MIS Assignment Harrahs Entertainment Inc.

Submitted by Group 3 (Section A) PGP29004 Sowmiya S PGP29005 Diana Roy PGP29047 Saurav Roy PGP29051 Sabyasachi Rout Q1. Why is it important to use rather than the observed level of play? the customer worth in the DBM efforts

Customer worth (theoretical win) is the theoretical amount the house expects to win. If DBM efforts focus on customer worth rather than observed play, Harrahs can exploit more potential high worth players. Customer worth forecasts theoretical amount Harrahs expects to win over the long term. Model is based on various customer information collected. Past behaviour does not always constitute future behaviour.

When its competitors entered new markets with advantages of innovation and lower cost during the 1990s, Harrahs capped the business growth. However, the company rather chose to make use of an existing advantage customer loyalty, instead attempting to create new resources. A marketing database contains information about individual customers or potential customers that is relevant to the marketing process. DBM is an important tool to build up customer relationship and increase the loyalty. Customer profiles provide information about customers play preferences, betting patterns, how often they visit, how much they play, etc. After retrieving detailed information from every customer, Harrahs could predict potential customer playing behaviour at all of its properties through quantitative models. After the models identified some opportunity-based customer segments for rationalized reinvestment, Harrahs sent customized incentives to these customers, seeking relationships with them based on their future worth, rather than on their past behaviours. One more important objective of DBM is to track customers over time and conduct some marketing experiments, so that Harrahs can find the right marketing instrument, for the right behaviour modification, for the right customer. When Harrahs issues special promotions, it needs to know which kind of promotion is the most effective at the lowest cost. For example, through marketing experiments, Harrahs found that a less attractive offer was more profitable, and the return of a portion of customers bet was unnecessary. Through the DMB program,

Harrahs could gain a better understanding of customers to increase customer satisfaction and achieve organizations objective at a profit level. Customer worth (theoretical win) is the theoretical amount the house expects to win. If DBM efforts focus on customer worth rather than observed play, Harrahs can exploit more potential high worth players. When investment is just concentrated on visitors with high observed frequency, the market would be narrowed down, because in a high observed frequency market, there are only a limited number of customers with high worth to work on. In a highly competitive gambling market, striving for a limited number of customers is difficult. If Harrahs can discover and exploit some customers with high worth in the low observed frequency market where less competition exists, the business will have great potential to thrive. Accordingly, customer worth is more valuable to exploit than observed level of play.

Q2. What is the sustainability of Harrah's action and strategy? In order to decode the steps taken by Harrahs, the first steps that need to be considered are the initiatives taken by Harrahs: changing the organization structure, building the Harrahs brand, delivering extra-ordinary service, and exploiting relationship marketing opportunities. Strengths Models to predict future worth of players Direct mail campaign Patented technology performance linking player Weakness Facilities as compared to competitors Across board facility upgardes difficult and expensive

Sucessful cross marketing processes

Opportunities Invest in bussiness intelligence to get competitive advantage Use profits' portion for properties in key markets

Threats Competitors investing in newer theme based facilities

Copycat marketing by competitors

It is mostly sustainable due to high switch costs for competitors. Apart from the above, Harrahs has the option of protecting is innovative processes and knowledge through proprietary means. This will give its business the necessary edge without having to worry about competition trying to reproduce its innovative processes. Further, Harrahs may license its intellectual property and earn revenue from its proprietary software.

Continuing aggressive investments in information technology and analytics can be the core competency of the company. Also as it will be difficult to rebuild a 50 year old company, it the best alternative chosen by Harrah. The corporate personnel hired is one of the best strategy to deliver SCAs based on business intelligence, via their unique skill sets. Considering all these factors, it can be concluded that Harrahs action and strategy are quite sustainable. Q3. What are concerned about? the ethical and privacy issues that Harrah's should be

1. As they are in gambling business, it is unethical to take advantage of people and promoting gambling business on such a large scale. People go to the casino because they want to feel alive. Harrahs works at enticing customers to feel the adrenaline rush of gambling. Most of their offers are targeted towards this. This has definite ethical issues since gambling can become an addictive practice and Harrahs offers encourage such behaviour. 2. Data is most important to a business. So it should not sell data to third party users such as credit card companies, other fraud institutions. Consumer profile can be used for a lot of illegal activities. 3. Harrahs IT system relies on tracking customer behaviour, right from their playing strategies to their personal information including address and birth date. This raises issues of privacy, particularly when Harrahs can track customers spending patterns on gambling. However, in times of social media, this looks less like a security issue than earlier. 4. The CRM and DB technology implemented will help Harrah's achieve a competitive advantage in the gambling industry. The database technology and customer relationship management software enable Harrah's to maintain sharp customer profiles, analyse its data to identify the most profitable customers, improve its customer service, and offer consistent customer service. The database technology and customer relationship management software cannot address organizational issues, such as the switch from a casino-focus to a customer focus, loss of privacy fears, and gambler exploitation criticisms. So such conditions must be changed. 5. Although Harrah has no history of security breach still it has less or no protection against data theft nor has it installed any security for third party transfers of data. 6. Another privacy issue it can face is that of profiling. Observance of patterns over the received data although very helpful may also result in huge loss as human behaviour changes. Other factors also influence their moods.