Harrah's Case

1. What are the objectives of the various Database marketing (DBM) programs and are they working? (Try using the numbers provided in the case and exhibits to examine whether these programs are working).

A: The main objective of the various DBM is for companies, such as Harrah’s, to tailor their marketing strategies based on the data collected from each individual customer. Judging by the income statement of Harrah’s, from 1997 to 1999, the Casino revenues rose from $1,338,003,000 to $2,424,237,000, and net income rose from $99,388,000 to $208,470,000. Proven that DBM significantly improved the performance of Casino revenues of Harrah’s.

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

A: The observed level of play only catches limited information at one particular time frame and misses the overall value. That is why using the “customer worth” is important if BDM can successfully attract the right customer with right customer worth, it will enlarge customer spending and generate more individual revenue for the company.

3. How does Harrah’s integrate the various elements of its marketing strategy to deliver more than the results of Database Marketing? (Think of all changes that have been made that bring about an integrative effect).

A: As the Total Gold (Total Reward) could collect all the consumers’ behavior, such as gambling, shopping, eating and logging habits. Harrah utilizes those data and find out the best way to encourage each individual consumer to spend more money on gambling to gain any incentive from the reward program, such as free steak dinner and hotel room upgrade. Furthermore, consumers got spoiled by all the compensations and perks that Harrah’s deliver to the customers through the reward program, even when customers travel from one area to another, they will select Harrah’s as their gambling destination as they know they can enjoy the same special treatment if they can generate more gambling points and get more rewards.

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

A: Gambling is just as competitive like any other industry, all the competitors are watching others how to secure more customers and generate more revenue. For Harrah’s, the success of its DBM help the company to acquire more facilities in all different area, such as in Vegas area, Harrah’s now has Caesar, Planet Hollywood, Bally’s, etc. Especially Caesar, can be seen as the sustainability of Harrah’s strategy, as it combines their previous DBM and