1 NY Lottery Instant Cash Games (ICGs) Nittany Marketing Consulting Bela Florenthal Kirsten Grasshoff Lisa Laguna.

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NY Lottery Instant Cash Games (ICGs)

Nittany Marketing Consulting Bela Florenthal

Kirsten Grasshoff

Lisa Laguna

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NY Lottery ~ ICGs

• Industry Analysis

• Organizational Assessment

• Marketing Engineering Analysis

• Recommendations

• Conclusions

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NY Lottery ~ ICGs

While online lottery sales are decreasing nationwide, instant game sales are increasing dramatically.

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NY Lottery ~ ICGs

• Industry Analysis

• Organizational Assessment

• Marketing Engineering Analysis

• Recommendations

• Conclusions

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Interesting Lottery Facts• ICGs were the game of choice in 1999 (over

Lotto, Daily Numbers, Keno).

• ICGs averaged $78 per capita play in lottery states and $21 in non-lottery states in 1998.

• 20/80 rule ($1,619 or more per capita)

• Research is radically mixed as to whether income and education are positively or negatively correlated with lottery play

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NY Lottery ~ ICGs

• Industry Analysis

• Organizational Assessment

• Marketing Engineering Analysis

• Recommendations

• Conclusions

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SWOT AnalysisStrengths

•NY Lottery Brand Name

•Large/strong distribution network

•Large portfolio of games

•Strong awareness of ICGs

Weaknesses

•Lack of marketing research

•Limited Product Offering:

–Lack multi-state/multi-channel games

–Lack active games

•No strategic advertising methodology

•Weak Website promotion

Opportunities

•Expand product offerings:

–Multi-channel gaming

–Internet and email promotions

–Multi-state games (PowerBall, BigGame)

•Expand reach:

–NJ commuters

–Tourists

Threats

•Multi-state games

•Online “gambling”

•Government intervention in advertising

•Bad PR surrounding LOT scholarship program

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Marketing Mix

Product

What type of ICG should we offer?- Passive (traditional)

- Active (probability)

- Multi-state

- Multi-channel

Place

Where should we sell the product?- additional research is needed

Price

What type price/payoffs should we offer?

- $1

- $1 plus options to upgrade

- Multi-dollar?

Promotion

What channels should we utilize?

- additional research is needed

What attributes should we emphasize?– fun of gaming

– risk and adventure

– what you could do with the money

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NY Lottery ~ ICGs

• Industry Analysis

• Organizational Assessment

• Marketing Engineering Analysis

• Recommendations

• Conclusions

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Segmentation & Targeting Analysis:

• Segmentation– Attitude towards playing ICG– Psychographics– Aspirations– General Interests

• Targeting – Most profitable segments

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Data Analysis • Factor analysis• Regression analysis • Answer the following questions:

– Which segments should NY Lottery target

– A layered understanding of key segments aspirations, opinions and interests

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Predicted Model

purchaseattitudeaspirationspsychographicsgeneral

interests

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Model ~ Attitude Purchase Relationship

purchaseICG loversaspirationspsychogeneral

interests Anti-Gaming

+

-

Lo-Risk Gamblers

Hi-Risk Gamblers

?

?

Attitudes

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Attitude Factors• 1 ~ ICG Lovers

– More fun then other lottery games

– Playing is exciting– Entertainment for your money– Will win one day– Never get bored

• 2 ~ Anti-Gaming– Throw money away– Silly game– Immoral

• 3 ~ Low Risk Gamblers– People play for risk– Chance to change life– Special trip to store– Selection part of fun– Makes day better

• 4 ~ Hi Risk Gamblers– Everyone has the same chance to

win– Low risk way of gaming– Can’t win enough

=.73

=.69

=.69

=.48

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Model ~ Aspiration Attitude Relationship

purchase

Lo-Risk Gamblers

Luxury Desires ICG lovers

Attitudes

Family Needs

Aspirations

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Aspiration Factors• 1 ~ Luxury Desires

– Own dream car– Own a large house– Own a yacht– Star in a movie– Spend an evening with a celebrity

• 2 ~ Family Needs– Put children through college– Ensure financial security – Eliminate debt– Spend time with family

• 3 ~ Self Needs– To retire early

– To own a home

– To travel

• 4 ~ Intrinsic Motivation– To go back to school

– Work for charity

– Pursue a hobby full time

=.83=.56

=.40=.51

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Psychographic, General Interests & Aspiration

Self-Motivated

Middle American

Success Oriented

Discontent

Psychographics

Traditional

Outdoor

General Interests

Luxury Desires

Family Needs

Aspirations

Purchase

Lo- Risk

ICG lovers

Attitudes

Sophisticated

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Psychographic Factors• 1 ~ Discontent

– Can’t get ahead financially– Want to change my life– My life is out of control– Money should be spent– Live life in the moment

• 2 ~ Success Oriented– I hate to lose– Like to see results immediately– Like to be considered a leader– Impulse buyer– Get bored easily

• 3 ~ Self - Motivated– Things will go well in the future– I like to do challenging things– I do lots of interesting things– I like to take risks– I want to understand my inner-self

• 4 ~ Middle Americans– My family is my life– It is important to be patriotic– Check and compare prices– Prefer a quite secure life

=.66=.57

=.47=.64

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General Interest Factors• 1 ~ At Home

– Gardening– Cooking– Home Improvement– Knitting & Sewing

• 2 ~ Outdoor – Playing Sports– Boating or Sailing– Hiking and Camping– Hunting and Fishing– Exercise and Health

• 3 ~ Sophisticated– Travel– Reading– Theater– Visit Museums

• 4 ~ Traditional– Collecting coins and stamps– Playing board and word games– Reading horoscope– Cars

=.63 =.69

=.68=.66

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Analysis Summary

• Target Segments =Hard Working New Yorkers w/ Big Dreams– They want financial security, more for their

kids and time with the family– They dream about living big, big cars, big

homes, big boats– They play for the fun of it and in hopes of

fulfilling these dreams

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NY Lottery ~ ICGs

• Industry Analysis

• Organizational Assessment

• Marketing Engineering Analysis

• Recommendations

• Conclusions

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Develop a Marketing Planproduct & price

• People play for the fun

• They enjoy imagining the dream becoming a reality

• They enjoy selecting among the products

• They are not heavy gamblers

• They do want to see results and do want to win

• Offer a variety of games,

• Frequently change offering

• Offer very small chances of winning big

• Offer big chances of winning small

• Multiple chance tickets

• Price of ticket should range from $1 to $3

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Develop an Advertising Plan

• Understanding from Factor and Regression Analysis

• Ad-Cad Recommendations

Input

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AdCad Results

• Benefit– Enjoyment

• Benefit presentation– Extremely positive

• Information Strategy– One sided message

• Format– Fantasy, exaggeration

or surrealism

• Emotion in Ad– Positive emotions

– Strong emotions

• Presentation technique– Close up of brand

– Large ad

– Color illustration

– Imagery

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NY LOTTERY INSTANT CASH GAMES, IMAGINE!

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Insert your family here

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A CHANCE FOR MORE

Winning big with NY ICG changed our lives. We both still work but now we have enough money put away that Danny can go to any college he wants. And enough time for family vacations.

Life is good.

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NY Lottery ~ ICGs

• Industry Analysis

• Organizational Assessment

• Marketing Engineering Analysis

• Recommendations

• Conclusions

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– Two key groups should be targeted• These groups are similar in terms of aspirations,

psychographics and general interests• These two groups can be reached via a similar

marketing campaign• Needs to be implemented in accord with legal and

moral standards

– Further research needed to address• Optimal media channels• Optimal distribution channels• Extent of product variety

Conclusions

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Questions?

Thank You

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Model ~ Aspiration Attitude Relationship

purchase

ICG lovers

Luxury Desires Lo-Risk

Attitudes

Family Needs

Aspirations

Self-Motivated

Middle American

Success Oriented

Discontent

Psychographics

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General Interest, Psychographic Relationship

Self-Motivated

Middle American

Success Oriented

Psychographics

Sophisticated

Traditional

Outdoor

At Home

General Interests

Family

Needs

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Lottery Financial Summary

2000 1999

Montana 5,840,985 7,177,635

NY (000) $1,365,143 $1,413,329

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Lottery Trends• Blurring of the two types of traditional

games into new breeds– Multi-state/multi-channel games (PowerBall)– Probability games– Games w/ options to upgrade

• Americans are looking for digital lottery entertainment

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Industry Promotion TrendsDesign• Motivate non-players to

play

• Encourage players to play more often/more types of games

• Encourage lapsed players to start playing again

• Influence public opinion about lotteries in general

Channels•Television

•Radio

•Billboards

•Point-of-sale

•Internet

Themes• Size-of-the-prize (tied for

most common)

• Fun and excitement of playing (tied for most commonly used)

• Winner awareness