Internet Gambling Marketing with The 4Cs framework

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1 Internet Gambling Marketing with The 4Cs framework Matthew Tingchi Liu Loi Hoi Ngan Abstract Although the problems of many dot.com companies, the Internet is here to stay. E-commerce can bring advantages to every business, and there are few large corporations today that do not have e-business initiatives. Internet gambling has brought the new form to the traditional gaming industry and has become the global industry which generates huge profit. Like the other entertainment industry, gaming industry pay much more attention on its marketing strategy. But, the Internet changed the concept and the way of marketing. This article tries to discuss the extension of the traditional marketing 4Ps to non-typical 4Cs in Internet gambling: content, commerce, convenience, and converting to leads. The 4Ps framework still works, but there are further diversification added in the marketing of Internet gambling. Furthermore, it provides several cases to support this argument. This research note is a selective, not a complete, review of researches concerning 4Ps application to Internet gambling field. Key words Internet gambling, marketing, 4Ps, 4Cs 1 Introduction Internet gambling consists of many forms of gambling: casinos (Traditional casino, Native American, Riverboat, etc), horse racing, sport game bet, lotteries. By the Internet technology and advanced payment mechanism, Internet gambling and e-casino can accept customer s bet from any countries through the credit card and virtual account. So, Internet gambling has achieved rapid growth rate in recent years. Manufacturing may have been stagnating for decades, but there is one UK industry that has been sweeping all before it. Gambling has increased its turn over from 207 million in 1964 to 7.4 billion in 2002 after allowing for inflation (The Guardian, 2004). Internet gambling is a new form of gaming industry which can be said totally different from the traditional gaming industry in the location, organization, financing and marketing. Due to the complexity of the issue in Internet gambling, this paper will focuses only on the marketing of Internet gambling. 2 The Traditional Marketing Theory When we introduce a product to market, four basic questions are usually considered: (1). what is the product you intend market? (2). where is the place it will be sold? (3). how will you implement the promotion of the product/service? (4). and finally, what is the price the product will be sold at? These commonly used objectives are called the 4Ps of marketing (i.e., product, place, promotion and price), which is helpful to define marketers marketing strategy. It is really a simple way to understand the marketing mix, the things a marketer can change in his marketing plan (McCarthy, 1960). But when levering the Internet gambling, much more dimensions are required under this Internet industrial context. Internet could also reduce the cost of doing business and offer better pricing through self-service customer portals (Christopher, 1998). We believe the Internet does affect these basic 4Ps and adds a set of its own four correspondent objectives that extends beyond these basic four (Wilson, 1997). We need some extension from the traditional 4Ps to new 4Cs elements in the Internet gambling context. Generally, this is a conceptual paper to do comprehensive analysis of 4Ps under the Internet gambling context. In brief, it is a conceptual paper to do comprehensive analysis of 4Ps under the Internet gambling context and extend the 4Ps through some cases observation.

2 3 Internet Gambling Why we choose the Internet gambling category? Because the Internet casinos are not only seems as powerful as the traditional ones, but influencing players in wider geographic areas without doubt. Internet gambling was frequently considered together with gambling addiction and pathological gambling. Young (1998) noted anonymity, convenience and escape help make Internet alluring as compared with traditional forms of gambling. The American Psychiatric Association (APA) also warned that Internet gambling could be more hazardous than other forms of gambling due to a lack of regulations and the solitary nature of the activity ( APA Issues Advisory on Internet Gambling, 2001). When online bettors are alone in front of their screen, they can bet and get out of control quickly. This was supported by another report revealing the fact that the majority of those with Internet gambling experience had the most serious levels of gambling behaviors, known as level 2 (problematic) and level 3 (pathological 1 ) ( Study: Internet Gambling may indicate more serious problem, 2002). Now being able to access and participate in an activity that comes into home via computers, Griffiths (1999) located possible factors causing the increase in gambling behavior by new media betting: 1) vulnerable individuals could now gamble because of little gate-keeping ; 2) gambling in the workplace was made possible for employees who were given Internet access, and could take place without arousing suspicion; 3) the psychological value of e-cash was perceived to be less than real cash, a phenomenon known as suspension of judgment, temporarily disrupting gamblers financial value system and potentially stimulating further gambling, possibly suggesting that people would gamble more using e-cash than would with real cash; and 4) Internet gambling was perceived to be safer, less intimidating, more anonymous, more fun and more tempting (Griffiths, 2001). On the other hand, several barriers to Internet gambling were also reported by Parke and Griffiths (2001), including (1) the inability to obtain valid credit / debit cards, (2) lack of physical transaction of collection winnings that can be highly rewarding, and (3) social reinforcement being unavailable in Internet gambling. On prevalence of Internet gambling, Griffiths (2001) found that among the 2,098 people in United Kingdom surveyed (918 men and 1,180 women), only 495 of them (24%) were Internet users. The results showed that not a single person gambled regularly on the Internet (i.e., once a week or more) and that only 1% of the Internet users were occasional Internet gamblers (i.e., less than once a week). Results also showed that a further 4% had never gambled but would like to do so, whereas the remaining 95% had never gambled on the Internet and said they were unlikely to do so. Participants age 15 to 19 years (n = 119) were also asked about whether they had ever gambled on the Internet, and if they had whether they had used parents credit card. No one in the sample had done so, although 4% said they would like to. Female participants (n = 1,180) were also asked about their attitudes toward gambling online as compared to gambling in a betting shop. Of those surveyed, 73% said they would never gamble on the Internet. Given that the study was carried out at a time when Internet user was an irregular activity in the United Kingdom (i.e. traditionally most people have to pay by the minute for Internet access in U.K., which most likely inhibits use), the research results should be interpreted with great caution. In yet another study by Ialomiteanu and Adlaf (2001) among adults in Ontario, Canada, 5.3% had gambled on the Internet during the past 12 months. Only marital status was significantly related to Internet gambling. Previously married (widowed, divorced) people were significantly more likely to report on-line gambling compared to those who were married or single(10.9% vs. 4.9% and 3.5% respectively). Women were more likely to gamble online than men (6.3% vs. 4.3%). Neither age, regional, educational nor income differences were related to Internet gambling likelihood. 4 The 4Cs of Internet Gambling One of the most stunning aspects of the past few years has been the speed at which the Internet gambling market has expanded and matured. Internet casinos have exploited technological advance and consumer demand to build up the global gambling market on the Internet. This rapid rate of Internet adoption has resulted in an extraordinary pace of change in the marketing landscape- and opened up a variety of opportunities for marketers (Pollack, 1999). The Internet as the primary on-online marketing channel is now overtaking the material off-line gambling. Compared with the traditional form of gambling, like lottery, pari-mutuel and casino, Internet gambling provides a platform to combine 1 See appendix to know the details about pathological gambler.

3 much more types of gambling. Consumer can watch television to bet on his favorite England soccer team and play baccarat with the dealer who can be never seen in the real life at the same time. So, Internet gambling developed their marketing strategy to promote themselves through the Internet. Unlike the typical 4Cs in marketing, consumer s needs, cost, communication, and convenience, we call these the 4Cs of Internet gambling marketing. Reduced to the most basic objectives of an Internet business, they also help define a web site s primary purpose. They are content, commerce, convenience, and converting to leads. Let s look at each of these individually and how they extend the original 4Ps. Content Extends to Product In the first Internet marketing 4Cs, content is an extension of product. Casino gaming provides a virtual gaming environment and intangible service. The content of service includes cyber security and the convenient transaction mechanism. The gambler hopes that Internet gaming will meet the demand for privacy and security, or sometimes just plain work better than alternatives. One of the last bastions of differentiation might be value-added product including content format. Good contents are pluses for its brand image and selling, especially for Internet-related business. Clear and useful information provided on cyberspace will significantly attract targeted customer purchase intentions (like Bingo, Poker, Slots, Lotto, Sports betting, and much more). Besides, useful and relative content information provided by sponsors to customers on web pages could significantly impacts sponsor recall, attitude toward the sponsor, and purchase intentions (Shelly, 2003). Commerce Is the Place to have fun Internet space is a separate world that has its own set of protocols and rules for communications, but will remain within the constraints of a physical world. Its mere existence still requires people and the traditional operate support mechanisms. Although in some specific scenario setting, consumers have similar gambling behaviors in casinos, there are different tendency of their attitudes. It s not easy to satisfy all customers needs in a single casino, but Internet can make it more possible via a single virtual platform. Convenience Will Affect Price Quick and multiple ways to access Internet account is becoming a requirement in an information society, especially for online gamblers. Time saving is not only one of the most concerning factors for customers to purchase with traditional channel (Hansen and Deutscher, 1978), but also with Internet (Achrol and Kotler, 1999; La Ferle, Edwards, and Lee, 2000). The old adage that time is money has a new characteristic in the hyper-productive orientated business world and that is saving time is priceless. The more direct support of time saving, a higher pricing model will be required. In this third C of the Internet marketing 4Cs, providing superior convenience can reduce costs and allow improved pricing dynamics. Online casino has to exam its Internet business providing convenience to help manage pricing constraints or extended service. Online casino can not provide many free services (shuttle bus, hotel coupon, Les Vegas show ticket) or benefits (cigarette, beverage and snack) like real ones, but they still try to provide many convenient ways (e.g. low interest and instant loan, credit cars service, speedy and stable web bandwidth) to stimulate consumption. The more convenience the online casino provide, the more possibilities they may earn from consumers. Converting Leads Is the Next Level of Promotion

4 As large and expansive as the online casino is, the Internet is staggering and its growth in adoption is unmatched as a new communication medium. The Internet is not just another promotion channel similar to print ads or television. It may share some commonalities, but has one unique attribute - interactivity. While other mediums all talk to the customer, the Internet enables dialog with a customer. As online casino promotes its brand or service when a connection is made, the Internet allows you to interact with that prospective customer and convert them to a lead. In the last of the Internet marketing 4Cs, converting leads is about turning passive awareness into active interest. Using a variety of web draw mechanisms such as advertising or search engine marketing, a lead conversion is about filtering through the web traffic to help qualify and identify those visitors who are the right prospects that have aligned themselves to your offerings. 5 Conclusions Gambling has long been one of the most popular entertainments for the people in greater China areas (including Hong Kong, Macau, and Taiwan). With well-management and sophisticate-designed relevant rules, it could be a good business. For Internet gambling industry, the 4 Ps are not dead---not even close. Differentiation can still be squeezed from the marketing mix. To win in the marketplace, an intense and intimate knowledge of the customer is required in a way that no competitor can match. That understanding must then be applied in a relentless focus on the elements identified by the customer as most important. A well-rounded Internet business (includes Internet gambling of course) will have aspects of all four of the Cs, but should focus on one or two as their primary business purpose. Balance is necessary, while having a targeted objective will help design your long-term strategy. References [1] Achrol, R.S. and Kotler, P., Marketing in the network economy, Journal of Marketing, 63, 1999: 146~163. [2] APA Issues Advisory on Internet Gambling, Mental Health Weekly, 11(5), 2001: 8. [3] Christopher, M., Strategies for Reducing Cost and Improves Service, Logistics and Supply Chain Management, New Jersey: Prentice Hall, [4] Griffiths, M. D., Gambling technologies: Prospects for problem gambling, Journal of Gambling Studies, 15, 1999: 265~283. [5] Griffiths, M.D., Internet gambling: Preliminary results of the first UK prevalence study. Electronic Journal of Gambling Issues, (Available on: [6] Hansen, R. and Deutscher, T., An empirical investigation of attribute importance in retail store selection, Journal of Retailing, 53 (4), 1978: 59~95. [7] Ialomiteanu, A., and Adlaf, E. Internet gambling among Ontario adults. Electronic Journal of Gambling Issues, (Available on [8] La Ferle, C., Edwards, S.M. and Lee, W., Teens use of traditional media and the Internet, Journal of Advertising Research, 40 (3), 2000: 55~65. [9] McCarthy, J.E., Basic Marketing: A Managerial Approach. Homewood, Irwin Publishing, [10] Pollack, B., The state of Internet marketing-1999, Direct Marketing, 61(9), 1999: 18~21. [11] Shelly, R., The effects of sponsor relevance on consumer reactions to Internet sponsorships, Journal of Advertising, 32 (4), 2003: 66~76. [12] The Guardian, June, 13, 2004: 7. [13] Wilson, R.F., 4 elements of a web marketing philosophy, Web Marketing Today, 1997 (Available on:

5 [14] Young, K., Internet Addiction: The Emergence of a New Clinical Disorder. Cyber Psychology and Behavior, 1-3, 1998: 237~244. [15] Young, K., Internet addiction: Evaluation and treatment. Student British Medical Journal, 7, 1999: 351~352. Appendix This is diagnostic criteria for Pathological Gambling. Persistent and recurrent maladaptive gambling behavior as indicated by five (or more) of the following: 1. is preoccupied with gambling (e.g., preoccupied with reliving past gambling experiences, handicapping or planning the next venture, or thinking of ways to get money with which to gamble); 2. needs to gamble with increasing amounts of money in order to achieve the desired excitement; 3. has repeated unsuccessful efforts to control, cut back, or stop gambling; 4. is restless or irritable when attempting to cut down or stop gambling; 5. gambles as a way of escaping from problems or of relieving a dysphonic mood (e.g., feelings of helplessness, guilt, anxiety, depression); 6. after losing money gambling, often returns another day to get even ("chasing" one s losses); 7. lies to family members, therapist, or others to conceal the extent of involvement with gambling; 8. has committed illegal acts such as forgery, fraud, theft, or embezzlement to finance gambling; 9. has jeopardized or lost a significant relationship, job, or educational or career opportunity because of gambling; 10. relies on others to provide money to relieve a desperate financial situation caused by gambling.