Las Vegas Case Study
Overview of Las Vegas & LVCVA Most people might not even think of Las Vegas as a “product”, or even they think of it as a brand. Places are included in the concept of product. Places could be cities, states, regions, or entire nations. Place marketing involves marketing strategies which contribute to create, maintain and change attitudes and behavior towards particular places. Behind the scenes, the image of Las Vegas is created and maintained by LVCVA, Las Vegas Convention and Visitors Authority.
LVCVA is a private-public agency with the mission statement of “To attract visitors by promoting Las Vegas as the world’s most desirable destination for leisure and business travel. ” Las Vegas has a perception in people’s minds as “Sin City” for long time, a town full of smoke-filled casinos, bawdy all-girl revues and no-wait weddings. LVCVA wants to broaden the segment of their tourists and reposition the image of Vegas. Some family oriented facilities were added in the 1990s. However, this family image did not seem to accomplish LVCVA’s purpose.
While they are still struggling with a better positioning, the dramatic decline of tourism due to the 9/11 attack forced them to proclaim Las Vegas as a destination of adults. The new Vegas has reinvented itself as a luxury and gaming destination with classy resort hotels & casinos, shopping malls with luxury goods, first-run entertainment & world-renowned restaurants. LVCVA figured that Vegas is more than an assortment of facilities and amenities and what truly attracts tourists is the “Las Vegas experience” – the adult freedom.
The phase “What happens here, stays here” was created to capture the essence of the Las Vegas experience. The campaign went very well and the tourism industry rose dramatically. Moreover, this thoughtful brand image has been well established because Las Vegas was named as the number two hottest brand by brand consultancy Landor Associate. Unfortunately, the recent recession hit Las Vegas tourism industry badly. The natured, naughty, indulgent image of Las Vegas has had a negative impact during the recession.
Especially followed by President Obama’s statement, Las Vegas became a less attractive destination for business and leisure travelers. LVCVA made attempts to reposition Vegas as “affordable” and “well-desired” to target hard working Americans. But this positioning is less convincing to people with the perception of the well-established image of Vegas. Although a slow recovery has appeared in the past year, the figures are not the same compared to the time before the recession. SWOT Analysis Strengths:
Las Vegas has well positioned itself as a destination of adult freedom which differentiates itself from other states around the nation. Moreover, LVCVA concentrates on the total experiences of the tourists and promote Las Vegas as the best place to travel where tourists would do things that they don’t normally do at their home town. The world-wide brand image of Las Vegas strengthens its position in the tourism industry. The presence of Las Vegas in the global tourism industry is still growing.
Especially, Las Vegas was established by various consumption-oriented industries where gaming, tourism, business convention and luxury retailing take place. Also, many illegal activities within the nation are legal in Las Vegas such as gambling and prostitution. The “luxury” image attracts many affluent parties to visit Las Vegas which contributes to a big part of the revenue. Weaknesses: Although the large consumption-oriented industry provides huge profits for Las Vegas, it has also made the state more susceptible to extreme volatility and recession.
During the recession, leisure travelers are aware of their spending as well as reducing their travel expenses. The naughty and indulgent image of Las Vegas does not play very well to attract business travelers. In addition, the city has neglected the importance of technology and knowledge-based business companies or factories in which other states are well established. The consumption-oriented industries concentration makes Las Vegas less competitive to attract these business companies. Opportunities: The excellent global presence of Las Vegas is a great opportunity to attract tourists outside of the nation.
Most importantly, international travelers are most likely to stay longer than travelers from other states. Longer stays would involve more spending and activities; Thus, revenues for the state. Moreover, the income and activities in China are growing rapidly in recent years. As the income of the Chinese increase, they will want to travel outside of China. Therefore, Chinese travelers would be a great target segment for Vegas. In addition, many companies now use social media and apps to create customer relationships and solutions to better serve their customers.
Innovation in technology for the casino business would be another opportunity to attract tourists or gamers. Threats: The existing image will be an issue to project a full recovery after the recession. The buying pattern has changed since the recession, the glamour and luxury image of Las Vegas does not fit the current economic situation and the current consumers’ desired perception. Moreover, unstable oil prices are a threat to Las Vegas which depends majorly on the tourism industry. Rising oil prices will result in higher airfare which reduces both business and leisure travelers.
In addition, many states are considering legalize gambling to increase their revenue and that could pose a threat to Las Vegas’s privilege. Case Analysis The most important factor in the tourism industry is the tourists’ travelling experience. It is the experiences that travelers gain while they are travelling. LVCVA understands that they are not just selling Las Vegas; they are selling the “Las Vegas Experience” – the adult freedom. By talking to their old and potential customers, they learned the core customer value. The Vegas visitors want to feel a little naughtier and less inhibited and that is what their customers are buying.
To accommodate the benefits the customers are seeking, the actual services and products are provided to the satisfaction of the visitors. Various product features of Las Vegas were produced to target the adult such as casinos, luxury retailers, world-renowned restaurants and five-star hotels. Branding is another strategy LVCVA used to deliver the core customer value. By spending $75 million for ad campaigns, LVCVA successfully boosted the brand message educating consumers of the “products” Vegas are selling. “Only Vegas: What happens here, stay here” became the now-familiar catchphrase of Las Vegas.
This image has replaced the long pervasive image of “Sin City” to a luxury and indulgent image. Although this image has been adjusted to “affordable” and “well-deserved” during the recession, but the “Las Vegas Experience” brand image still maintains a consistent meaning to consumers. As research indicated, people still demand the same Vegas they’ve known and loved will still be there during hard economic times. This proves the strength of the Vegas brand image which provides its consumers a consistent meaning and helps them identify the products that benefits them.
On the other hand, to manage the brand image, LVCVA also built an augmented product by constantly surveying their previous and potential customers of their Vegas travel experiences. Support service was designed to periodically assess the value of their products offering and brand experiences to obtain feedback and new ideas for future offerings. Because of the constant research and surveys, LVCVA was able to react quickly with their repositioning as well as maintain product benefits to the customers. The most powerful brand positioning builds around strong consumer beliefs and values.
However, one-sided brand positioning became a detriment as Las Vegas moves forward. Although the strong brand experience has boosted the presence of Vegas around the world, it also destroys other economic opportunities for the city and makes the city difficult to react during economic changes. When marketing a city, a diverse objective would be beneficial. And it will create flexibility in the city when facing economic changes. A diverse objective is not just concentrating on developing the global tourist and business visitor industries; it will work on attracting different types of companies and businesses.
It is because the ever changing external environment makes place marketing a most challenging task. To compete effectively in this current rapidly changing environment, a flexible and proactive real marketing approach must be developed. As a result, the one-sided marketing approach for Las Vegas will have a negative impact when the city moves forward. A real marketing approach must be constantly evaluated and reacts to the current environment. Also, fresh ideas and attractions are needed to maintain the current and potential customers.
Therefore, the most recent efforts by the LVCVA will not continue to work since the consumers’ buying habits have changed and the revenue figures will not recover back to the 2007 peak time based on their recent efforts. Most importantly, the efforts are not contributing to the long-term strategy which should be created to adapt to the rapidly changing environment. A diverse marketing approach would require LVCVA to attract international and local companies to their offices in Las Vegas. These companies will provide ob growth and business travelers to Vegas. By diversify its industrial base; the city will find it easier to undergo economic downturn compared to just concentrating on consumption-oriented industries. LVCVA should create a set of marketing tools to increase the percentage of international visitors. Spending from international visitors will contribute to a big part of revenues in the future if the city can gain support from the government policies to ease travel restrictions and make getting a visa more easily available for foreigners.
Opening the door for international visitors will create more job opportunities to immigrants who speak other languages besides English. Also, the city should encourage their citizens to learn a second language and that could possibly create a business opportunity for private language schools. In addition, LVCVA could attract parties to hold international trade shows and conventions in the city. Innovative ideas are also needed to maintain the current products and services offered in Las Vegas. Smartphones are widely used by individuals.
Therefore, a technology wise city could be very favorable for modern citizens. Casinos could create apps to better serve their customers while they are gambling or offer free Wi-Fi in Casinos. The “Las Vegas Experiences” provide a great brand experience to the consumers. However, branding is pervasive but functional products and services are not. Las Vegas should provide a consistent image as well as consistent innovative products and services offerings for their consumers. Just like Disneyland will produce new rides or re-decorate the theme parks for holidays.
Products and services could be renewed or add new ones to recapture the return of previous visitors and attract potential visitors. As Ralenkotter mentioned “History has shown that new properties increase visitation across the board”. Although CityCenter might affect the image of Las Vegas, it is one of the attempts to renew the appearance of this place. Las Vegas is still down from the 2007 peak but their brand image is still strong in consumers’ minds. And that represents its ability to face the upcoming challenges and changes.