Harrah's Essay

Harrah's
Harrah’s
Harrah’s is the famous casino resort in USA that founded by William Fisk Harrah, at Nevada, in 1939. Then in 1942, Harrah’s opened a casino with blackjack, a dice table and 20 slot machines. The company expanded by added more roulette to the card and dice table and began serving liquor in 1946. William Harrah saw an opportunity to expand the business so, he brought a dingy casino on the southern shore of Lake Tahoe in 1955.Later in 1959, he relocated the casino across the highway to create the world’s largest single structure devoted to gambling. Next, Harrah’s constructed the highest building in Reno, a 24-story hotel across the street from his casino. With high growth in Lake Tahoe, he opened an 18-story hotel in Lake
Tahoe in 1973. By 2000, Harrah’s Entertainment Inc. was well known in gambling industry and operate casinos in more markets than other casino company that having 21 casinos in 17 different cities, including operations in five major traditional casino markets; Las Vegas, Lake Tahoe, Laughlin, Reno and Atlantic City. Nowadays, Philip G. Satre is a Chairman and CEO of Harrah’s.
Business Model Focusing on “exuberantly” alive for fulfills the needs of customers as a momentary escape from the problem and pressures of their daily lives. Focusing on “friendly employees” to make better and distinguished services. The main revenue comes from casino business. All supportive relaxing place such as restaurant and hotel are the components for attracting customer to spend more time in casinos.
Strategies
Early Strategy Later Strategy Growth Strategy Focus on people only that seemed to be working in the early 1990s Harrah could expand the business beyond Nevada and New Jersey that generated explosive growth and highly profitable business. Focus on Customer Relationship management program to retain customers. The company use DBM in order to create program that suit with customer’s behavior.
Problems
1. High Competition : All casinos have same strategy (providing both relaxing facilities and entertainment services)
Park Place Entertainment Corporation with revenue of $2.5 billion Owned 18 casinos and 23,000 hotel rooms
Mirage mainly operated casinos in Las Vegas but had theme parks inResorts Mississippi, New Jersey and Argentina (targeting the upper-middle and premium segment of the customers in the gaming market) With revenue of $ 1.52 billion
Circus Enterprises, Inc.
• With revenue of $1.47 billion Owned 10 casino resorts and 20,000 hotel rooms
Trump Hotel & Casino Resorts • such as Trump Plaza, Taj Mahal and Trump Marina and riverboat casino on Lake Michigan
• With revenue of $1.4 billion
• Providing “ Trump Card” for the gamers to easily register and use their cards at slot machine and table games to earn rewards
The Foxwoods Resorts and Casino run • by Mashantucket Pequot tribe in Connecticut
• With revenue of $1 billion
2.
Low Customer loyalty Old organization structure(Reporting to CEO of each properties which is not encourage customers to spend money at all Harrah’s locations, Decentralization) Low brand awareness Low customer relationships Have no proper training for the employees to deal with their customers.
Solutions
1. Creating customer loyalty Appointed “Gary Loveman” as a COO (Chief Operation Officer) who can implement the marketing strategies throughout the Harrah’s properties. He launched four major initiatives
1. Changing the organization structure
Harrah’s division presidents and subordinate in brand operations, information technology and marketing services have to report to Loveman instead of CEO in order to emphasized that customers belonged to Harrah’s not only one of the
casinos.
2. Building the Harrah’s brand Focusing on the concept of “ exuberantly alive” or the feeling of anticipation and launched advertising around the feeling of exuberance( a momentary escape from the problems and pressures of their daily lives
3. Delivering extraordinary services o Harrah’s was known for having the friendliest employee o Harrah’s provide a variety of intervention at the employee level( in order to encourage employees to provide great services in the environment that most guests end up losing while playing in a casino) For example, Service process design, Rewards and recognitions, Measurement of executives
4. Customer Relationship management o Implementing marketing tools and programs across all Harrah’s properties o Two elements
I. Database Marketing (DBM) is used to track their customers since they used the Total Gold Cards. By tracking their play preferences, betting patterns, where they liked to eat in the casino, where they stayed, how often they visited and how long they played and combining information of basic customer information.
II. The Total Gold Program ; a completely integrated information network that linked all their properties together to motivates customers to consolidate their plays. As the results from DBM, Harrah’s focus on the following programs
• New Business Program: designed to improve the effectiveness in converting new Total Gold members into loyal customers
• Loyalty program-Frequency upside: designed to identify customers and to develop programs that offered incentives for the customers to visit Harrah’s properties more frequently
• Loyalty program-Budget upside: designed to encourage the customers to visit Harrah’s first and capture the majority of the single casino trips( the first stop received the largest share, the second received the second largest and so on)
• Retention program: designed to reinvigorate customers who had broken their historical visitation pattern to other competitors.
The picture shows the connections of the DBM in Harrah’s that they have the card readers on the slot machines and other gaming machines, in every restaurants and other services.
Harrah’s uses decision science tools which known as “Winet” (Winner’s information network) in order to analyze the collected data for the uses of marketing purposesใ
3. The Total Reward Program
The program is designed to encourage customer loyalty or consolidation of play both within a particular trip and across multiple trips or over the course if calendar year. Harrah hope that this program can make customers feel that “I want to go to Harrah’s because they know me and they reward me like they know me and if I went to somewhere else they would not.”
What we have learned Changing the organization structure is essential before applying IT to business. Human resources are one of the important factors in the hospitality business : ( the management has to make sure that all employees are ready to
change) Information technology is the important tools to help business grow up in the highly competitive market. For example Harrah used IT to collect customers’ data (personal info and their behavior) to analyze and create marketing program to encourage customers to go to Harrah and spend more. IT also used to build a relationship with customers and lead to customer loyalty.