Sports and Entertainment Marketing Operations Research Event

Cherry Hill East DECA

Cherry Hill High School East

1750 Kresson Road

Cherry Hill, NJ 08003

Ari Scheinthal

Drew Woods

February 26, 2012

Table of Contents

I. EXECUTIVE SUMMARY......................................................................................................................

II. INTRODUCTION...................................................................................................................................

A. Description of the business.......................................................................................................

B. Description of the community...................................................................................................

C. Description of the business’s target market...............................................................................

III. RESEARCH METHODS USED IN THE STUDY.................................................................................

A. Description and rationale of research methodologies selected to conduct the research

study..........................................................................................................................................

B. Process of conducting the selected research method(s)............................................................

IV. FINDINGS AND CONCLUSIONS OF THE STUDY...........................................................................

A. Findings of the research study...................................................................................................

B. Conclusions based on the findings............................................................................................

V. PROPOSED STRATEGIC PLAN...........................................................................................................

A. Goals/objectives and rationale..................................................................................................

B. Proposed activities and timelines..............................................................................................

C. Proposed budget........................................................................................................................

D. Proposed metrics.......................................................................................................................

VI. BIBLIOGRAPHY....................................................................................................................................

VII. APPENDIX..............................................................................................................................................

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I. Executive Summary

A successful and effective loyalty/rewards program in a business is the key component to retaining and attracting new potential customers. Thus, it is crucial for a business to possess the best loyalty/rewards program in its industry. With Landry’s Seafood Inc.’s acquisition of the Trump Marina in Atlantic City, New Jersey, the company is in dire need of a new and revitalized loyalty/rewards program in order to put their company’s name on the map in Atlantic City. Currently, Landry’s uses the Trump Marina’s old loyalty program for their Golden Nugget in Atlantic City, but the success of the new Golden Nugget will not come with an outdated loyalty/rewards program.

Research Methods and Findings and Conclusions of the Study

Our team used four research methods to receive information on the new Golden Nugget in Atlantic City, specifically, its loyalty program. The goal of the research was to determine why the Golden Nugget’s current loyalty program is not effective in its current location and why gamblers of ages 21-35 do not play at the Golden Nugget. Also, our research helped our team discover what aspects of other company’s loyalty programs make them successful. The research methods that were utilized were; a gambling preference survey, 24 Karat Club Member survey, interview with executives, and internet research on the Golden Nugget.

After conducting our research, we found that many new gamblers preferred to play at the Borgata, Caesar’s, Harrah’s and The Tropicana for a variety of reasons (mostly pertaining to entertainment/nightlife/food). Also, we discovered that many of the current gamblers at the Golden Nugget consist of a much higher clientele, which is what the old Trump Marina attracted. When new gamblers (ages 21-35) were informed of the Golden Nugget’s 2011-2012 renovation, they were thrilled to find out that a night club would be added, as well as more restaurants, entertainment centers and bars.

Proposed Strategic Plan and Promotional Plan

Our proposed strategic plan includes a refreshed loyalty/rewards card, managing Facebook and Twitter accounts, teaching current and new employees about the new perks of the enhanced loyalty/rewards program, and implementing various activities and new promotions. The new perks combined with the renovation are the main focus of the proposed plan, it will allow new gamblers to feel they are getting better deals from the Golden Nugget casino as opposed to other casinos in the area. Managing the Golden Nugget’s Facebook and Twitter accounts will allow for gamblers to express their concerns as well as positive feedback on the enhanced loyalty/rewards program. Lastly, employees will need to attend an orientation session in order to learn about the revised loyalty program so they will be able to answer questions of new and old customers about the program. The proposed strategic plan is geared towards attracting a younger clientele to the new Golden Nugget location in Atlantic City.

Goals of Strategic Plan and Promotional Plan

The main goals of the proposed strategic and promotional plan are:

increase membership of the younger clientele and retain their membership increase size of general gamblers at the casinoincrease the Golden Nugget’s market shareincrease profits

Proposed Budget

Once completing the proposed budget plan, we established a total budget of $1,363,766.48. This proposed budget is relatively low when compared to current and potential profit of the casino as well as Landry’s restaurants.

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II. Introduction

A. Description of the Business

Landry’s Restaurants, Inc. was founded in 1980 with its original restaurant, Landry’s

Seafood in Katy, Texas. The CEO Tilman J. Fertitta acquired controlling interest in 1986 of

Landry’s first two restaurants. In the past 20 years, Landry’s has grown from a small private

business to a Public corporation, back in 1993, and now the corporation has over 200 locations

worldwide.

In 2005, Landry’s Restaurants, Inc.

acquired the rights to the Golden Nugget

Casinos in Las Vegas and Laughlin,

Nevada. The entertainment industry

proved to be very successful for Landry’s

and recently, on May 23, 2011, Landry’s

completed the purchase of the Trump

Marina in Atlantic City, New Jersey for $38 million. Following the purchase the casino has been

renamed The Golden Nugget, becoming the third one. Since the purchase Landry’s has started

remodeling the new location, aiming to double their customer count. The new Casino location

has given Landry’s a unique edge in the current marketplace for it has a marina and a water-front

view, which is highly desirable. The Golden Nugget Atlantic City has a general manager and

1200 employees (see appendix for organizational chart). Currently at the Atlantic City location

they have approximately 70 table games, of the 70 black jack, craps, and mini baccarat are most

popular.

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Figure I: Golden Nugget Casino in Atlantic City, New Jersey

B. Description of the Community

Economic:

According to the United States

Economic Census, which is taken every five year,

the accommodation and food services sales have grown significantly. In 2002, it was reported

that $4,480,402 were made in accommodation and food services sales. In 2007, the Economic

Census reported a sales figure III of $5,602,533. So over the five year

period, Atlantic City saw a 125% increase. Also, the poverty rate (of

New Jersey) as of 2009 was 9.4%, which is 4.9% under the USA

average.

Geographic:

  The Customer Loyalty Plan will be focused primarily on the

existing target market area of about 250 miles from the casino. The

Golden Nugget is located in Atlantic City, New Jersey right on the

Frank S. Farley State Marina, on Huron Avenue off of Brigantine

Boulevard. Atlantic City is one of the prime casino and gambling

spots in the country and the only in New Jersey. Since the Casino is on

the water, there are many ways for their customers to travel there: by

car, by boat, by bus, and by train into the city then taxi from there. (see figure III for map of

Atlantic City).

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Figure III: Map of Atlantic City with pin drop location of the Golden Nugget

Figure II: food sales in Atlantic City compared to New Jersey (2009 economic census)

Demographics:

As of the 2010 United States Census, there were 8,791,894 people living in the state of

New Jersey. Also, there were 274,549 people living in Atlantic County, New Jersey and in

Atlantic City, New Jersey, there are 39,588 people. 19,396 of the population are males and

20,162 are females. (See figure IV for more details about the demographics).

It is important to know the number of people in each age group for New Jersey when

assessing Landry’s Target Market for The Golden Nugget in Atlantic City (See Section C). In

order to gamble in the United States, one must 21 years and older. In the State of New Jersey,

approximately 72.7% of the population are 21 years and over, which is roughly 6,391,930

people. There are 4,279,600 males (48.7% of the population), 3,048,612 of the males (34.6%)

are old enough to gamble in the United States. Also, in New Jersey, there are 4,512,294 females

(51.3% of the population) and 3,343,318 of which (38%) can gamble (they are over the age of

21, See above figure)

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Figure IV:

Based upon the census, the median household income of residents in New Jersey is

$68,444.00 as of 2009. This statistic is important because it shows the level of the standard of

living in New Jersey and shows that it is $18,223.00 over the USA average. And in 2010, it was

reported that 44.6% of adults who live in New Jersey hold a two or four year college degree,

which is above the national average of 38%. Furthermore,

Socioeconomic:

Throughout the state of New Jersey based upon The Department of Higher Education of

New Jersey there are 66 total state and private colleges and universities, of those include three

public research universities, nine state colleges and universities, 19 community colleges, 14

independent four-year colleges, seven proprietary institutions, 12 rabbinical/ theological schools,

as well as two independent religious colleges. As a whole, New Jersey has all classes of citizens

from upper to middle to lower class citizens. There are as well a mixture of the businessperson

to the farmer and even the unemployed. As New Jersey is known as the Garden State it is most

popular for its cranberries and blueberries. Nation wide according to the census the real median

household income has dropped 2.3 percent to $49,445 in comparison to 2009. The

unemployment rate in New Jersey is around 9.1 percent higher than the 8.5 percent of all the

United States, both of the numbers are decreases from the high in 2009 around 10 percent for

both.

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C. Description of the business’s target market

A target market is essential to a business’s s success. After Landry’s Seafood Restaurants

Inc. acquired the Trump Marina, they also inherited a large outdated database full customers‘

names. In order to reestablish a base with the actual customers of the former Trump Marina, a

new target market must be determined.

Currently, the Golden Nugget Casino in Atlantic City, New Jersey is lacking a target

market. So, along with the Landry’s executives, our team has developed a new target market for

the Golden Nugget in Atlantic city that will go with the new renovation that began at the end of

2011. Therefore, we decided that the target market for Landry’s after the renovation will be for

the younger generation of gamblers, specifically gamblers from the ages of 21 to 35. Landry’s

would like to see not only the male population of gamblers, but also the female population of

gamblers in their new target market. In order to attract the two, Landry’s will be adding retail

stores, bars, high quality restaurants and a night club in their current renovation. The household

income level of the target market is approximately between $40,000 and $60,000. Even though

Landry’s wants their new target market’s age group to consist of the younger generation of

gamblers, their ultimate goal is to entice all gamblers, 21 and older, to play at the Golden

Nugget.

III. Research Methods Used in the Study

A. Description and rationale of research methodology selected to conduct the research study

The purpose of our research was to conduct a SWOT analysis of the 24 Karat Loyalty

Rewards Program of the Golden Nugget Casino Atlantic City. A SWOT analysis is an

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internal examination of a company’s strengths and weaknesses as well as it’s external

opportunities and threats. The goal of the analysis is to improve the 24 Karat Club by assessing

the areas of the loyalty rewards program’s that can use improvement, for example, its social

media aspect. To conduct the SWOT analysis and accomplish our goal, we used primary

research.

The primary research method used in our study was in the form of surveys and interviews

(see figure V for primary research goals). The purpose of our surveys was to determine how

strong the clientele is at the Atlantic City Golden Nugget and why they stay or do not. The two

surveys that we created were distributed to people between the ages of 21 to 35, basically, to the

young population who gambles in Atlantic City, NJ. Our first survey consisted of a two multiple-

choice questions. The first multiple-choice question contained a list of various Atlantic City

casinos to choose from (based upon where the person gambles). The second question contained

a list of reasons as to why someone prefers to gamble at a certain Atlantic City casino (the

second question gave people the option to check all of the answers that apply). Our second

survey was designed to specifically target gamblers who are in the Golden Nugget Atlantic City’s

24 Karat Club. It’s purpose was to ask the customers what they like and dislike about the Golden

Nugget in Atlantic City. The last part of our primary research was the two interviews that we

conducted. Our first interview was with Landry’s Seafood Inc, Executive Vice President and

General Counsel, Steven Scheinthal, which was conducted on October 21, 2011. Our second

interview was conducted on October 29, 2011 with Kelly Roberts, the Chief Administration

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Officer, Hospitality and Gaming

Division. (see appendix for surveys)

As for our secondary method of

research, our team utilized various

sources. These sources ranged from the

Wall Street Journal, to Landry’s Seafood

Inc. websites. Our secondary internet

research allowed our team to gather a

variety of information on the company

Landry’s Seafood Inc., which owns the

Golden Nugget in Atlantic City. It also enabled us to obtain information about loyalty programs

that are similar to the current 24 Karat Club, as well as other loyalty programs that can help us

create our new loyalty program for the Golden Nugget.

Our team thought it would be best to use both primary and secondary methods of

research in order to gain all of the necessary information for creating a new loyalty program for

the Golden Nugget in Atlantic City. By using surveys and interviews for our primary research,

we decided that we would receive the most reliable and accurate information. Our surveys were

constructed to have very few questions with clear font and text size in order to minimize the time

required to fill out a survey. Thus, enabling our team to obtain more research easily.

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Figure V: Primary Research Goals graphic

B. Processes of conducting the selected research method(s)

  After establishing the objectives of our research, our team implemented the objectives by

dividing them up into several steps. Each step contains a detailed plan that is described in figure

VI below. The purpose of our research is to find ways to enhance the current loyalty program for

the Golden Nugget casino. Our enhancements will be based off of the 24 Karat Club and our

team will be making minor changes to the 24 Karat Club so they will be tied in with the new

attractions and renovation of the Golden Nugget. We will be using a mixture of techniques

including surveys, and other primary and secondary techniques.

Step Action Implemented Date of completionStep 1 Background information research

on the Golden Nugget and the companies under Landry’s Inc.

umbrella

September 2011

Step 2 Research competition of the Golden Nugget and a comparison between

the Golden Nugget and its main competitors (the Borgata, Harrah’s

and the Taj Mahal)

September 2011

Step 3 Research the Atlantic City community

find the economic, geographic, demographic, and socioeconomic factors for the state of New Jersey

and Atlantic City

September – October 2011

Step 4 Conduct an interview (primary research method) with Landry’s Executive Vice-President Steven

Scheinthal

October 2011

Step 5 Conduct the secondary research with the surveys

October 2011

Step 6 Conduct second interview with Steven Scheinthal and an interview with the head of Landry’s Gaming

division executive, K. Kelly Roberts

October – November 2011

Figure VI: Chart for step by step actions for conducting research on the Golden Nugget

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IV. Findings and Conclusions of the Study

A. Findings of the Research Study

Through our various types of research methods, we have accumulated some extremely

useful information that has helped us devise a new loyalty rewards program for the Golden

Nugget in Atlantic City, New Jersey.

After conducting our two interviews, we began taking steps towards our ideas for a new

loyalty program. Our First interview was with Landry’s Seafood Inc., Executive Vice President

and General Counsel, Steven Scheinthal, which was conducted on October 21, 2011. This

interview gave us insight to the company as well as the Golden Nugget casino in Atlantic City.

From Mr. Scheinthal, we were able to determine the casinos busiest day is Saturday from 8 p.m.

to 2 a.m. and its slowest days of business are weekdays typically 2 a.m. to 11 a.m. The Atlantic

City Golden Nugget has approximately 1200 employees. Also, the casino has anywhere from

2,000 to 4,000 customers daily (not at the same time of course) and about 50 percent of those are

members of the 24 Karat Club. People who are currently in the 24 Karat Club receive amenities

such as points based upon their play, which allows them to redeem points for additional gaming

play at no cost, as well as food, beverages and rooms. In addition, points in the Golden Nugget

in Atlantic City may be redeemed for retail merchandise. Essentially, the 24 Karat Club tracks

the gaming play of our customers and based on a pre-determined formula. Our second interview

took place on October 29, 2011 with K. Kelly Roberts, the Chief Administration Officer of

Hospitality and Gaming Division for Landry’s Seafood Inc. We were able to find out many

important things concerning the Golden Nugget Casino in Atlantic City. Such as: the role of the

general manager is to oversee all casino operations he has 8 people that report to him, the most

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popular events and games, as well as the number of tables for each game. Also, Mr. Roberts

informed us of the Golden Nugget’s top three competitors, which are the Borgata, Harrahs, and

the Trump Taj Mahal. Through this interview, our team was able to determine the company’s

new target market (approximately males and females 21-35 with an average income of

30,000-60,000 dollars), which we plan on utilizing in our new loyalty program. In addition,

from our second interview, we were able to determine the approximate number of people

currently in the 24 Karat Club, which is estimated to be well over 100,000 people.

Unfortunately, while under the ownership of Trump, records were not updated, so this data is

considered to be faulty. Lastly, our team was informed about the new additions to the Golden

Nugget Casino from its current renovation, which is to be finished in early 2012. The Golden

Nugget casino is to be receiving multiple bars, a night club and more retail stores, in order to

attract a younger clientele.

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Weaknessnew casino in the Atlantic City area )outdated data base of customers (inherited from Trump Marina

Opportunities large potential market for new customers(Tri-State Area)

Threatscompeting against some of the top casinos in the business (Borgata, Harrah’s)new casinos opening in Philadelphia

Strengthsstrong background in the casino business (Golden Nugget in Las Vegas)location of the Casino (on the Marina)new additions from the renovation

SWOT Analysis

Figure VII: SWOT Analysis graphic

We also conducted research through a survey. The research told us which casinos people

were most likely to go to and why they went there. The top two casinos were Borgata and

Harrah’s, which were expected results, but Tropicana also made the list. Many people answered

that they went to these casinos because of the great food others, while others said that the venues

were big factors as to where they went to play games, eat and sleep. These are important factors

in the making of the loyalty program to make sure that the customer base gets rewarded for the

things that they are going to the casinos for. Also, we will use this information to determine why

the other casino in the area are successful and how we can make the enhanced loyalty program

for the Golden Nugget succeed.

The internet was a helpful tool in our secondary research. During the beginning stages of

our research we looked on the Landry’s website to see the history of when Landry’s was

established and their current form of business. We also found their current and previous sub

companies under the Landry’s corporate name. Our in-depth research of the Golden Nugget and

the 24 Karat Club gave us insight into what current members receive in rewards such as various

electronics (i.e. TV’s, laptops etc.), vacation packages, and more. We also learned how the

members acquire points: from playing at different games. From the in-depth research of the 24

Karat Club we got a chance to conduct a SWOT analysis; the strengths, weaknesses,

opportunities, and threats of the program. The current program was strong in the customer

membership though it was the previous Trump Marina membership, the rewards program was

also strong, we were weak in the general customer base, and the golden nugget is a new casino.

We found that there is a large incoming population of the younger casino goers and we need to

attract them to the Golden Nugget, the new loyalty program will be used to do that. There is

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always the threat of the competition, as there are many other casinos in Atlantic City, New

Jersey. Some may have better deals and attractions, the new loyalty program will need to give the

customers another reason to come back to the Golden Nugget.

B. Conclusions Based on the Findings

The 24 Karat Club at the Golden Nugget in Atlantic City, New Jersey is a successful

loyalty program that has a large membership, however not all of the loyalty program’s members

are regular gamblers at the Golden Nugget. Because of an outdated data base inherited from the

Trump Marina, Landry’s must now revitalize the Golden Nugget, and it’s loyalty program, in

order to a achieve a consistent membership. The consistent membership that our team is aiming

to receive is the younger generation of gamblers (our target Market). Currently, the majority of

gamblers at the Golden Nugget in Atlantic City are of a much older generation (around 50-60

years of age). Thus, the improved loyalty program for the Golden Nugget Casino will need to

encompass what the younger generation is looking for (i.e.: rewards for the venues they attend

and for the night life they wish to be a part of). The new night club (The Red Room) that will be

opening at the Golden Nugget will be a key part of the promotion for the enhanced loyalty

program. We want to be the premier spot for our target market to not only to rent rooms at the

Golden Nugget, but to also play the variety of games offered by the casino and the new night life

addition. The information we found will help to create the best loyalty program available for the

group of the customers that are not currently targeted. The surveys and interviews gave a more

personal view of the casino business and how it is currently run by Landry’s employees. Some

changes may be to introduce a special points program where when attended the venues will give

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members the chance for special seating and members only concerts and back stage passes.

V. Proposed Strategic Plan

A. Goals/objectives and rationale

Once the enhanced loyalty program is implemented by Landry’s Seafood Inc., the Golden

Nugget will acquire one of the best loyalty programs available at any of the casinos in Atlantic

City. The purpose of introducing this new plan will be to enlarge the membership of the 24 Karat

Club as well as the number of customers of the Golden Nugget, by bringing in a younger

clientele and by the new additions to the Golden Nugget from the recent renovations. To improve

the current loyalty program, we have added various rewards and incentives for the new members

to use at the new night club and at all of the other activities within the Golden Nugget and other

Landry’s properties. Our team will help the Golden Nugget bring awareness to its customers

about the many items that can be received with the redeemable points from every activity a

customer does at a Landry’s property. We believe that if there is a successful loyalty program in

place that will allow customers to receive points for the use of our casino, then there is a higher

percentage of people that will be patrons to the casino. Also, our team will utilize social media to

keep in touch with our members in order to keep them updated about the special deals and to

attract new customers to apply for the new enticing loyalty program. When Landry’s acquired the

Golden Nugget, it was evident that the majority of the younger generation of gamblers would

play at the Borgata and Harrah’s, this will not be the case anymore with the Golden Nugget’s

renovation and the new loyalty program. The new loyalty program will enable the younger

clientele to play a variety of table games, eat at high quality restaurants and enjoy the night life at

a much lower cost than one would spend at the Borgata or Harrah’s. Thus, by making the 14

Golden Nugget more affordable and enticing, the younger generation of gamblers will be more

inclined to dine, play and sleep at the Golden Nugget rather than the Borgata or Harrah’s.

Short Term Goals/ Benefits:

Advertise renovations and new attractions of the Golden Nugget

Increased membership of the 24 Karat Club+ by 15%

20% increase of members that utilize social media

By advertising the renovations, more clients will be attracted to play at the Golden

Nugget casino. Thus, more of the general clientele that enters the casino daily will be enticed to

sign up for the 24 Karat Club+. The kiosk for the 24 Karat Club+(as seen in figure VIII), which is

located in the lobby of the Golden Nugget casino, will also be a key factor for getting new

customers to sign up for the loyalty program and to assist the members of the loyalty program

with any problems. We want to see our membership of the 24 Karat Club+ increase 15% in the

first several months after the new loyalty program is put into place.

Long Term Goals/ Benefits:

Become one of best casinos in Atlantic City

Increase profits of the Golden Nugget by 18%

See the membership of the higher tiers increase by 5%

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Figure VIII: 24 Karat Club Kiosk

Essentially, our team would like the Golden Nugget to make a name for itself in Atlantic

City by taking away the market share from casinos like the Borgata and Harrah’s. In turn, the

loyalty program will draw more people to the casino, which will eventually result in more

members. Another long term goal of ours is to increase the Golden Nugget’s profit by 18%.

With an increase in the membership of the 24 Karat Club+, more people will be in the Golden

Nugget casino on a day to day basis, which will help generate a larger revenue because more

money will be going into the casino. Lastly, we want to see an increase of approximately 5% of

the membership of the higher tiers for the 24 Karat Club+. The different tiers of the 24 Karat

Club+ are; Premier, Chairman, and Elite status, with each level the member receives more

rewards in points and specialty treatment.

B. Proposed activities and timelines

Enhanced Loyalty Program: 24 Karat Club+

Purpose:

Bring in a younger clientele to the casino and a larger portion of the female population

Increase profits of the Golden Nugget (and Landry’s)

Increase the number of regular customers in the casino

Create a new awareness for the Golden Nugget in Atlantic City and its recent renovation

Benefits:

Increased profits

Increased awareness/reputation

Longevity of the Golden Nugget

Larger membership

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According to our research, loyalty programs help monitor customer retention, the

collection of various data to aid in marketing research and they yield primary data on which

aspects of a business are most successful. In this case, a loyalty program will keep track of which

games, restaurants and retail stores are the most popular. Also, the loyalty program will hold a

record of the number of times any given customers plays a certain type of game, how frequently

they go to/rent a room at the Golden Nugget. Currently, the Borgata and Harrah’s, the Golden

Nugget’s two main competitors, are both much larger casinos with almost double the amount of

table games. However, they both lack a method for the younger generation of gamblers to play,

eat, and sleep inexpensively. When young potential gamblers, from ages 21 to 35, completed a

survey about their favorite casino, they all answered that they do not enjoy paying a large sum of

money in order to play table games, eat dinner, and rent a hotel room. Therefore, the proposed

24 Karat Club+ will have the following components for its members: discounted rooms, room

reservations, dinning reservations, lounging hours/reservations, club access, entertainment

listings, and a personal online account (point tracker).

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Figure IX: Web Page for filling out an application for the 24 Karat Club+

In order to access the benefits of the 24 Karat Club+, the user’s online account must be set

up first. To receive the account, one must apply for the card by completing the online sign up

page (figure IX) and paying a one-time fee of $15. Once the customer receives their 24 Karat

Club+ card in the mail, they will receive an e-mail confirmation of their purchase for the card

along with their ID number, which is to be used as the user name for the online account (the ID

number will also be written on the card, see figure XI) (figure X is where the members log on to

their accounts). Then, the new member to the 24 Karat Club+ will be able to redeem rewards

from the Landry’s website. The rewards available range from electronic devices (like an iPod

touch) to a vacation package.

Like all of the other Landry’s loyalty programs (Landry’s Select Club and the 24 Karat

Club), the 24 Karat Club+ will be based off a points system, where every dollar spent is turned

into points that can be used at anytime to redeem a reward. By having the new 24 Karat Club+,

members will be able to receive free rooms by using their accumulated points. Also, the

accumulated can be put towards drinks in the night club, dinner, and other various activities at

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Figure X: login page for 24 Karat Club members Figure XI: example of 24 Karat Club+ card (arrow pointing to players ID) (for more cards, see appendix)

the Golden Nugget casino. The 24 Karat Club+ offers the members other incentives like, 50%

off for a second room purchased using the card (see figure XII below for more perks).

Marketing Activities:

Purpose:

Advertise the Golden Nugget and the new 24 Karat Club+

Increase customer base

Benefits:

Increased awareness

Increased profits

In order to introduce our new additions to the Golden Nugget’s 24 Karat Club, we will be

meeting with the CEO and the members of the Executive Board to discuss and present the

proposed enhancements to the 24 Karat Club. This will happen over the next several weeks, so

that it will be ready when the renovation of the Golden Nugget casino in Atlantic City is

completed. Our goal is to have it introduced with the renovation, mainly with the new night club

(The Red Room). This will be a big part of this enhancement to the 24 Karat Club. We will want

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Perks for the 24 Karat Club+ Holders:15% discount on all drinks in bars and

restaurants (and food)10% discount on club entrance feesupdates on weekly entertainment20% discount on a room purchase20% discount on boat/jet-ski rentals (via

Marina)

Figure XII:

to coordinate a promotional marketing plan to advertise these enhancements. The purpose of this

plan is to bring in a new target market of the 21 to 35 age group.

The 24 Karat Club+ will be marketed through various styles of advertising that includes

social media, print media, and transportation (see section C for budget). By utilizing these three

methods of marketing, our team believes that the Golden Nugget will see an influx of younger

clientele in the casino. Social media has been used to contact millions of people at a low

expense. Through Twitter and Facebook updates by the Golden Nugget’s employees, many

young adults will eventually catch on about the new-upbeat casino, due to the renovations and

the 24 Karat Club+. Print media and transportation will further advance the Golden Nugget’s

name in the casino industry as thousands of people travel along the New Jersey, Pennsylvania,

New York and Maryland highways each day.

Figure XIII: Timeline table

Activity Details DatePropose enhancements to the

Board Introduce the new

enhancements aiming to have them put into action along

with the renovations

December 2011

Speak with the General Manager concerning the

enhancements to the 24 Karat Club

Our goal is to make sure the General Manager understands what the plan is and to ensure

that it will work

December 2011

Propose Grand Reopening Events

Bring up ideas of DJ’s to bring to The Red Room such as Tiesto, Avicii, Deadmau5.

January 2012

Create the Promotion Plan for the enhanced 24 Karat Club

Plan the way the new 24 Karat Club will be marketed to the public to pull the new target market into the casino and to

the attractions

January – February 2012

Implement Promotion Plan for the enhanced 24 Karat Club

Put the new/enhanced 24 Karat Club into action by

using key marketing strategies developed in the Promotion

Plan.

March 2012

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Six Month Evaluation We will be evaluating how the enhancements are working

and looking to see if the program is successful and

ways to improve

September 2012

12 Month Evaluation We will be conducting a SWOT analysis and looking to

see when a merger into the main program will be most

successful

March 2013

C. Proposed Budget

Our proposed budget for the implementing of the 24 Karat Club will be

$1,392,149.44. The mediums of marketing that will be used are electronic billboards placed

along major highways and bridges including the Atlantic City Expressway and the major bridges

into New Jersey, We will also be sending out full color post cards sub-contracting Vista Print for

printing and distributing based off a mailing list from our database. Print will be used through

advertising in the New York Times as well as in the Philadelphia Inquirer on full page full bleed

ads. We will be broadcasting advertisements by radio in three different markets all year long;

these markets will be New York, Philadelphia, and Delaware three times during the week and

twice on the weekends. We will be doing some cross marketing within the Landry’s Inc.

restaurants in the area, this will help to boost not only the customer base of the Golden Nugget in

Atlantic City but those restaurants as well, these restaurants will include Rainforest Café, Chart

House, and Vic & Anthony’s in Atlantic City, NJ, Chart House in Philadelphia, PA, Rainforest

Café in Edison, NJ, and Big Fish in Princeton, NJ. As a way to get the customers that patron the

Golden Nugget to become members of the 24 Karat Club we will have employees ask them to

sign up as well as to have pamphlets located around the location with information concerning the

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club. As is currently used the website will be a very useful and low cost option fully explaining

the club as well as a way for the members to view the catalogue to order items with their rewards

points. A spread of the costs in our budget is explained below in figure :

D. Proposed metrics to measure return on investment, sales, customer retention, customer satisfaction etc.

There are a few metrics for measuring the ROI, sales, customers, and traffic. The best

metric to use to determine these factors is milestones; each milestone is a goal set to be

accomplished. The Golden Nugget will be looking for substantial increases in their long-term

profit (18% increase) as well as the membership of the 24 Karat Club (15% increase) and the

customers who use the casino (5% increase). To determine the ROI, we will need to compare the

current revenue and profit generated by the Golden Nugget and the revenue and profit

accumulated after the program has been introduced. This process will be done at the six month

evaluation by factoring in the costs of the implementation of the new 24 Karat Club. The Golden

Nugget will be looking to receive a $3 million increase in profit more after the introduction of

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Figure XIV: Table for Budget with total cost

the revolutionized 24 Karat Club+. The Golden Nugget, through the use of its customer and

membership data base, will determine the how successful the new loyalty program is at retaining

new customers. Also, the Golden Nugget will ultimately realize the satisfaction of the customers.

Since the tier membership balances will be reset before the new 24 Karat Club+ is introduced,

our team will have the ability to find how much playing time, found through the number of total

points awarded, has been done on the game floors. And, we also will be able to find how many

members and non members have been attending The Red Room and concerts based upon ticket

and admission sales. The Golden Nugget also uses the contact page on their website for people

to contact the company with any thoughts; this will be also utilized as a way to measure

customer satisfaction.

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VI. Bibliography

Golden Nugget Atlantic City, prod. Home Page. Golden Nugget Casino Atlantic City. Landry’s Inc., 2012. Web. 30 Jan. 2012. <http://www.goldennugget.com/‌AtlanticCity/>.

Landry’s Inc., prod. Home Page. Landry’s Select Club website. Landry’s Inc., 2012. Web. 30 Jan. 2012. <http://www.landrysselect.com>.

Movoto, comp. “Demographics .” Movoto. Movoto LLC., 2004. Web. 14 Nov. 2011. <http://movoto.com>.

Roberts, K Kelly. E-mail interview. Nov.-Dec. 2011.

Scheinthal, Steven L. E-mail, Phone interview. 17 Oct. 2011.

- - -. E-mail, Phone interview. 29 Oct. 2011.

VistaPrint, prod. “Postcard Mailing - Business.” VistaPrint. N.p., 2001-2012. Web. 7 Jan. 2012. <http://www.vistaprint.com/‌postcard-mailing.aspx?txi=187&xnid=VisitorHomePage187_183_131&xnav=TeaserItem&GP=2%2f7%2f2012+11%3a42%3a44+PM&GPS=2346471422&GNF=1&GPLSID=>.

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VII. Appendix

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Organizational Chart for the Golden Nugget

Survey  #1:  (for  younger  genera1on  of  gamblers  ages  21-­‐35)

Which  Casinos  are  you  most  likely  to  gamble  at?  (Circle  One)o Borgata

o Harrah’s

o Golden  Nugget

o Trump  Taj  Majal

o Caesar’s

o Other:_________________________________

Why?  (Check  all  that  apply)

o They  had  the  best  events

o Night  Club

o Entertainment

o Game  Variety

o Other:______________________________

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27

Survey #2: Online survey for 24 Karat Club members and customers of the Golden Nugget

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!

Redesigned 24 Karat Club+ cards for each tier:

Radio/Broadcasting rates:

How  successful  is  the  24  Karat  Club  Las  Vegas  Golden  Nugget  Casinos,  is  it  as  successful  at  the  Atlan1c  City  loca1on  and  do  you  expect  it  to  be  rise  in  popularity  in  the  future?

We believe that the 24 Karat Club in Las Vegas has been a very successful tool to reward the loyalty of our customers. The 24 Karat Club tracks the gaming play of our gamblers and based on a pre-determined formula, allows customers to earn points which can be redeemed for free play, meals, beverages and rooms, among other things. Since we acquired the Golden Nugget Atlantic City property in May 2011, the 24 Karat Club has not been in operation as long as the program has been in place in Las Vegas. We anticipate that over time, the 24 Karat Club in Atlantic City will rise in popularity and will become as successful as the program has been in Las Vegas.

What  is  the  general  membership  of  the  24  Karat  Club?    Our  goal  is  to  sign  all  of  our  customers  up  to  the  24  Karat  Club.    Not  only  does  this  allow  customers  who  gamble  to  earn  points  which  may  be  redeemed  for  gaming  play,  food,  beverage  and  rooms,  membership  provides  us  with  informa1on  about  our  customers  and  enables  us  to  target  market  promo1ons  to  our  customers.    Based  on  the  level  of  play,  we  can  develop  beYer  promo1ons  for  our  beYer  customers.

Is  there  currently  a  rewards  program  for  special  events  and  food?

Yes,  points  are  earned  with  the  24  Karat  Club  which  allow  redemp1on  for  aYendance  at  special  events  and  food.

What  is  the  legal  form  of  business  of  the  Golden  Nugget?

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!

Billboard ad costs:

Interview with Landryʼs Executive Vice President Steven Scheinthal:

The  Golden  Nugget  is  a  corpora1on.

What  special  events  does  the  24  Karat  Club  include?

We  con1nually  have  special  events  all  of  the  1me.    For  instance,  we  have  an  October  Fest,  a  Wine  Fest,  Super  Bowl  par1es,  March  Madness,  summer  events,  a  New  Years  Eve  party,  poker,  black  jack  and  slot  tournaments.    Based  on  the  level  of  play  of  our  customers,  the  24  Karat  Club  allows  us  to  market  to  our  customer  base  and  enables  us  to  target  market  specific  promo1ons  and  further  lets  us  know  what  customers  are  most  responsive  to  which  promo1ons  and  the  types  of  rewards  or  events  that  they  like  to  aYend.

What  ameni1es  do  the  members  receive?

The members receive points based on their play which allows them to redeem points for additional gaming play at no cost, plus food, beverages and rooms. In addition, points in Atlantic City may be redeemed for retail merchandise.

On  average  how  many  people  do  you  have  per  day  and  of  those  how  many  are  members  of  the  club?

We will have anywhere from 2,000 to 4,000 people in our casinos on a daily basis, although not all at the same time. More than 50% of our gamblers are 24 Karat Loyalty club members.

Which  days  is  the  casino  the  busiest  and  is  there  a  specific  hour  that  the  Casino  is  the  busiest?

By far Saturday is the busiest day in the casino industry, especially in Atlantic City. The casino is the busiest between 8:00 p.m. and 2:00 a.m.

Which  days  are  the  slowest  for  business?  What  are  your  slowest  hours?

The weekdays are clearly the slowest. The slowest hours are typically from 2:00 a.m. to 11:00 a.m.

How  many  employees  do  have  at  the  Golden  Nugget  Atlan1c  City?

We have approximately 1200 employees.

Do  you  have  an  organiza1onal  chart  for  the  24  Karat  Club  (in  Atlan1c  City)?

Yes, we have different tiers of membership with the highest level of play being that of Chairman status. If you are a member of the Chairman’s Club, in addition to all other benefits of the 24 Karat Club, you are also entitled to free meals and beverages in the Chairman’s Club.

What  are  the  most  popular  games  in  the  Atlan1c  City  Casino?  And  how  many  tables  do  you  have?

We have approximately 70 table games. The most popular games are black jack, craps and mini baccarat.

Does  being  right  on  the  water  and  having  a  marina  create  an  advantage?

Yes, it always helps to have a feature to your property that no other competitor has. Certainly, our waterfront view and marina provide us with something very unique in the marketplace. We have a Chart House restaurant with a waterfront view and during the summer, we have outdoor dining at the Marina and live bands.

What  is  the  an1cipated  increase  in  customers  from  the  renova1on?  How  do  you  plan  to  promote  the  Casino  a`er  the  renova1on?

We believe that we will double our customer count as a result of the renovations. We will market the completion of the renovations through billboards, radio, television, newspaper and direct marketing pieces to our customer base.

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