Marketing Strategy Analysis – Landsloterij N.V.

1. Introduction

For the purpose of this paper regarding the module of Strategic Marketing for the course Master Business Administration, a local company or industry Marketing Strategy must been analyze. I had chosen to analyze the Marketing Strategy of the Landslotterij N.V., to determine what the Marketing Strategy uses are. To be able to analyze the Marketing Strategy of Landslotterij it is important to understanding what type of organization The Landslotterij N.V is. The Landslotterij N.V is a lottery game that does not require specific knowledge, unlike other gambling activities like sports betting or casino table games. Tickets are relatively inexpensive and can be purchased at a large number of retail on street or store.

This simple, cheap and widely accessible nature makes lottery gambling much more popular than other forms of gambling and therefore lottery participation rates are expected to be higher than for other types of gambling. Although the basic rules are the same, modern lotteries include many different formats and may be known by different names in different countries. The main lottery formats are: draw (passive) lotteries, where tickets are pre-numbered and prizes are set in advance, so the role of the player is limited to of numbers which are entered into the draw and winners are determined by a randomly determined set of numbers. In Curacao we know Landslotterij as a National Lottery in the word of mouth “biechi” that is be operate by the government. Ticket are be sold by more than 800 resellers, with their daily present in the street, neighborhood and store of Curacao, The Landslotterij has become a phenomenon that is familiar to everyone. In order to conduct this assignment the Marketing Strategy of the Landslotterij has been analyze base on the following points:

• Segmentation, Targeting & Positioning
• The 8 P`s

The problem statement that we will address in this paper is as follow; To what extent does Landslotterij perform in a modern marketing? The findings of this assignment will mention in the conclusion and recommendation.

The Landsloterij N.V. Mission is as Follow: The Landsloterij N.A. is a market-driven organization with pro-active and innovative marketing strategy, has highly skilled and motivated staff to continually improve the organization and its service to the public. The aim is to gain new customers and maintain its current customers. The revenues should be allocated to support social projects for the development and social well-being of the society.

2. Background Information

In the year 1797 the National Lottery was founded under the administration of the De Veer. Due to lot of problem and lack of interest the National Lottery was discontinued. In the 19th century the raffling became a popular phenomenon in Curacao. So the National Lottery was an issue. The National Lottery that we know in Curacao as Landslotterij in the new era was founded in 1949. The governments had implements tax and regulation act to regulated the gambling on the islands of the of former Nederlands Antilles (Gibbes, F.E., Ree-Zimmerman van, C.A., & Soriwaner, M.A. 2007). According to Clotfelter, C. and Cook, P. (1987) Lottery can be describe as a gambling based on the drawing of lots, or random numbers, to determine the winner of a prize. Nowadays Lotteries has spread in all over the world. The biggest lottery operations are in Europe, namely Spain United Kingdom, Australia, Ireland and in the most states of the US. The governments operate the lottery, the large sums extracted from consumers can be regarded as an implicit tax on those who choose to gambling. Since lotteries exist all over the world, a large literature on economic aspects of lotteries has developed. Outside the United States, lottery dominates most gambling markets.

In Spain the sales of lottery tickets surpassed 9.4 billion Euros in 2007; this represents over 94% of the revenues generated by games managed by the government in Spain and about a 30% of the all gambling expenditure in Spain (Humphreys, B., & Perez, L. 2012). According to Trousdale, M. A., and Dunn, R. A. (2014) Lottery is an important and growing source of revenue for state, provincial, and national governments. Although the purchase of lottery tickets violates the premises of some economic models (risk aversion, expected wealth maximizing and rational behaviour) lottery probably is the most popular form of gambling in many countries. Risking small sums of money for the chance to win a very large prize attracts many players. So economic analysis provides information about whether the demand for lottery games responds to expected return, as maximizing behaviour predicts, or whether the remote chance of winning a life changing sum is the key feature players take into account.

Lotteries can thus be analysed from either of two economic perspectives: as a source of public revenue or as a consumer commodity. Lin, E. S., and Shih-Ying, W. (2007) conclude that individuals consider direct contributions and indirect contributions via purchasing charitable lotteries as being complementary to each other based on a cross-sectional data set from Canada. Their results imply that direct contributions may increase with the popularity of charitable lotteries. Taiwan started its first charitable pari-mutual lottery on 16 January 2002, owing to widespread underground lotteries and the need for financial. The Marketing Strategy of Landslotterij N.V is the increase the average sales with at least 20% in the first year and second year and with 15% additionally in third year. The Landslotterij is the biggest supporter of ports charitable causes in the community.

3. Problem Definition

To what extend does Landslotterij N.V performance in a modern Marketing Strategy Before address to this problem statement is important to recall the mission of Landslotterij . The Mission is as Follow: The Landsloterij N.A. is a market-driven organization with pro-active and innovative marketing strategy, has highly skilled and motivated staff to continually improve the organization and its service to the public. The aim is to gain new customers and maintain its current customers. The revenues should be allocated to support social projects for the development and social well-being of the society.

4. Markets Analysis

To analyze how the Landslotterij was performed on the business efficiencies a SWOT analysis was conduct. The Landsloterij is a so-called Public Law Entity, wherein all activities and personal resort under the jurisdiction of the Minister of Finance. The Landsloteriij was founded 1949 and started its operations at times of the Netherlands Antilles. Despite the constitutional changes, first with the “Status aparte” of Aruba (1986) followed by the dismantling of the Netherlands Antilles (2010), the Landsloterij has been able to continue its operations on all the six islands of the former Netherlands Antilles. The Landsloterij strives to maximize the revenues generated by its lotteries, with the aim to maximize the positive contribution to the social development of the local communities.

Therefore the Landsloterij is the only lottery whose proceeds from ticket sales are used to finance socio-economic, charity, arts and science projects. The marketing concept of Landslotterij is one very reserve. Although the Landsloterij possesses great knowledge of its market. After all, it has been operating on this market for almost 66 years. Can be notice that Landslotterij have maintained the same market approach for the last 7 decades. The factors that lead to good or bad sales on the different islands are identified and acted upon. The target market has been primarily determined by the legislation of the former Netherlands Antilles. After the dismantling of the Netherlands Antilles the Landsloterij continued its operations on the islands. The Landsloterij has been able to continue its operations on these islands because they all adopted local lottery laws similar to the “Lansloterijlandsverordening 1949” applicable in times of the Netherlands Antilles. Landslotterij is not facing a direct competition of the same category of gambling on the local area. Where you can buy a ticket for a small amount of money and can win the millionaire prize.

5. The S.W.O.T analysis

To get a better view how the Landslotterij was perform on the market, a S.W.O.T analysis has been conducted.

5.1 Strenghts

The Landsloterij is a reliable and transparent organization meaning that there has never (or at least in recent memory) been any problem regarding to the payout of prizes. In addition the prizes are immediately available so that the winners are paid without any form of delays. On some of the Islands re-sellers do most of the ticket selling. Because the re-sellers are not in service of the Landsloterij, sales method offers all of the advantages of personal selling whilst having a deal whit none of the disadvantages.

5.2  Weaknesses

The Landsloterijverordening sets very strict rules under which the Landsloterij has to operate. Therefore it limits the possibilities of price and prize adjustment as well as the introduction of new prizes and or new attractive forms of lottery. On the other islands not being CuraA§ao the Landsloterij is too dependent of the depot holders and their motivation to induce (more) sales.

5.3 Opportunities

The government recently has launched e serious attack on all forms of illegal lottery. Thereby making the population aware of all sorts of illegal lottery (and gambling) and also sanctioning those who sell illegal forms of lottery The internet provide all kind of opportunities to make a more aggressive Marketing Strategy.

5.4 Threats

Recently other forms of lottery are coming up on the market (e.g. Florida Lotto) Even though Landsloterij has no competitors of exactly the same type its competition comes from the gambling possibilities in general. This means that it has to look at the competition from a broad spectrum. The following are examples of the competition Landsloterij has to face:

• Wega di number Korsow (and thus all the lottery offices);
• Sports betting;
• Casino (specifically with regards to bingo);
• Lotto (Florida and Aruba)

The Landslotterij only offers tickets, “biechi”, at a reasonable price in a bi-weekly drawing. Special prizes are being offered, when someone loses the normal drawing. The buyer gets a second to win one special prize.

6. Marketing Strategy

In this section a description of the marketing strategy that The Landsloterij is aiming for the next three years will be given. The key to the marketing strategy is to focus on the sale of all of the 35.000 ticket produced. The Landslotterij is the only local national lottery and it targets different segment within the communities. Although each segment has its own characteristics and needs, the product offered by the Landslotterij, which is the chance to win a huge amount of money fascinates them.

6.1 Marketing objectives

The marketing objectives of this marketing strategy are to achieve a steady increase in market penetration, retain the current resellers and consumers and to attract new resellers and new consumers. This will lead to higher profit, increasing the possibility for The Landsloterij to make more donations to the community.

6.2 Financial objectives

The financial objective is to increase the profit by the increasing the sale with 20% within the 1st and 2nd year and 15% within the 3rd year. Maintain or increase budget destined for social contribution.

7. Market Segmentation

The profile for the typical buyer of a lottery ticket by the Landsloterij is a very complex one at varies substantially per target market. This variation is due to the size of but most importantly the (multicultural) constellation within the target markets and the changes this constellation has gone true during the years.

7.1 Geographics

The geographic target area coincides with the target markets. This facilitates the approach because the marketing strategy can be easily costumed to the needs of the target and geographic markets. The markets can easily be reached true Internet, television and radio. The total targeted population is approximately 250.000 people.

7.2 Demographics

There are no specific demographic aspects that must be taken into consideration.

• No research has been done on how many males and females buy the lottery tickets, therefore there is no clear difference between female and male lottery buyers. This aspect is the more or less the same on all the islands. Therefore no distinction will be made with regard to gender.
• The average targeted population is between 15 and 64 years old. In Curacao is this according to results of the 2011 Census produced by Central Bureau of Statistics (2012) was this approximately 66.7%. This covers both the young population and the older ones, who are current buyers.

7.3 Behavior factors

• Some resellers has many regular loyal buyers, who have the same number consistently at each drawing.
• There are also light buyers, who buy a ticket on occasion especially with the grand prizes of 1 million and half million.
• The behavior of the buyers is also influenced by the economic situation.

The population of the islands of the former Netherlands Antilles has a very particular gambling culture, driven by a certain form of superstation in witch different life events are interpreted as signals and or predictions of the outcome of the lottery. This translates into the need to have a form of lottery which provides the possibility to win attractive prizes but also is reliable in the sense that one can be certain that won prizes are paid without unnecessary a due. It’s important to realize that the person who buys the ticket sees the lottery as a means to fulfill his or her dreams. Thereby some aspects are very important:

• Transparency: participants have the need to see for themselves how the drawing is done in order to judge for themselves if this was done in a fair way;
• Consistency: participants appreciate the fact that the lottery is consistent meaning that the drawings take place as expected, there are no delays, that the tickets are easily assessable and that the prizes are paid according to what has been advertised;
• Chance (of winning): people are willing to buy tickets as long as they know that thy have a fair and real chance of winning the advertised prizes.

7.4 Target markets

Lottery is being advertised and sold all around the globe. In the digital area in which we live nowadays it is very easy for every one with internet access to purchase a lottery number. The Landslotterij sells the “briechi” only in CuraA§ao, Aruba, St. Maarten and the BES Islands. The total populations of all the islands are approximately 314,860. The advantage of the Landslotterij is that the “briechi” is sold on the local market meaning a greater possibility to win and the price can be claimed immediately by the winner. Furthermore, the “briechi” has become a part of our culture. The target market are current customers of approximately older than 45 years and the young professionals between 25 and 45 years.

8. Conclusion

The Landslotterij has position its’ self by using its experience in the industry and the charities it gives to the community. The Landslotterij uses consumers to resell the “biechi”, which is a local attraction. The Landslotterij gives social contribution to the community. All of this on the contrary of their competitors. The Landslotterij is not using the modern technologies aggressively enough to reach new costumer and retain his customer

8.1 Recommendation

The Landslotterij should create customer awareness over the “briechi” and the profit gained, which in part will be used for social contributions to the community. The landslotterij should make use of their web-site, word by mouth, and advertisements on the social media. The Landslotterijshould advertisements more aggressively through tv-spots; jingles (radio), personal selling, billboards and newspapers. The landslotterij should raise the jackpot prize enable to attract more new buyer and hold the actual customers.

References

1. Borg, M. O., & Stranahan, H. A. (2005). DOES LOTTERY ADVERTISING EXPLOIT DISADVANTAGED AND VULNERABLE MARKETS?. Business Ethics Quarterly, 15(1), 23-35.
2. Blalock, G., Just, D. R., & Simon, D. H. (2007). Hitting the Jackpot or Hitting the Skids: Entertainment, Poverty, and the Demand for State Lotteries. American Journal Of Economics & Sociology, 66(3), 545-570.
3. Gibbes,F.E, Ree-Zimmerman Van, C.A.,&Soriwanee,M.A. (2007).
4. A Real Passion 55 years of Landslotterij Curcao. Vol.1. Willemstad, Curacao: De Curacaosche Courant N.V. Humphreys, B., & Perez, L. (2012).
5. Network externalities in consumer spending on lottery games: evidence from Spain. Empirical Economics, 42(3), 929-945.
6. Lin, E. S., & Shih-Ying, W. (2007). Lottery expenses and charitable contributions - Taiwan's experience. Applied Economics, 39(17), 2241-2251. Perez, L., & Humphreys, B. (2013).
7. THE 'WHO AND WHY' OF LOTTERY: EMPIRICAL HIGHLIGHTS FROM THE SEMINAL ECONOMIC LITERATURE. Journal Of Economic Surveys, 27(5), 915-940.
8. Trousdale, M. A., & Dunn, R. A. (2014). DEMAND FOR LOTTERY GAMBLING: EVALUATING PRICE SENSITIVITY WITH IN A PORTFOLIO OF LOTTERY GAMES. National Tax Journal, 67(3), 595-619.
9. Wagman, L., & Conitzer, V. (2012). Choosing fair lotteries to defeat the competition. International Journal Of Game Theory, 41(1), 91-129. Page 1 | 10

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