazines targeted toward the upscale traveler and also targets the international customer.
The distribution effort of this organization includes hosts and branch offices. It has put together a marketing mix that is effective for its market. Conversely, The Eldorado in Henderson, Nevada, does not have rooms. It offers breakfast specials for 99 cents, $2-minimum bet tables, and plenty of 5-cent slot machines.
The promotional efforts are directed at the Henderson market. It, too, has put together a marketing mix that is effective for its market.
On the other hand, pricing is a complex issue in casinos.
Simply defined, price is the amount of money charged for a good or service, but more broadly it is the sum of the values consumers exchange for the benefits of having or using the product or service.
Some casinos charge low prices for these products to lure the player in; typically these casinos are trying to attract price-sensitive local and regional markets.
Casinos provide complimentary food and beverage to premium players. These players will 'pay' for these comps out of the casino's theoretical win from their play.
Another form of price is the payout rate of the slot machines. The lower the payout rate, the higher the price. Frequent players get a feel for the payout rate avoid casinos with low payouts.
The number of times a player can multiply his his or her original bet in Craps when placing an odds bet is another form of pricing.
Some casinos limit these to three times the initial bet, while others advertise ten times odds. The odds bet is not a money maker for the casino, but casinos offering ten times odds hope to draw players in and make their money on their other bets.
The minimum bet is another pricing technique.
The table minimum is the price a player has to pay. Some casinos use low table limits to attract customers. When developing pricing strategies, the casino must be concerned with its target market.
How price-sensitive that market is and what creates value for it are additional considerations. Pricing is more effective when management understands the target market. Say, some people will avoid paying $1 video poker, but will play the quarter machines, putting five quarters in each time to get the maximum payout.
Another consideration with pricing is the casino's image.
Some players relate price to the quality of the product. Thus, if they see a casino resort advertising rooms for 419, they may feel that the quality of the rooms is low.
Pricing in the casino industry is a complex issue, one that must be carefully thought out with the target markets in mind.
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