NSU H.

Wayne Huizenga School of Business & Entrepreneurship

Assignment for Course: (MKT 5017 Delivering Superior Customer Value) Submitted to: Dr. William C. Johnson Diego A. Echeverri Submitted by: N00529639 729 S. Columbus Street, Alexandria, VA 22314 202-643-8885

Date of Submission: 11/03/13 Title of Assignment: Harrahs Case Study Customer Value Funnel

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Case Analysis 1 Publix Customer Value Funnel questions #1 and #2 3. Explain how the focal organization (level 3) creates value for its customers. What strategic changes are required to deliver outstanding value to its customers? According to Weinstein the price and image express value to potential customers. Harrahs creates value for its customers in a different way than its competitors, which is why Harrahs is so successful. They focus on maximizing value by using the latest technology and customer focused practices to achieve superior customer relationships and operational superiority. Harrahs objective is to maximize value over time, realizing that their customer values have a major impact on both business processes and performance. This allows Harrahs to compete effectively in dynamic and in a volatile market. According to the case study Harrah's name has become synonymous with customer focused, high quality casino entertainment in more locations than any other competitor in its industry. The case study also asserts that Harrahs achieves its mission through operational excellence and technological leadership, which enables Harrahs to manage each customer relationship individually. This individualized approach to customers is while less flashy than its competitors, they have turned personalized customer service into a science that induces people to play longer and spend more money. They have a Visa card for members and a gambling status levels that give cardholders higher levels of service. Harrahs business performance is built on a dual foundation of value concepts. The first is of anticipation of the relevant values of its customers. Evidence of this is the fact that they are the most geographically diverse casino company allowing their customers to easily arrive to one of their casinos through their multi-market strategy. The

second is maximization of value by using knowledge and data applied throughout the organizations practices to better serve its target customers. According to the case study, by using their data and technology Harrahs realized that 26% of their gamblers accounted for 82% of their revenues. Harrahs also discovered that happy customers are more loyal. They use data to calculate a gamblers pain point and they gift them something as an impetus for that gambler to continue gambling, and alleviate the pain of losing thereby also keeping them in the casino. Also, Harrah's staff are given points based on customer satisfaction surveys that they can redeem through a website for products. The case study also states that Harrah's C-suite executives have their compensation pegged to customer service scores. This is a big motivator for employees to perform and to keep customers happy, which in turn affects revenue. Level three of the CVF is the Organization level that includes stakeholders, business culture, organizational structure, strategies, and value providers. (Weinstein, 2012) Harrahs culture, structure, and strategies as reflected by the aforementioned information demonstrate how the casino giant delivers value. While the funnel model represents a downward flow for the most part, with each successive level being a component of the level above. (Weinstein, 2012) The feedback loops evidenced in levels III demonstrate that gaining market intelligence such as data on changing habits such as decreased gambling by younger people, or an aversion to card games and tendency of more patrons to play slots, and all this knowledge is an ongoing, iterative, interactive, and integrated process. Harrahs has demonstrated a excellent application of this level of the Customer Value Funnel.

Considering that younger generations are not playing card games as much, and the growth of the internet and mobile gaming, it would behoove Harrahs/Caesars to confront MGM Mirage in these new markets. The case study describes an online gaming acquisition by Harrahs and this is the right direction. It may also make sense to explore using Bitcoins and servers overseas to circumvent restrictions. The lobbyists who took advantage of New Jersey in a post Hurricane Sandy condition to push the online Casino bill after it was vetoed by Governor Christie in 2011, were very smart to propose it again. As the framework illustrates, organizations must deal with a set of macro issues as well as customer-specific concerns to excel in business. (Weinstein, 2012) According to NJ.com the legislation received bipartisan approval of the legislature in February of 2013 and would increase casino revenue from $235 million to $436 million. (Hutchins, 2013) The customer value funnel offers executives a tool to help achieve a competitive business edge. (Weinstein, 2012)

4. Do customers (level 4) perceive value as unsatisfactory, satisfactory, or superior? Why? Which attributes do customers value that are not receiving adequate attention by the organization? Perceived value depends on customers assumptions based on several things such as pricing, appearance, and differentiation that create a set of expectations. A cool company has certain expectations that are inherent to the branding, differentiation, and placement. According to our text coolness or "being hip" is an elusive attribute that is based around overall image but assumes that the other value-proposition ingredients (service, quality, and price) are satisfactory to superior. (Weinstein, 2012) Perceived value depends on

expectations and when expectations are met or exceeded customers are satisfied. When expectations are not reached customers are unsatisfied. Competitive differentiation such as the no frills approach of Harrahs helps to taper expectations, therefore giving the company an advantage when they apply their customer relationship management technology and methods. To deliver superior customer value Harrahs is doing it right. Their customer ratings are the highest in the entertainment industry and they are the envy of other companies. This is due to their focus as a company on customer satisfaction and the condition of the market place in which they operate. To compete successfully, organizations must evaluate all pertinent actors and factors in a market. (Weinstein, 2012) Instead of focusing on the whales such as other casinos in the same market Harrahs focus is on the regular gambler. This focus on the regular gambler pays off because it allows the company to exceed a customers expectations therefore increasing delivered value. If the delivered value of a casino exceeds the expectation of customers and its perceived value, positive net transaction experiences result and this leads to ongoing satisfaction and increased customer loyalty. The CVF approach is a valuable tool for understanding and assessing business dynamics and situations. (Weinstein, 2012) In sum, the customer value funnel offers a tool to help achieve a competitive business edge and competitive advantage. (Weinstein, 2012) Harrahs demonstrates how this works consistently

References: Weinstein, A. (2012) Superior Customer Value: Strategies for Winning and Retaining Customers, Third Edition. Kindle Edition. Hutchins, R. (February 26, 2013) Gov. Christie signs Internet gambling into law. NJ.com Retrieved from: http://www.nj.com/politics/index.ssf/2013/02/gov_christie_signs_internet_ga.html