1. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Chapter 6 CONSUMER BEHAVIOR Tanya MacLaurin, University of Guelph Kathryn Hashimoto, East Carolina University

2. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Consumer Behavior Introduction The study of why, who, what, where, and how people make purchase decisions. Explores external influences that persuade one to look for products and services. Studies how these are internally processed. Looks at consumer decision process; examines how people make their final decision to buy.

3. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. The How: Consumer Behavior Theory Psychological Core: External & Internal Inputs External forces: forces a person cannot control: Culture Social environment Economy Legal The Process of Decision Making Four stages of the consumer decision process: Problem recognition Information search Decision-making Post-purchase evaluation

4. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. The Why: Perspectives on Gambling Motivation Majority of consumer behavior research in the casino gambling field is based on the study of five subdisciplines: Economics Sociology Psychoanalytic theory Psychology Interdisciplinary nature of work and play

5. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Economics Rational person would not choose to gamble knowing they are likely to lose. Theory of conspicuous consumption: Gambling was a sign of wealth. Affluent classes gamble to demonstrate social standing. Theory of personality traits: Those who avoid risk would not gamble. Rational people will gamble if they place a high enough value on the chance of achieving wealth. One realizes true probabilities, but wants the rewards enough to risk losing.

6. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sociology Study of social rules and processes that bind and separate people as individuals and groups. Theories suggest participants receive temporary satisfaction unavailable in work environments. People who are not successful at their jobs could be winners; gambling as a surrogate for risk. Psychoanalytic Theory General term for psychiatric model that can be applied to the study of gambling.

7. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Psychology The study of behavior, mind and thought Some theories are: Life is boring; excitement of the game confirms one is alive People want to win Straight greed Attribution theory suggests that people attribute their success to themselves Interdisciplinary Study of Play & Leisure Integrates concepts across different disciplines Understanding needs, wants, motivations of casino patrons and non-patrons; essential for continued growth and success of industry

8. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. “Who”: Player Demographics No single demographic, psychographic profile, or socioeconomic group. A relationship appears to exist between income, financial security, and the number of visits and spending at the casino. Types Recreational gamblers view gambling as leisure pursuit. Occupational gamblers believe their skills enable them to make money by gambling. Compulsive gamblers are likely live for gambling, continuing to gamble obsessively even as losses mount.

9. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lifestyle – Psychographics Describes personality, lifestyle, values, attitudes. Casino gamblers tend to be more connected to community groups: Volunteer Fraternal Union Political Casino gamblers: Utilize a variety of financial investment products Are relatively comfortable with their financial standing Have a greater inclination to save and invest

10. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. “What”: Games Slot & video poker are the most popular games. Men prefer table games by a margin of more than two-to-one to women. Blackjack/21 the single most popular table game. Younger adults most likely to play table games. People play keno to pass the time while waiting for a meal or something else to happen.

11. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. “Where”: Places The top two U.S. casino markets in revenue in 2004 – Las Vegas and Atlantic City. Internet-Based Casinos Advances in online technologies have led to a significant increase in their number. 1st developed in 1995 for $1.5 M; employed 17. Rather than diverting funds from other forms of gaming, it draws new players into the market.

12. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Putting It All Together: Factors Used in Decision Making Current market focus Higher-yield upscale gambling market Emphasis on upscale services (designer label shopping, gourmet restaurants) Purchase channel of choice – Internet Younger consumers have propensity for more intellectually challenging casino table games Older gamblers likely to choose slot machines

13. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Hashimoto: Casino Management: A Strategic Approach © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Why do consumers pick one casino over another? Players’ clubs Developed a way of tracking each player so casino can offer comps Service Characteristics that separate it from a durable good: Intangibility – it cannot be packaged and taken home. Inseparability – product cannot be separated from the provider. Inventory – once the visit has occurred, it is over. Inconsistency – the experiences created by the staff become the virtual reality of the experience.