Incorporating Casino Game Preference Market Segment Data Into Marketing Plans LAWRENCE DANDURAND

An understanding of visitor game preference and associated market segment structures may contribute to improved marketing plans and programs. This article presents findings of casino game preferences and correlated structures, and indicates how they may be used in the marketing planning process.

Casino gaming as an alternative form of leisure activity is capturing the imagination of people as never before, and the mecca of casino gaming, at least for the time being, is Las Vegas, Nevada. A scientific study of the Las Vegas market indicates that 96~o of the 12 million visitors to Las Vegas in 1980 engaged in some form of casino gaming (Las Vegas Visitor Profile Study 1980). The gambling-active visitors played on 41,000 slot machines and 2,500 games and tables (Comparative Fiscal Year Report 1980). They dropped an average of $586 per trip on these machines, games, and tables to produce industry-realized net winnings of $1.6 billion. Although individual casino gaming properties have calculated net winnings and market shares for each game, and experimented with optimal game configurations, they have not scientifically identified, described, and targeted those visitors who prefer each game. Furthermore, they have not incorporated the knowledge they do have into their market-

ing planning process. It is recognized that the casino gaming industry has entered a period of intensified competition. Such a situation requires specific, refined, and differentiated marketing plans and programs. It would seem that an understanding of visitor game preferences and associated market segment structures would contribute to improved marketing plans and programs. The purpose of this article is to present scientific findings of casino game preferences and correlated structures and indicate how they could be used in the marketing planning process for casino gaming industries. PROJECT OBJECTIVES The project focused on two primary objectives: (1) presenting the empirical findings regarding game preferences, and (2) demonstrating the use of a casino gaming marketing planning model. The research portion of the project contained the following specific research objectives: (1) to generate a rank order of game preference for the Las Vegas market, (2) to determine the proportion of the market Lawrence Dandurand is Associate Professor of University of Nevada, Las Vegas

Marketing

at the

that prefers each game, (3) to identify the six most preferred casino games, (4) to analyze the market segment structures associated with the top six games, and (5) to describe the behavioral profile associated with the top six games. MARKETING RESEARCH DESIGN

Sample Design The population consisted of the 11.9 million visitors to Las Vegas in 1980. A visitor was defined as a nonresident of Clark County, Nevada, at least 21 years old, and on vacation, on business, or attending a convention. Four thousand visitors were scientifically selected for the study. This study was part of a more comprehensive visitor profile study conducted for the Las Vegas Convention/Visitors Authority. A proportional multi-stratified quota and systematic sampling plan was used in scientifically selecting visitors for the sample. The visitor population was divided into four strata based upon mode of transportation used in departing Las Vegas. These strata were subdivided into substrata based upon geographical location, area of Las Vegas, and various times. Divisions were based upon known characteristics of the Las Vegas market.

macro-

Questionnaire Structure A structured questionnaire was used for the study. It contained direct, non-disguised, structured, and unstructured questions relevant to visitor motivation, atti-

tudes, behavior, and socio-demographics. Terminology and scaling reflected consumer behavior theory, focus group findings, and experience in terms of visitor perceptions and behavior. The questionnaire was originally tested in a pilot study of 200 visitors. Field

Methodology

A self-administered questionnaire was completed by the selected respondent during a personal interview. Selected visitors were interviewed at air, bus, and train

terminals and at hotels and motels. Interviews were conducted for various destinations, locations, quarters,

months, days, hours, and transportation companies. Interviews were conducted continuously during the 15

period from January 1, 1980 to December 31, 1980. Immediately after the respondent had finished filling out

TABLE 1

CASINO GAME PREFERENCE

the form, the interviewers field-edited each questionnaire for completeness, correctness, legitimacy, and

consistency. RESEARCH RESULTS

Casino Game Preference Casino game preference is shown in Table 1, which lists the casino games in descending order of preference. Slot machines are the most popular casino game, and 73% of the Las Vegas visitor market in 1980 preferred either slots or blackjack. The top six casino games in order of preference are slots, blackjack, dice, keno, poker, and roulette. Subsequent analyses examine market segments and behavioral variables across the six preferred games. Market

Segment Size

Table 2 indicates the percentage of each visitor segment that perfers a particular game. The most

apercentages do not total

100% due to rounding Percentages were based on the 3,496 visitors who responded to the question, 504 visitors (13% of the sample) did not respond to the question

TABLE 2 MARKET SEGMENT SIZE

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TABLE 2

(Continued)

MARKET SEGMENT SIZE

popular game with males is blackjack; 38% of the male segment perfers blackjack. Females prefer slots over any other game; 49% of female visitors to Las Vegas prefer to play slots. Other socio-demographic variables contained in Table 2-including transportation mode and quarter variables-can be analyzed in the same manner as above.

Behavioral Profile Structure Table 3 presents behavioral variables analyzed in terms of the visitors who prefer each of the six most popular casino games. For example, 88% of the visitors who prefer dice are repeat visitors. This is disproportionately higher than the 72% of all visitors who are repeat visitors.

TABLE 3

BEHAVORIAL PROFILE STRUCTURE

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TABLE 3

BEHAVIORAL

aThe active average daily expenditures

are

(Continued)

PROFILE

only for those respondents

Dice-prone visitors tend to visit Las Vegas 2.5 times each year-more frequently than other game-prone visitors. Dice-prone visitors also tend to spend more than other visitors for gambling, a room, food and drinks, and ground transportation. Other behavioral variables presented in Table 3 can be analyzed as indicated above.

who

STRUCTURE

actually spent money

in

the respective expense catagones

with the corporate mission statement and planning and control system.

ending with

a

TABLE 4 AN EXAMPLE OF QUESTIONS AND ANSWERS RELEVANT TO MARKET POTENTIAL

CASINO GAMING MARKETING PLANNING MODEL Isolated research findings such as the game preferpresented above do not automatically translate into useful marketing plans. A systematic strategic and operational planning process is needed to integrate specific research findings into the ongoing decisionmaking process of a casino gaming organization. A guide for establishing a systematic planning process is the casino gaming marketing planning model presented in Figure 1. A set of questions and answers/decisions should be generated for each boxed element in the casino gaming marketing planning model. For example, the market potential element in the markets phase at the unit level might contain the questions and answers illustration by the hypothetical data in Table 4. An analysis of Table 4 indicates that the market potential of the San Francisco market for the specific target market and the specific marketing program is 1,200 households (5,000 households x 60% x 40%). Of course, the market potential analysis should be preceded by an analysis in each one of the elements in the casino gaming marketing planning model. Furthermore, the analyses should proceed in a logical manner, beginning ences

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INCORPORATING THE RESEARCH RESULTS The research results of this industry-wide project only be used in the marketing planning process of a specific firm to the extent that the facts answer specific questions posed in the application of the casino gaming marketing planning model. For example, if the only target market descriptors were all families earning more can

FIGURE1

CASINO GAMING MARKETING PLANNING MODELa I.

Corporate

and Divisional

(Organization)

Levels

aSources Koter, Philip (1980) Pnnciples of Marketmg, Englewood Cliffs Prentice-Hall, Inc , Kenn, Roger A and Robert A Peterson ( 1980) Perspecbves on Strategic Marketmg Management, Boston Allyn and Bacon, Inc FIGURE 2 MARKET POTENTIAL

than $40,000 per year that preferred to play blackjack, then the research results would produce the following realized market potential for the > $40,000 blackjack

segment (see Figure 2). The realized market potential would only be a part of a market potential analysis. A firm should also determine the total market potential (unrealized) in its target market given a specific program for a specific time period. The analysis could parallel that discussed above for the expatriate market. It should be noted that a casino game preference approach to market segmentation should only be used if it fits the logic of the rest of the market plan. Other segmentation bases for the grouping of individuals with homogeneous needs might be more relevant and profitable.

SUMMARY AND CONCLUSIONS Of the 12 million visitors to Las Vegas in 1980, engaged in some form of casino gambling. Casino management has not identified, described, and targeted those visitors who prefer each game. Furthermore, decision makers have not incorporated the knowledge they do have into their marketing planning process. The project described here focused on presenting empirical findings regarding game preferences and demonstrating their use in the application of a casino gaming marketing planning model. 96%

REFERENCES

, State Gaming — FY 1980 Comparative Fiscal Year Report Control Board, Carson City, Nevada. Las Vegas Visitor Profile Study — 1980, Las Vegas Convention/ Visitors Authonty, Las Vegas, Nevada.

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