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(Graphics not included) In casino marketing practice, sometimes it is not easy to distinguish which measure should
be regarded as lowering price and which measure should be regarded as increasing cost. For
example, when a casino provides comps to its customers, is it a pricing measure or a costing
measure? Of course it is not important for casino managers or accountants to clarify such
conceptual differences. However, it is very important for economists because the theoretical
instruments that economists can handily use are almost all derived from other ordinary industries
where price is something that is related to consumers’ demand and cost is something that is
related to an enterprise’s profitability. Therefore, in order to be able to clearly draw a marginal
revenue curve and a marginal cost curve for the casino industry so as to clearly know where
the equilibrium is, we have to make a clear definition: all marketing measures a casino adopts
are increasing its cost except for those directly lowering down its house advantage. Just by
this definition, the marginal revenue curve of the VIP sector in this model exhibits a flat line
in parallel with the X axis, which implies, within the VIP-room contractual system, that the
casino never uses house advantage as a marketing tool. Instead, all the marketing measures it
takes are not actually marketing the customers, but marketing the customer recruiters, so it is
only related to cost.
In terms of marginal cost curve, there are also some meaningful figural differences between
the two casino sectors. The marginal cost curve of the walk-in sector shows a “U-turn” figure.
This can be explained by this fact: Macao is not an ideal tourist destination. The number of
walk-in customers is basically an exogenous variable. v Once the walk-in customers are fully
employed, in order to draw more walk-in customers, the marginal cost will go up drastically
and suddenly unless the external market situation has a significant improvement, and unless
Macao, as a tourist destination, improves significantly. By contrast, the marginal cost curve
of the VIP sector is much flatter although it is also increasing, which reflects such a reality:
to some extent, the VIP market is unlimited and recruiters can go anywhere in the world to
recruit customers. However, the longer their action radius is, the more the casino has to pay
for additional customers. This is truly happening within Macao’s VIP-room system. SJM has
some “marginal” VIP rooms. The casino pays higher dead chip commission to and/or requires
lower deposit from the VIP-room contractors because their target markets or major customer
Social exchange theory. What is real is real in its consequences, per W.I. Thomas. If residents in close proximity to a casino perceive themselves as benefitting from gaming then they are likely to view the casino as positive on their environment, if they perceive themselves as incurring costs or being victim to crime they are likely to view it as negative. Some communities report two-fold increase in the social worker case loads, and an ongoing demand existing f...
increases, but it is far more understandable when considering all the reasons for these increases.
Cost-plus pricing, it the industry pricing standard, and is a method to determine a price of the product by finding the cost per unit and then including a mark-up
The basic system of just about every casino is that of the tables (including Roulette, Blackjack and Craps) filling the center of the room with computerized machines (including slots and video poker) that don’t need much tending to surrounding the area. Also, in many casinos there is a second floor surrounding the perimeter of the building with balconies everywhere so the main floor is still the center of attention. This setup brings the eye of casino patrons, wherever they may be, to the center of the casino. This strategic arrangement plays with the fact of human nature being drawn to the center of the action. Coincidentally, or not, the games in the center of the casinos are always the games where people often spend the most money. By chance if your eye isn’t drawn then perhaps the shrill of people winning will bring your attention. Don’t be fooled though, house advantage is always higher than...
Gambling in the industry is fast-growing, multi-million industry in the United States. Gambling could also be traced back to the “Wild, Wild, West.” Gambling is not uncommon at root of many saloon gunfights...
This alternative also involves the reduction of costs, the details of which have not been
Still, there is no permanence in the market price hike above the natural price caused by demand however abundant demand can be. The value will always depend on the expenses of its production, which includes profits to producers. Therefore, the factors that change permanent price in the expenses of production, and their relationship with demand are prime subjects of study.
Three concepts that can be applied to this question are elasticity of demand, cost-benefit analysis, and Keynesian economics. Elasticity of demand has to do with price change, and the sensitivity level that is associated with certain price changes. Generally, when the price of a product goes up, people do not demand as much as this product as they did before. The magnitude of how much the demand rises or drops due to price change is the elasticity. As for cost and benefits, it is understood that in economics, a company is to begin and proceed with their production as long as the costs do not outweigh the benefits. An analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs is an integral part of every company, and this concept can also be app...
price of that good and service, and an increase in supply of a good or
Most of the industry growth continues to be in the transient market. Cutbacks in business and government spending have held back the growth of the group and business markets, however, they are expected to continue to increase. Many in the hotel industry have taken on the addition of fees to increase revenues for such services as safes, parking and business centers.
The pricing of the casino has to be elevated in different levels for the costumers. Each gaming table has different prices to play and to have payback. The object is to get more people on the high price tables to if they lose you get more money. The demand for the high price tables is less then the lower priced gaming options, but more money is generated from the higher gaming options because more money is played with.
Price Elasticity is the measure in responsiveness of consumers to changes in the price of a product or service. The evaluation and consideration of this measure is a useful tool in firms making decisions about pricing and production, and in governments making decisions about revenue and regulation. “Price Elasticity is impacted by measurable factors that allow managers to understand demand and pricing for their product or service; including the availability of substitutes, the consumer budgets for the product or service, and the time period for demand adjustments.” The proper consideration of Price Elasticity allows managers to set pricing such that the effect on Total Revenue is predictable and adjustments to production are timely. The concept of Price Elasticity is employed in the management of commercial firms and government.
... Also important is the price of complements, or goods that are used together. When the price of gasoline rises, the demand for cars falls.
In our society today the Casino Industry is a gambling medium of entertainment for adults. Casinos have become a major aspect of different cities economies and hundreds of thousands of people’s lives. Casinos are exciting and a great experience for many people who feel they have a chance to win it big. Atlantic City and Las Vegas are two of the popular venues for gambling in the United States of America. The way in which this industry was externally set up is so strategically plan out that it allowed the industry to become very successful. The demographic characteristics make up of the Casino industry is a valuable to the industry to know the people who they demographically trending towards and also the public and local government when they decide if they should allow or not allow casino gambling in their area.
“For example, if the organisation decide to expand, fixed costs will definitely increase. Sometimes, organisations decide to reduce certain fixed costs to improve their cash flow, by moving to a less expensive workplace or reducing the number of employees”.