Ethical implications of marketing gambling services in Australian pubs

¶ … marketing mix pubs entice gamblers? 2. Ethical issues marketing pubs, impacts individuals, groups society a . The answers specific case situation. CASE STUDY: Drinking gambling: What core business pubs? Introduction Known slot machines world, 'pokies' a business continues grow Australia.

Setting the context

The gambling industry is often associated with the large American casinos, which attract wealthy individuals from across the globe, and which are luxurious and enticing. These casinos integrate the entire gambling act in an overall greater experience of luxury and elegance.

But the industry of gambling has suffered some notable changes throughout the past recent years, in the meaning that it became more accessible to the average consumer. Nowadays then, gambling occurs in corner street pubs all over Australia, normally through slot machines (pokies) and the phenomenon raises some notable social issues. For instance, the people most affected by financial loses as a result of pokies are the people who are already lest economically developed. Then, the pubs manage to attract more and more people by combining gambling with family entertainment and facilities.

In such a context, a discussion can be launched relative to the ethics of gambling in pubs and the impact this action generates on the individual, the group and the society as a whole. Still, before launching such a discussion, it is first useful to understand the mirage of pokies as it is created by the marketing specialists. In other words, the first issue to be addressed is represented by the marketing mix used by pubs to appeal to gambling customers.

2. The marketing mix of gambling pubs

The marketing mix, or the four Ps of marketing, is one of the most powerful and useful marketing tools and it is normally used to identify the characteristics of a product in order to help create points of difference for the respective item. The four dimensions of the marketing mix are as follows:

The product

The price

The place, and The promotions.

The following lines seek to apply the tool of the marketing mix to the gambling pubs in Australia in order to better explain their appeal to customers. At the first level, the product characteristics refer to the following:

The product promoted represents a service in essence, rather than a material item. It is characterized by a gambling situation in which the customer plays the slot machines in hopes of winning more money than they had put in.

The scope of the service is a combination of entertainment and hopes of winning, exploiting as such the optimism of the gamblers.

The gambling service also integrates entertainment in the mix, such as sounds, design and lights in order to enhance the appeal of the experience.

The pubs provide complementary services to the gamblers, such as dinning possibilities or beverages; serving alcoholic beverages is limited by licenses but these pubs are also more successful.

An important complementary service provided by the pubs is represented by the family area, where families can have dinner, the children can be put to play in the special area and the parent can gamble at the pokies.

The service is delivered in such a manner that it does not require packaging, warranty or specific accessories.

At the level of the pricing strategy, this is one not disclosed by the gambling producers, but it is expected to be a penetration pricing strategy. Through this, the prices of the gambling services would be decreased in comparison to the initial cost of providing the service. At the level of the cost, emphasis is placed on the cost of the machine, which is normally obtained through partnerships with the corporate owners of the pokies.

The cost per unit of service then is decreased, but the revenues of the pubs and the slot machine owners are increased due to the large volumes of purchase. For pubs for instance, the recent years have revealed a higher growth rate for pokies revenues than from the retail of alcoholic and non-alcoholic beverages -- the primary activity of the pubs (case).

In terms of the distribution decisions, these traditionally see that the gambling service is provided within the setting of the pub. The service is not a mobile one and it cannot be delivered, but the customers come to the pub to play on the pokies. At a secondary level, it has to be noted that the slot machines are owned by larger size corporations, such as Woolworths, and that these corporations send the pokies to the pubs and manage them (empty them and share the revenues with the pub owners).

Last, at the level of the promotional operations, these are more intricate efforts since advertising gambling is regulated by the legislation. This virtually means that promotion of gambling is usually done in house, or within the facility of the pub. At this level, emphasis is placed on the setting of the pokies in an enticing ambiance, the satisfaction of the customer in the respective setting or the provision of complementary services (as revealed throughout the product section).

4. Conclusions

Gambling is gaining more and more momentum due to the desperation of the people and their hopes of gains, but also due to the fact that the industry is making gambling more accessible to everyone. The popularization of gambling is the result of intense marketing activities, which aim to increase the appeal of gambling to the customers. The industry is fueled by high profitability projections, yet it is also blamed through several ethical standpoints.

References:

Collins, P. (2003). Gambling and the public interest. Greenwood Publishing Group.

McMillen, J. (1996). Gambling cultures. Routledge.

2012. Gambling is still recession proof. BBC. http://news.bbc.co.uk/today/hi/today/newsid_9703000/9703980.stm accessed on October 19, 2012

2010. Marketing mix. Net MBA. http://www.netmba.com/marketing/mix / accessed on October 19, 2012

Drinking or gambling: what is the core business of pubs.