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Harrah's Entertainment Inc Case Solution

Solution Id Length Case Author Case Publisher
753 1401 Words (5 Pages) Rajiv Lal and Patricia Martone Carrolo Harvard Business School : 502011
This solution includes: A Word File A Word File

Harrah, a prominent name in the gambling industry, is seeking for new initiatives in order to attract and retain customers. The main focus of the company is on the database management program which will consolidate the information of customers and make a profile of each individual in order to track their preferences. Harrah has to implement additional strategies with the one mentioned above to gain competitive advantage in the industry. The importance of realization of ‘Clients worth’ has been discussed in order to highlight the major role it plays in the success of a business. The overall marketing recipe results in more profitability than the DBM alone, and hence, the company applies marketing strategies keeping in consideration the long term view of business management. In addition to the longevity of the strategies and policies, Harrah’s faces some ethical and privacy issues which are in need to be handled accordingly.

Following questions are answered in this case study solution:

  1. What are the objectives of the various database marketing (DBM) programs and are they working?

  2. Why is it important to use “customer worth” in the DBM efforts rather than the observed level of play?

  3. How does Harrah’s integrate the various elements of its marketing strategy to deliver more than the results of DBM?

  4. What is the sustainability of Harrah’s actions and strategy?    

  5. What are the privacy and ethical issues that Harrah’s should be concerned about?

Harrah s Entertainment Inc Case Analysis

1. What are the objectives of the various database marketing (DBM) programs and are they working?

When its rivals entered new showcases with preferences of improvement throughout the era of 1990s, Harrah's topped the business development. Be that as it may, the organization rather decided to make utilization of an existing preference i.e. client steadfastness, rather endeavoring to make new assets.

A showcasing database holds data about distinct clients or potential clients that are pertinent to the advertising process. Database marketing is a significant instrument to advance client relationship and increment the unwaveringness. To reinforce the devotion competency, Harrah’s management was required to process complex database investigation of client profiles, so the organization could advertise the right clients with right routes, keeping in mind the end goal to draw in rehashed visits and hold the faithfulness. Harrah's utilized the information base to advance the client relationship and fortify the faithfulness through the following programs

  • New business program

  • Unwaveringness program

  • Retention/Maintenance program

An alternate target of DBM is to foresee shopper conduct and "client worth". Client profiles furnish data about clients' play inclination, wagering examples, how frequently customers visit, the extent they play, and so on. In the wake of recovering itemized data from each client, Harrah's could anticipate potential client playing conduct whatsoever of its lands through quantitative models. After the models recognized some chance based client fragments for justified reinvestment, Harrah's sent modified motivations to these clients, looking for associations with them dependent upon their predicted worth, instead of the experiences.

One more paramount goal of DBM is to follow clients over the long haul and apply some "promotion trials", with the goal that Harrah's can uncover the right advertising measure, for the appropriate conduct adjustment, for the appropriate client. The company estimated that 82 percent of the revenues of Harrah’s entertainment are the result of the game play of only 26 percent of customers. The yearly spending done by these customers were close to $2000 which meant that these were the customers to be targeted by the company.

2. Why is it important to use “customer worth” in the DBM efforts rather than the observed level of play?

Client worth (hypothetical win) is the hypothetical sum the house hopes to win. Provided that DBM exertions concentrate on client worth as opposed to watched play, Harrah's can use more customers with potential of high profit. The point when speculation is focused on guests with high watched recurrence, the business might be contracted down, in light of the fact that in a high watched recurrence market, there are just a predetermined number of clients with high worth to chip away at.  In an exceptionally focused betting market, finding and working on a predetermined number of clients is troublesome. Provided that Harrah's can find and abuse a few clients with high worth in the low watched recurrence market where less rivalry exists, the business will have incredible potential to flourish. The company has advanced its own particular quantitative model to foresee "client worth". The expectation demonstrate aides Harrah's endeavor more worth from a vast client base and likewise gives an improved administration for clients. Harrah's deciphered client fragments by separating clients. In this way, modified offers focusing on distinctive sections were conveyed. These offers strive for clients' future worth by changing over contenders' clients to Harrah's clients, holding current clients, expanding visit recurrence and quality, or reinvigorating clients. Clients were extremely receptive to offers and considered them important to their particular needs.

In general, play observation just demonstrates the past client movement, which holds very less importance for long term business of the company. Just the expectation of "client worth" can serve the organization's best investment, and all the more critically the altered offer dependent upon forecast fulfills clients' particular needs. Just a fulfilled client can be a confirmed profitable customer of the company.

3. How does Harrah’s integrate the various elements of its marketing strategy to deliver more than the results of DBM?

Harrah's client driven advertising concentrated on three main stages: new business, reliability, and maintenance. In the first project, company made utilization of the effects of DBM to foresee client worth and make more adequate speculation at the client level. For instance, in an examination, the management furnishes clients with specific offers to bring them over from a different club. After information exchanges, every month had 15% clients returning in first three months. Similarly, the loyalty scheme offered clients motivating forces to visit its lands all the more as often as possible. This system fortified clients to switch more treks from contenders to Harrah's. The retention scheme examined the declining support of a few clients and delivered them coupon motivating forces, with a specific end goal to animate associations with their clients. Case in point, when Harrah's saw a critical decline of client visit in the second 50% of 1998, it conveyed motivators in January 1999, visits and client using recently knock up once more (see Appendix C Figure 2 and 3). The individuals who returned were put into the dedication program for upside potential investigation. The three projects mix with one another to fulfill clients and accomplish maintainable promoting objective.

Harrah's entertainment likewise marked itself with "the feeling of richness". This marking methodology evaded its weakness of having minimal significant mark separation, and pulled in individuals to come to Harrah's for the amusement of money related break. Moreover, Harrah's attempted incredible endeavors to enhance administration quality and earned a notoriety of "best administration". Total Rewards system made some passionate association with clients, on the grounds that they accept Harrah's knew them, compensated them, and fulfilled their particular needs. The system had an effect on play union dependent upon the hypothetical worth.

4. What is the sustainability of Harrah’s actions and strategy?       

The company has been in a phase of experimentation and examining the best way to market itself as the best customer care casino in the industry. The programs started by Harrah’s are designed in a way that they ensure long term targets to be achieved by the company. Hurrah’s can effectively maintain a sustainable level of client loyalty through the initiated programs. It has marked its name in the industry by achieving a competitive advantage over the other players in the market. The management made its program unique and effective as compared to the marketing plans of other casinos. A strong platform was the target through which the company could make future plans in a steady and effective way. Strategically, the programs initiated by the management of Harrah’s have significant sustainability and actions are in accordance with the strategies through marketing consolidation.

5. What are the privacy and ethical issues that Harrah’s should be concerned about?

There are many concerns related to ethics and privacy which should be the reason of concern for the company’s management. Most importantly, gambling is considered to be an unethical practice by a majority of the society. By encouraging customers to gamble more and more, they can result in making the customer addicted to the game in a negative way. Secondly, the tracking system of company maintains a portfolio of the customer based on his date of birth and personal information. This can result in a privacy invasion issue as the company can share the personal details with lending companies and credit card institutions.

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