1. Executive Summary

1.1 Brief Summary
While the Trump organization continues the expansion of its entertainment/luxury conglomerate through the recent acquisition of half ownership over the sports entertainment giant The World Wrestling Entertainment (WWE) and its recent entry into the higher-tier water business with its new brand, Trump Ice, it’s Casinos in Atlantic City (AC) do not seem to be doing so well. With increased competition, mounting regulations, and a relatively depressed economy the overall revenue of the Trump Organization’s AC hotels are diminishing, with administration expecting lower market shares in the coming years (“Trump buys raw”, 2009) (“The Trump Brand, 2012) (“Trump Entertainment Resorts, Inc”, 2010) (Bary, A., 2011). The organization’s failure to systematically allocate resources for periodic improvements/updates to these facilities have cost it the inability to attract or retain customers. In fact, just recently the organization relinquished one of its AC properties, The Trump Plaza to its competitor, The Golden Nugget (Wittowski, 2011). This is allocation of resources is critical in an industry where customer retention is correlated to the amount of expenditure and improvements made to the facilities. This slump in the organization competitive performance has been the case for quite some time. The Trump Organization has repeatedly fell at the brink of filing for bankruptcy – due to high leverage, low liquidity, and poor operating performance compared to its competition (Bingham, 2011).

While financial stability has been a problem for the Trump Organization, the company’s AC properties, in particular, seem to have a problem in terms of branding. To be specific, the company should tailor and focus its marketing efforts on upper end customers, as opposed to the conventional strategies of AC which is to try to satisfy customers of all segments. In addition, there seems to be flaws in customer service that management seems to have missed which we will address later on in the report.

Due to the increasingly diminishing performance of this company and the threat of going bankrupt, we believe it is imperative that the company adopt one of the strategies outlined in this report to experience an improvement in terms of operation and competition.

The strategies in this report were made by first assessing the company’s current stance. Secondly, we analyzed the company’s competitors to gain an understanding of the company’s situation and the challenges they face. Thirdly, we took the relevant macro environmental forces into consideration, and finally, we weighted the factors that the recommended target market values. With all these factors considered, we identified our desired position, and then laid out several plans on how to achieve that objective.

Please note that during the making of this report, the most recent financial statements were of the year 2010. We will be retrieving information from those financial statements since they are the most updated. The entire financial report is printed and provided in Appendix A.

This report concludes by providing five alternative strategies, and an alteration to the current marketing mix.

1 Company Overview and Project Focus

2.2 Company Background

The Trump Entertainment Resorts (TER), Inc., is involved in the development, operation and management of gaming facilities in the form of Casino hotels. Their casinos offer both machine and table games. Their amenities are numerous, ranging from shops, to entrainment lounges, to spa and salons, restaurants, bars, fitness centers, their properties also include their own theatres. TER was first established in the year of 1995. However, back then, it was operating under a different name, Trump Hotels & Casino. The name was recently changed to Trump Entertainment Resorts in 2005 (“Trump Entertainment Resorts company profile”, 2010).

2.3 Company Mission

The Trump Taj Mahal Mission Statement Reads as follows, “We Pledge To Provide Our Customers With An Unforgettable Experience In A Unique Gaming Atmosphere. Our Customers Will Enjoy Unparalleled Hospitality, Fun, And excitement Provided By Our Friendly, Well-Trained Employees Who Are Dedicated To Superior Customer Service As Defined By Our Core Standards.

To Support Our Most Valuable Asset, Our Employees, We Will Maintain A Clean Healthy Work Environment. We Encourage Effective Communications, Involvement And Participation. We Reward Winning Attitudes And High Quality Job Performance through Recognition, Growth And Advancement (“Trump Taj Mahal Mission Statement”, n.d.). For a full image print out of the Taj Mahal’s mission as well as the vision, please refer to Appendix H.

2.4 Sources of Competitive Advantage

The sources of competitive advantage for the Trump Entertainment Resorts include the Trump Brand, the experience of management, the loyal Trump customer base, the already-established connections of the Trump Organization, and exclusivity over certain copy rights. These will be explained in greater detail in Section 3.1.5, under the Strength Category.

2.5 Course Project Focus: Three lines about product / service and location

To identify the key areas of strengths and weaknesses for the product relative to competition, and plot out a three year plan on how to capitalize on those strengths, while converting those other weaknesses into strengths.

2.6 Market Opportunity/ Problem Statement:

come up with a problem or opportunity to talk about it.
For many years, the Trump properties have fallen behind relative to competition in the North East region of the United States. In addition to falling behind, the Trump organization has almost filed for bankruptcy numerous times. While access to capital is not a major issue, they do seem to falter in terms of the customer service they provide.

2 Situational Analysis

3.7 Industry Analysis:

3.8.1 The United States Gaming Sector

The industry being analyzed at hand is the US Gaming Market (the specific Atlantic City analysis is in the next section).

Like many other industries, the gaming market industry is subject to cycles. In these cycles, the majority of revenue is collected during the spring and summer seasons. The common practice or approach many of these hotels/resorts undertake us to attempt to appeal with every segment. Many of these hotels own a variety of rooms, ranging from the most luxurious to the most economic (Silva, 2012).

In this industry, business revenue is not limited to booking of rooms and gaming revenue (That is bets that the player did not win back). The sources of income include contracts or agreements to manage other casinos, franchising, online casinos, advertisements on the casino premises, partnering in shows taking place in the premises, renting of stores for gift shops, restaurants or other services, foods and beverages sold, providing incentives for guests to stay longer periods, other hospitality services provided, hosting of large events are all alternative sources of income. These methods fall constitute increasing revenue per branch.

Other more expensive methods include:

Opening a new branch: This includes buying or building a new branch. Through increasing the number of properties being operated many companies hope to obtain a larger market share, and thus obtain revenue. This can have several other benefits. For one, this creates some diversity, geographical diversity (if they were in different locations). If say, a city or a region or a country falls into a recession, another property from another location would be probably be unaffected can probably assists the other property.

3.8.2 Market Size

3.8.3.1 US Gaming Market Size

The gaming industry currently includes 172 businesses with 398,093 individuals employed, and earned a revenue of $52 billion – these numbers apply to the year 2011. The market has also grown at a very slow rate of 0.4% from 2007 to date (“Casino Hotel in US”, 2012).

3.8.3.2 The Atlantic City Gaming Market Size

In this section, we will not be limited to discussing the marketing sector in AC alone, but will take a broader scope, addressing the entire North Eastern region of the US. The reason for this broader view is that a good deal of the revenue these AC Casinos draw are from individuals living outside AC. In fact, many of these visitors plan their trips by comparing alternative resorts in nearby cities or states, so a broader view is needed for this section.

Atlantic City mainly serves as a gaming hub for the Northern Eastern region of the US. The majority of visitors from the states of New York, Pennsylvania, Maryland, and the capital, Washington, D.C. With approximately thirty million potential customers (that is people that are age 21 or above) living within a three-hour drive, the Atlantic City gaming sector is the second largest in the U.S.. Las Vegas is the largest in the United States (“Trump Entertainment Resorts, Inc”, 2010).

Atlantic City currently hosts 12 Casinos, but that number is expected to rise very soon. The revenue of the Atlantic City gaming market in 2010 totaled around $3.6 billion in revenue, a 10% drop from the previous year. According to the most recent Annual Trump Taj Mahal Financial Report, competition in this market is conducted through attempting to provide superior customer service, better facilities, and discounts (“Trump Entertainment Resorts, Inc”, 2010) (Wittowski, 2011). As you will see, this report we emphasize the importance of superior customer service and are opposed to the Trump Taj Mahal carrying out any promotions on the basis of discount to attract customers.

3.8.3 Market Growth

3.8.4.3 US Gaming Market Growth

In this industry, revenue is the gambled amounts retained by the casinos – that is the amounts wagered and lost by the gamblers. The table below helps gain an understanding of the market growth experienced recently (“Gaming Revenue: 10-year trend”, 2012).

As you can see, the gaming market is highly positively correlated with the performance of the economy. As the economy was steadily rising (years 2002 till 2007), the gaming market revenue was climbing as well. Until 2007, when the economy began to plummet, so did revenue in this market (“Gaming Revenue: 10-year trend”, 2012).

*Please note that the numbers in the tables below are pre-tax revenues. Year | Total Industry Revenue ($Billions) | 2002 | 28.07 | 2003 | 28.72 | 2004 | 31.17 | 2005 | 32.77 | 2006 | 35.27 | 2007 | 37.52 | 2008 | 36.22 | 2009 | 34.28 | 2010 | 34.60 | 2011 | 35.64 |
Sources: American Gaming Association, state gaming control boards
Link: http://www.americangaming.org/industry-resources/research/fact-sheets/gaming-revenue-10-year-trends 3.8.4.4 Atlantic City Market Growth
The gaming market sector seemed to have been growing at a healthy pace (2004-2006). Until, 2007, when the effects of the crisis began to show and panic was the prevailing sentimism, the revenue for this market began to dwindle (Sze, 2011, p.2). See table provided in the following page.

Year | Total Revenue | Change in Percentage | 2004 | $4,806,800,604 | - | 2005 | 5,018,276,523 | 4.4 | 2006 | 5,217,713,795 | 4.0 | 2007 | 4,920,786,969 | (5.7) | 2008 | 4,544,960,791 | (7.6) | 2009 | 3,943,171,237 | (13.2) | 2010 | 3,565,047,001 | (9.6) | Average change across these years: | | (4.9) |
Source: New Jersey Casino Control Commission

Since, 2010, the Atlantic City Gaming Market has dropped by 10% during the year 2011, further worsening the conditions for market participants.

While the number of market participants has been increasing (as illustrated in the next section, the market size has been decreasing making this a very risky market.

3.8.4 Market Trends

3.8.5.5 General Trends

As mentioned earlier in the report, and is worth repeating, the performance of the gaming industry/sector is directly related to how well the economy is performing (Silva, 2012). In addition, studies have shown that a typical gambler receives an above average salary – indicating that the general majority of gamblers are likely to gamble or indulge in this leisure activity with their extra money (“Gambling…Who is Gambling?”, 2012). This supports the previous observation that when the economy is generally doing well and people feel relatively economically safe, they’re more likely to gamble, however, when the economy is generally depressed, and people are losing their jobs, they are less likely going to spend on the leisure activities that casinos provide.
This concludes that the general customers are price sensitive, and focusing a good deal on revenue from this segment will very likely cause income to dwindle significantly.

With this information in mind, we can conclude that the industry’s general practice of targeting any potential consumer and not focusing on a particular segment, could be dangerous and very costly especially in distressful economies – when most gamblers go sober (that is, until the economy picks up, again).

3.8.5.6 Recent Trends in the North East Sector (AC Gaming Sector Analysis)

Trump Entertainment Resorts currently owns and runs two casino hotels in Atlantic City, New Jersey. Atlantic city is the second largest gaming in the US. Vegas is the largest (“Trump Entertainment Resorts, Inc”, 2010). The reason Atlantic City is very concentrated with casinos is because neighboring cities and states required relatively high levels of regulations to obtain a gaming license. Recently, however, these cities and states relaxed their restrictions when it comes to entering the gaming market (often this lowering of barriers to entry serves as a means to create new jobs during depressed economies and raise taxes) (Burton, 2012). In addition to decreasing levels of regulations from surrounding markets, Atlantic City’s market regulations have been increasing. This serves as a great disadvantage for a casino, considering it is a building in a fixed location and moving the business to another location may prove quite costly. In addition, with such a depressed economy it is less likely for the general population to gamble - showing. Moreover, it is even less likely for AC casinos to collect revenue since new casinos are sprouting out in more convenient locations.

Competition in Atlantic City is intense and continues to increase due to the decrease in potential gamblers in this depressed economy – that is demand has decreased. In addition to the decrease in demand, there has been an increase in the supply of casinos within Atlantic City and in surrounding cities/states surrounding Atlantic City.

The gaming market is a highly regulated one. And, it is expected that competition will be even more fierce due to the recent of passing of certain state/ government regulations. For instance:

In the year of 2010, The state of Pennsylvania put the what is known as the Table Game Legislation into effect. The reason this adds to the already intense level of competition in AC is that this legislation licenses an additional two hundred and fifty gambling tables for the large casinos (there are twelve of them) – thus increasing supply of gaming in Pennsylvania. This legislation also permits a maximum of fifty new tables at each of the smaller casinos. There are two smaller ones. So, with two hundred and fifty additional tables at twelve casinos and up to fifty new tables at two smaller ones, the supply of available gaming tables in Pennsylvania alone has increased by three thousand and one hundred tables [(250x12) + (50x2) = 3100] (“Trump Entertainment Resorts, Inc”, 2010).

From this, we can expect not only visitors from the state of Pennsylvania to decrease (due to more conveniently located casinos), but also visitors from other cities/states willing to give Pennsylvanian casinos a try). Should Pennsylvania and other states continue to take action in this direction, we can reasonably expect that the negative effect for AC casinos to be magnified – not only for AC casinos but for the entire North Eastern region.

The state of New York has allowed for the introduction of Video Lottery Terminal better known as VLT’s. These VLT’s will be set up at many of the race tracks within the state. In addition, the state of New York has also permitted the opening of new race tracks, some very prestigious, such as the Aqueduct Race Track. To make matters worse for the current participants of this market, the State of New York is also having discussions of allowing more casinos to operate within the state (“Trump Entertainment Resorts, Inc”, 2010). This is expected to have similar effects to that of the state of Pennsylvania.

Native American casinos typically have a greater advantage than other casinos. This is due to their lower exposure to taxes – which allows them to incur less expenses, and hence reinvest that money to their casinos. This is critical considering the gaming industry is one where spending on facilities and updates is positively correlated with attracting and retaining customers. This tax advantage is not limited to Native American casinos alone, but is also applicable to Native American Race Tracks. Therefore, the advantage Native American Casinos enjoy does raise the level of competition in the gaming market. Of course, the introduction of new Native American casinos will likely negatively impact casinos in the region (“Trump Entertainment Resorts, Inc”, 2010).

Similar to the surrounding cities/states, the state of New Jersey has also been and is implementing new laws that is making it increasingly difficult for its casinos in Atlantic City by allowing the opening of new casinos (“Trump Entertainment Resorts, Inc”, 2010). The state of New Jersey hopes to offset increasing competition from neighboring states by raising the number of casino operators in its city of Atlantic City – which is adversely harming its existing participants.

In the previous year, the state of New Jersey has lowered the minimum room number required to open a casino. While the law does allow the opening of smaller casinos, it does require the hotels reach the minimum required within five years of operations. This requirement to grow bigger will likely add to the level of competition experienced by the operators in the region. This law was titled “Boutique” casinos, referring to the smaller size of the casinos (“Trump Entertainment Resorts, Inc”, 2010).

According to the Trump Taj Mahal’s 2010 annual financial report, there are numerous sites nearby to the Trump Taj Mahal that highly likely to become gaming zones for potentially new competition to operate. In addition, to the potentially large sums of land available for gaming, there have been several applications to construct new casino hotels in these zoned locations (“Trump Entertainment Resorts, Inc”, 2010). This, like all the other factors mentioned so far, will likely harm the already active participants of the market.

3.8.5 Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis

The following SWOT analysis for the Trump Taj Mahal’s current situation.

3.8.6.7 Strengths:

3.8.6.8.1 The Trump Brand: Despite frequently almost filing for bankruptcies, the Trump brand is still recognized for its high class service, and the great facilities it develops. However, we suggest the Trump organization uses this brand to demand a premium on their rooms, and target upper tier customers – as opposed to their current strategy of targeting people of all classes.

3.8.6.8.2 Experience: The Trump administration has, on many occasions, succeeded in what many would consider unrivalled quality in terms of real estate development and management of facilities. They seem to have an edge for handling, again, the business of customers at the upper end. This is where the Trump Organization seems to do well and thus need to focus their efforts. They need not get distracted with what is not a sustainable crowd – mid-to-lower tier customers.

3.8.6.8.3 Connections: The Trump company has an already established set of relationships with partners and financers that are confident in their ability. These relationships can be used to capitalize and used in update any unit that seems to fall compared to competition in terms of quality. In addition, these connections can lower the company’s reliance on debt and borrowings.

3.8.6.8.4 An Established Customer Base: Aside, the already solid base of partners and financiers, the Trump organization enjoys its share of customers that recognize its quality service in the many other properties they own and/or manage around the world. This customer base can be used to increase the visits to the Trump Taj Mahal for instance. Of course, this should only be done after the hotel in terms of facilities and services is upgraded. A Customer Relationship Management (CRM) system would be recommended to make it easier on which customers to target.

3.8.6.8.5 Exclusivity: The Trump Organization owns (and partially owns) rights over several top-rated television shows. For instance, the Trump organization owns the Miss USA, the Miss Teen USA, and the Miss Universe beauty pageants. In addition, to these pageants, the Trump Organization owns partial rights to the reality show, The Apprentice. The Trump Organization can have the Trump Taj Mahal host some of these shows. Requiring certain events or episodes of The Apprentice to take place in the Trump Taj Mahal, however, will require negotiation, since the Trump brand does not own complete rights to this show.

3.8.6.8 Weaknesses:

3.8.6.9.6 Slow-reaction: The relatively poor performance of the Trump properties, The trump Taj Mahal, Trump Marina and Trump Plaza (before it was sold), in Atlantic City is no new story. With frequent complaints and criticism on websites such as Trip Advisor.com, with regards to their customer service, one would wonder why the administration did not take corrective action earlier. The Trump administration took drastic action in renovating the Trump Taj and Marina, only after the fall of the once, Trump Plaza. In fact, even after relinquishing the Trump Plaza, thus freeing capital, and under taking renovations, The Trump properties are still ranking relatively low to competition - with their top hotel ranking seventh place in Atlantic City. Seventh place is a disaster considering there are only twelve properties currently operating in Atlantic City, so their top property is in the lower half of the market.

3.8.6.9.7 The Trump Marina: Just like the late Trump Plaza, the Trump Marina also has numerous negative effects on the Trump Taj Mahal. For one, the Trump Marina is relatively old compared to many of the properties operating in Atlantic City. This aging building undermines the prestige the Trump Taj Mahal can potentially convey. In addition, the fact that both The Trump name should not be held by this property. The Trump Organization is known for its top-notch properties and hence having the Trump brand on this property harms the entire Trump portfolio and not just the Trump Taj. In addition, the property is currently not doing so well, and renovating it will be very expensive- so we believe the administration’s holding of this property is occupying them (the administration) from focusing on how to capitalize the Trump Taj to its maximum potential.

3.8.6.9.8 Lack of clear identity: The Indian theme of the Trump Taj Mahal should not in any way be considered a means of differentiation. This is because, every casino hotel in Atlantic City has a theme of its own. The Trump brand in Atlantic City should seek differentiation on what really matters: 1. The Target Customers, and 2. How You Treat Those Target Customers.

3.8.6.9.9.1 The Trump properties should be targeting a sustainable customer base. This customer base must be the upper-tier customer segment. Though the smallest in number, this segment holds and more importantly spends the most – which is what matters most by the end of the day. Also, being a small segment that spends a good deal, adds to the efficiencies of the operations. Another example of a differentiated target customer segment is the gay community – that do not have their own casinos.

3.8.6.9.9.2 The second important element here is How You Treat Your Guests. It is important, probably even more important than the previous point, that the Trump organization masters this aspect of their customer service. The guests are here to have fun (and hope to win some money in the process) but mainly to have fun. And losing money, may adversely diminish that fun, so it is utmost important that the staff that the guests mostly interact with – the dealers in the gaming area- be fun and energetic. They should not be serious, otherwise losing the money may feel serious too. Diminish the seriousness of losing money by making it seem like play –which it is. The guests, especially those that don’t care about losing (upper-tier ones), will love the experience and may, in turn, return for more fun. The Trump Brand needs to be FUN when it comes to gaming not just classy. Classy is easy – all you need is additional capital from partners or a loan, but fun has no price tag, its in how well you choose your People, which is the most important element in services. An even more

3.8.6.9.9.3 Wrong Customer Targeting: As mentioned before in this report, The Trump Administration failed to recognize the risk associated with targeting the middle-to-lower class customers in this volatile environment, where revenue from these two segments is not sustainable. 3.8.6.9.9.4 A poor customer service performance:

3.8.6.9 Opportunities:

3.8.6.10.9 Untapped Target Customers: With the great majority focused on targeting customers of all segments, it is highly unlikely one of them will be the best at serving all of them. Also, with limited capital and relatively dry market with fierce competition – which will only turn more fierce, it is critical that the Trump Organization focuses on what matters (the bottom line), and the target market that adds to that bottom line (The Upper Tier Customers). We warn against conventional wisdom, which is to slash marketing costs in times of crisis. Rather, we advocate focusing you marketing efforts, while everyone is cutting marketing costs. This way, you will be the most reachable to those segments that matter for not only your organization’s survival but also growth.

3.8.6.10.10 The already established Trump Loyal Customers: The Trump Brand has a base of loyal customers that can afford to travel and enjoy the golf courses, restaurants, and real estate developments the organization offers all across the world. It is highly likely that some of these customers are occasional or frequent gamblers. After the necessary improvements are made the Trump Taj should send free 1 week stays at the Taj Mahal for them and their loved ones. This way they have a chance of living the Trump experience – and if satisfied will likely return. This also has the benefit of advertising through the word of mouth – the most effective form of advertising.

3.8.6.10.11 Tourism: With foreign nations turning relatively wealthy, markets merging, and the Dollar losing value, the US may be an attractive tourist destination, at this point in time. In addition, with numerous other nations unaffected by the financial crisis to the same degree as the US, it is highly likely that their citizens’ willingness to spend on leisure activities are not as sensitive – unless there are cultural factors that would otherwise have an opposite effect.

3.8.6.10 Threats:

3.8.6.11.12 The large increase in the number of casinos and racinos in the North Eastern region: There have been increases in the number of casinos permitted to operate in the North Coast region, and there are news and indicators pointing at even greater entry into the gaming market. This threat is highly serious due to its timing. This large inflow of participants comes at a time when revenue is decreasing as a whole, so we can expect less revenue per casino. In addition, to the decrease in the average revenue, it is possible that the new entrants may have enjoy the advantages of updated facilities and architectural structures – this would be difficult for already established casinos to compete with since large scale renovations are usually associated with large costs and complications for any property.

3.8.6.11.13 The increase in the number of tables, slot machines, and other equipments permitted in Casinos and race tracks: Though this does allow the Trump Taj to increase the number of gambling equipments in its own arsenal, it is expected to have an overall negative effect on the operations of the property.

3.8.6.11.14 Tax advantages available to Native American casinos: This does serve as a threat considering Native American casinos are liable to less taxes (thus probably saving billions). This amount saved can be used to aggressively fund greater expansions and upgrades to the properties. And, once again, the reason this is a serious threat is, this is an industry where the amount of spending on facility upgrades is correlated with the retention and attraction of customers.

3.8.6.11.15 Prolonged recession: Should the market remain depressed for prolonged periods, we would expect the hotel & casino to suffer severely unless a turnaround was made.

3.8.6.11.16 Unions: Union demands may change due to worsening conditions in the economy. The demands of the union may rise, if not met they may likely strike. A strike does pose a serious threat, since the entire operations of the casino are reliant on the staff. The hotel & casino cannot run themselves.

3.8.6.11.17 Regulators (very unpredictable): It is very difficult to predict the changes in the new regulations being made by the authorities. This unpredictability makes it difficult to plan ahead, and almost impossible to carry a plan through as planned. Another danger here is the likelihood of mounting paper work for the company which may not only slow the processing of certain tasks but also pose unwanted expenses on the business.

3.8.6 Competition

As illustrated in this report, sometimes racetrack casino, also known as racinos have an effect on the revenues of a Casino in another city – however, the effect is limited. Small casinos, also known as boutique casinos, can also have some effect but they do not act as substitutes.

To gain a better understanding of the competitors in the market, and filter those that do not pose a serious threat, we have grouped them into three main categories.

3.8.7.11 Direct Competition: This segment includes any large size hotel & casino in the North East region of the United States. The reason this segment is not restricted to those casinos operating in Atlantic City is due to the fact that a good deal of the revenue these large casinos draw are from visitors or people taking a trip from outside the city. Many customers are willing to take a three hour drive for an exciting week or weekend at one of these large resorts. So the fact that large-scale casinos are acting on a regional scale means that any large operator may be considered a substitute and is hence a direct competitor.

3.8.7.12 Indirect Competition: This section includes segments that are largely related to but do not completely substitute the need for or service provided by large scale casinos such as the Trump Taj Mahal. This segment includes, online casinos, racetrack casinos “racinos”, and and small-sized casinos, also known as boutique casinos.

3.8.7.13 Generic Competition: This segment poses no serious threat. It includes motels and non-casino hotels.

In this section, we will focus our attention at the direct competitors, since they pose the greatest threat to the Trump Taj Mahal.

We will analyze the strengths and weaknesses of three hotels that we believe represent the rest of the majority of direct competitors in the region.

3.8.7.14 MGM Resorts International:
This company was selected for two main reasons: 1. It is very large competitor not just in the North East region, but in the gaming industry worldwide. In fact, it is the second largest gaming company in the world by revenue (“MGM Grand Hotel..”, 2012). The second reason we selected this company was that it enjoys the same advantages Native American casino typically enjoy –thus representing Native American casinos in the region.

Strengths:

A Recognized Brand: The MGM Resorts enjoy a very well known brand that is recognized for its superior services in the hospitality industry.

Availability of large capital: Being the second largest player in the gaming worldwide, we belive MGM has access to sufficient capital (if not through equity, then through leverage) should it find an opportunity it considers worth capturing.

Experience: You don’t make it and sustain your position as the second best worldwide by accident, at least that’s very unlikely. We believe that the administration has the necessary to experience to overcome many, if not most, of the problems that a casino may face in this industry, in terms of regulation, economy, sustainability, and even competition.

Tax Breaks: Like all Native American casinos, the MGM resorts enjoys the tax breaks granted by the US government. With its size, this is sure to save the company billions per year which is enough to start operating in other key locations – thus speeding up the expansion process. This is a key advantage that magnifies the level of competition MGM can bring to the arena.

International Presence: This geographic diversification helps spread the risk should an economic downturn occur in a certain region. This way a group of region can compensate for the decline of others. In addition, certain parts of the world experience seasonal peaks at different times, this way an organization can use the excess funds from one property’s peak seasons to fund another’s low season.

Presence in Macau: The city of Macau, in China, is the largest gaming city in the world in terms of gaming revenue, before Vegas. With the Chinese economy rising, and the Chinese’s gaming industry growing, we believe their established presence there is a huge advantage in and of itself.

Weaknesses:

Concentrated Geographical Presence: For instance, in the North East region of the United States, the MGM organization has more than one properties operating. This serves as a risk, considering that should the economy recede, it is expected that their revenues from these properties will recede as well.

It’s Large Size: It may become less able to tailor its styles for each individual customers. As the organization continues to expand, it may become too difficult for the administration to focus on the details. In addition, should the MGM brand win the upper tier customer’s loyalty, its only room for additional growth is to focus on the middle class customers, which have proven unsustainable in this sort of market. Also, their large international presence allows them to build a customer relationship database that can be very valuable.

(“MGM Grand Hotel..”, 2012)

3.8.7.15 Harrah’s Entertainment:
The first reason this Casino was selected, is due to the fact that it has been operating not only in Atlantic City but entire United States market for quite a long time . This means, this company would have to incur a substantial amount of investment to renovate its properties to a more modern look – a similar situation to the remaining Trump properties in AC. This makes it a good representative of so many of the other AC Casinos that have been established for quite a long time (“Harrah’s Entertainment, Inc.”, 2007). While this enterprise does indeed have access to the necessary funds to renovate their properties, we believe that the costs are not just limited to the actual payments incurred to renovate the structure but also to the revenue missed out during the renovation process. The second reason for the choosing of this company is that it is also one of the largest players in the gaming industry worldwide – ranking third worldwide. So for this second reason we believe this competition poses some serious threat to the Trump Taj Mahal.

Strengths:

Recognized Brand Name:

Due to its long history in the market, and its large presence in terms of market share, Harrah’s brand name has become known for gambling (“Harrah’s Entertainment, Inc.”, 2007).

Highly Diversified Nationally:

The organization’s casinos are spread throughout the United States. Making their portfolio risk relatively spread should one part of the nation’s market recede. Aside their geographic diversification, Harrah’s also diversified in terms of operations – providing both casino and racino facilities nationally. Just like MGM, we believe their large geographic presence allows them to build a large customer database that can prove very valuable (“Harrah’s Entertainment, Inc.”, 2007).

Large Access to Capital:

Like MGM, being a large player, in this case the third largest player in the gaming worldwide, we believe Harrah’s has access to sufficient capital (if not through equity, then through leverage) should it find an opportunity it considers worth capturing (“Harrah’s Entertainment, Inc.”, 2007).

Weaknesses:

Highly Concentrated in the US:

With most of their properties in the US, it is highly likely that a good deal of their revenues are suffering due to the lack of international diversification (“Harrah’s Entertainment, Inc.”, 2007).

C. Revel Entertainment Inc.:
Like the previously listed participants, we selected this player for two main reasons: The first is that it is a new entrant into the Atlantic City market, meaning this would be considered a reasonable representation of the new entrants (Kakhi-Saddigh, Platin, Carlson, McMillan, and Bonneteau, 2009). And secondly, while it is too early to say, it has received a good deal of publicity and is a potential winner- so it may be a threat for that the Taj needs to keep a watch on.

Strengths:

1. A Fresh Start:

Being a new entrant into the market has its advantages. First of all, it gives the recent participant of studying the current and future status of the market and its participants before making an entry.
Secondly, the new entrant understands his competition better than they understand the new entrant (Kakhi-Saddigh, Platin, Carlson, McMillan, and Bonneteau, 2009).

2. A Modern Look:
Customer tastes and preferences are always shifting. This means that the older design hotels may have a less appeal to the general consumers. A new entrant, on the other hand, has the advantage of adopting a modern style that appeals to the general majority of consumers.

3. Sustainable target market:

Unlike the vast majority of operators in the AC region, The Revel is targeting upper-tier customers, this can be with their room rates starting at $289 a night.

4. Large Size:

The Revel’s large size almost insures a competitive supply of rooms and gaming space for many upper-end customers. What it also does is it provides the benefits of the economy of scale. By serving more, it can cover its fixed costs more easily. The Revel building is the tallest in Atlantic City.

Weaknesses:

Bad timing: Their opening date was recently during April of 2012, this would make one question their judgment of their forecasts regarding how well, the market would be.

3.8.7 The Trump Taj Mahal provides a package that is a combination of both a product and a service.

3.8.8.16 Core products: Like all of their properties, the Trump Taj Mahal encompasses features in their properties that are both valuable and difficult to replace or put a price on. These include:
1. Location: Conveniently located at the beachfront, where customers are literally within less than a walking distance from the warm beach sand of the “Taj Beach” (see picture on the right). The hotel & casino is also situated at the lively Broad Walk Street, that makes it all the more convenient for customers to stay in. You don’t have to drive very far, in fact, you don’t have to drive at all. Just step outside the building, and you’re in the are in the middle of “the action”.
2. Premium View: The view from the room of a property is a key issue whenever buying a high-quality building. The Trump Organization have become masters at finding key locations with these views. The Trump Taj provides a spectacular view of Atlantic City’s Boardwalk and Towers. It also provides a soothing scene of the beach. In the mood to change scenes? Please, look behind you.

3.8.8.17 Tangible Products: The tangible product of the hotel is the facilities, restaurants, gambling equipments, foods and beverages, furniture, pools, gym, saunas and other tangible aspects of the hotel and casino.

We have decided to categorize these facilities according to how they were grouped at the Trump Taj Mahal’s hotel website. Besides the beautiful décor and furniture (which we also assume must be equally comfortable, if not more) there are three categories emphasized:

3.8.8.18.18 Health Spa & Salon:

3.8.8.18.19.5 Spa: The Spa at the Taj is armed with the arsenal necessary to help you unwind and relax. Whether its Swedish massage, hot stone massage, or a couple’s massage! They have it. 3.8.8.18.19.6 The Fitness Center: Whether its to care for one’s health or to boost one’s self-image, the Trump Taj fitness is your place to be. Armed with the latest machines, as well as the most challenging ones, the Trump Taj’s fitness center should excite beginner and professional athletes. The Trump Taj also has a warmed indoor swimming pool, sparing no expense to meet your satisfaction.

3.8.8.18.19.7 Salon at the Taj: This is a place any lady looking for a make over should love. The salon should turn you inside & out, whether its make up, a new hair style, manicure, pedicure – the salon at the Taj has it available.

3.8.8.18.19.8 Shopping & Recreation:

3.8.8.18.19.9.1 Accent: A wide array of sophisticated accessories for you and your home is available at the Accent. This place provides an opportunity for guests to purchase an unrivalled crystal gift for your loved one.

3.8.8.18.19.9.2 Marshall. Rousso: Another famous name staying at the Taj. For any woman looking to stand out with glamour, Marshall Rousso store will provide her with beautiful evening dresses, foot wear, and hand bags. Other famous fashion store staying at the Taj include Cache’ and Bernie Robbins.

3.8.8.18.19.9.3 Trump Times News Stand: Want to keep up with the latest headlines in the financial world, or the political arena, or maybe it’s a certain magazine you enjoy reading, the Trump News Stand has it.

3.8.8.18.19.9.4 Trump Exchange: This is the Trump fashion house for the men and the ladies. Offering upscale handbags, suits, dresses, and some collectibles designed by the Trump clothing brand.

3.8.8.18.19.9.5 UPS Store: In case the customers need to fax, ship, copy anything, or even wish to pick up office supplies, the UPS store is located within the building for The Taj customers’ convenience.

3.8.8.18.19.9.6 Night Life and Entertainment:

3.8.8.18.19.9.7.1 The Ego Bar and Lounge: The Trump Taj has an never-ending list of performances provided for their guests. Famous names that have performed at the Trump Taj include Backstreet Boys, Beyoncé, Breaking Benjamin, Chris Brown, Mariah Carey, Barry Manilow, Kenny Rogers, Jeffrey Ross, Santana, Shakira, Tiesto, Kelly Clarkson, Dane Cook, ,Whitney Houston, Enrique Iglesias, Elton John, Jonas Brothers, Tom Jones, and Kid Rock.

3.8.8.18.19.9.7.2 The Casino: The Casino at the Trump Taj Mahal is equipped with the latest games and equipments. Whether it’s a try at the slot machine, or a game on a table the Trump Taj has all there is to quince your thirst for uncertainty.

The Augmented Products:

This is a broad category and it includes all of the services and experiences provided for the customer. For instance, while the performances are tangible, as in you can see them and can be touched (though that’s typically not allowed), the real product being sold to the customer is the experience or feeling that comes with this performance. The customer will not take the performance home with him. Other augmented products include how the staff interact with their customers, the room services provided through the beauty salons, spa, and even UPS. The experience provided through the performances done in the Taj as well as the experience and excitement of the uncertainty associated with gambling is also a service.

It is important to note in this section that throughout the research process while conducting this report, we have detected numerous similar complaints on websites like TripAdvisor,com, that the services provided in the Taj is not as well as customers have expected.

3.8.8 Customer Analysis

This section analyzes the underlying psychology of the consumer, in this case the gambler and outlines a possible scenario of a gambler’s decision-making process.

A typical decision-making process undergoes 5 steps.
These five steps are illustrated below.

1. Need Recognition:

Typically, a consumer’s, in this case a gambler’s, decision process begins when they recognize they have what is an unsatisfied want or need. The greater the difference between the consumer’s current state and their desired state, means that the need recognition is of a greater degree.

For instance, as hunger typically drives a person to eat, there are certain sensations that would lead a person to participate in the act of gambling. Of course, a primary difference worth mentioning is, while eating could serve as both functional and psychological needs, gambling only serves psychological needs. According to a studies, one of the reasons people gamble (which we will focus on in this section) is Risk taking (“Psychology of gambling”, 2008)
.
Risk taking or uncertainty creates a sensation that people typically enjoy to a certain degree. The “rush” or excitement associated with uncertainty and the risky is evident all around us. It is partly why many consumers ride roller coasters, race, or even sky dive. And with gambling its no different, it’s a risk as well (“Psychology of gambling”, 2008) (Grewal & Levy, 2012).

2. Search for Information:

After the consumer acknowledges the need, they would typically search and browse for information on alternatives to satisfy that need. Usually longer searches indicate a greater degree of risk associated with the purchase. But the house always wins, so its highly unlikely a typical user would search for a casino he or she can beat. What he or she do typically look for is a casino that meets the expectations they have, that would provide him or her with the exciting weekend or holiday they are fantasizing about (Grewal & Levy, 2012).

There two modes of search here:

The first is the Internal search for information. In this mode of searching for information, the potential gambler (consumer) will try to examine his or her existing on knowledge on the subject. For instance, consumer the experiences of friends or family. Or, the consumer may examine past experience of his or her own experiences (Grewal & Levy, 2012).

The second is the External search for information. This includes browsing the internet, going through magazines, asking people about the available choices of casinos. We typically, expect the gambler to seek casinos in his or her region. It is highly unlikely, except in extreme cases, that the gambler would seek to satisfy his need for the excitement associated with gambling by travelling across the continent or such very long distances (Grewal & Levy, 2012).

Some of the factors affecting the consumer’s search processes include:

1. The Perceived benefits versus the perceived costs:

At this stage, the consumer weighs in the perceived benefits of the consumption, in other words, the excitement associated with the purchase, and the cost which is the likelihood of losing money (Grewal & Levy, 2012).

2. The Locus of Control:

This concept is made up of two main parts:
Internal Locus of Control: People that fall into this category, that is those with an internal locus of control, believe that they are in some level of control of their lives (Grewal & Levy, 2012).

Consumers of this criteria are more likely to gamble, since typical gamblers have the tendency to believe that they can control the situation and beat the house. Whereas, consumers that fall into the second category, as in those that have an external locus of control (or more common sense), would know that the odds are not in their favor.

3. Actual or Perceived Risk: This section includes 5 types of risks associated with the purchasing decision. These risks can hinder or postpone the purchase. As the perceived risk increases, the likelihood of making the purchase decreases.

A. Performance risk: This risk takes into account the likely danger or harm associated with the product or service’s poor performance (Grewal & Levy, 2012). As the consumer perceives a smaller chance of satisfying the need through the Casino, or associates certain harms with the activity, such as an increase in the addiction to the activity, the chances of making the purchase decreases.

B. Financial risk:
This risk is associated with the monetary spending in the purchase. This perfectly explains why the activity of gambling has decreased as the economy receded (Grewal & Levy, 2012). As the economy worsened, the perceived financial risks have increased, thus the danger associated with losing money in gambling has become much higher (because it is relatively scarce and its source is no longer perceived secure).

C. Social risk:
This involves the consumer’s concern of the opinions of others regarding his or her behavior, in this case gambling. The culture can have a large impact on this factor (Grewal & Levy, 2012). Certain cultures do not accept this type of behavior in any way. Other cultures have some tolerance towards this behavior, but to varying degrees.

D. Physiological risk:
This involves the risk associated with physical harms (Grewal & Levy, 2012). We do not think this is likely, aside from the shooting incident that did occur in the Trump Taj Mahal building. However, we believe that the likelihood of this happening again close to nil.

E. Psychological risk:
This risk is usually involved when consumers are not sure if consuming the product or service will be harmful for their self-image (Grewal & Levy, 2012). Again, this varies from person to person. Some people may view gambling as dangerous or foolish, some may view it as a justified way to have fun, others may view it as a way to earn a living.

3. Evaluation of Alternatives:
Once the consumer has pinpointed the need, and has explored numerous options to satisfy that need, the next step is to compare and evaluate those needs. These options are usually evaluated by a set of criteria (Grewal & Levy, 2012). This criteria can include:
a. The distance, the farther the destination, the less likely that place is to be selected.
b. The costs, this includes the room accommodation, the food, room service charges, travel expenses…etc.
c. The style of the hotel and the facilities: Does the hotel meet my criteria? Do I think its facilities will suit my tastes and satisfy my need?
d. Brand: Do I trust this brand? What feelings do I associate with this brand?

4. Purchase and Consumption: The fourth step is typically when the consumer or gambler decides to make the visit or trip to the Casino and try his luck.

5. Post purchase: There are typically three possible post purchase behaviors (Grewal & Levy, 2012).

A. Cognitive Dissonance: This is an internal conflicts when both the consumer’s internal beliefs and their behavior (Grewal & Levy, 2012). For example, a consumer that is a conservative spender may feel guilty after making the big trip to the Taj Mahal and incurring all those expenses, because he thought that making the trip would bring more excitement than a game with at home with some friends. Usually the consumer will try to justify the behavior to his or herself, in order to feel better.

B. Customer Loyalty: This is when the customer is satisfied with the experience he or she had at the casino, and wants to go back for another visit at the casino (Grewal & Levy, 2012).

C. Undesirable Consumer Behavior: Should the customer feel disappointed due to bad service, or the mismatch that occurred between his or her expectations at the casino and the facility or service provided, dissatisfaction will occur (Grewal & Levy, 2012). Passive dissatisfied customers typically keep the incidence to themselves, and simply do not recommend the hotel or casino to anyone. More serious dissatisfied customers will spread a negative word of mouth and with the availability of internet forums, these angry customers have a large audience to speak to. The many complaints available at Trip Advisor that we referred to in this report are a good example of that.

4. Segmentation, Targeting and Positioning (STP)

5.1 Market Segment(s):

As illustrated throughout the report, the target we hope to focus our targeting efforts is either an affluent one (preferably residing within the North Eastern region), or a very differentiated one that is not tapped fully – such as the gay community in the East Coast. Due to the limited time allocated to the making of this report we will emphasize on the affluent target market – as it is more likely to add to the bottom line (which is the most important element by the end of the day). However, what both segments share in common is that they are differentiated and narrow target markets.

There are numerous reasons to target the affluent segment.

For one, as mentioned before in the report, not only are they the relatively smallest segment in terms of number, but they are the highest in terms of spending. This is the segment that is likely to stay the longest, and take advantage of the amenities, and room services if satisfied. Being smaller in numbers and higher in payments, means that serving this market makes more sense, not only does it generate more at the end of the day, but is also efficient, since the hotel will be potentially earning more for less.

Another reason to target this segment is that they’ll continue to come in good seasons, and bad seasons. The upper-tier customers are usually unaffected by the occasional increases in prices or the recessions that are part of the economic cycles. Instead, they are likely to continue visiting with their friends and family –If satisfied. Afterall, birds of a feather flock together.

But simply because they are a few, does not mean its any easier. In fact, attempting to satisfy this segment alone can prove to be harder than satisfying all of the other groups together. One possible reason for this, is the difference in standards and expectations in customer services. In addition, this segment is highly exposed to many of the latest services and comforts of life – this means that when dealing with this segment, constant upgrades becomes a matter of staying in business.
Also, another reason, this segment could prove difficult is the ease of which they can switch from one hotel or property to another. Unlike the general majority, this segment won’t likely bother budgeting their spending anywhere.

This is not, in any way, intended to discourage the targeting of these customers. In fact, this analysis conducted while making this indicates that this is the only sustainable and viable options for the luxury industry. The goal of the Trump Taj should not be to lure in seasonal visitors, that may visit once every year’s vacation and will cut back on foods and beverages and other services in the hotel. Rather, the Trump Taj must become a retreat and a sanctuary for the country’s rich.
Another reason that makes targeting this segment so attractive is the very little marketing efforts being expended towards luring this segment by competitors. In other words, as attractive as a segment this is, there are very few players expending large sums of efforts and capital to attract this segment. In fact, many of the Casino Hotels in AC are still following the conventional method of trying to satisfy everyone, which is highly unlikely to work. Its difficult to be the best at satisfying everyone, and its even more difficult, when everyone else is doing it, after all, resources are scarce, and people’s tastes do differ. So the Trump must act early and without holding back. This way it gains the benefits of the pioneer, and also, (like Coca Cola did with Pepsi), establish a solid relationship with its customers that should protect from any changes in the behavior of its competitors in light of this new strategy.

The reasons for this are many. Many have been mentioned throughout the report, but they will be re-mentioned in Section 5, under Promotions.

5.2 Target market Identification:

This section illustrates a possible criteria that can be used to identify our desired target market – the High Rollers.

The researcher of this report has come up with the collective set of criteria to help the Trump Administration reason whether a certain gambler is worth pursuing.

Above average salary or income | Home owners | Address | Club Memberships | Job – sustainable in bad times? | Avoids playing the low-stakes tables | | | Frequent visitors of casinos | |

The first criteria that defines most good quality gamblers is an Above average salary or income. This makes sense, because gambling is a leisure activity, and hence would most likely (thought that’s not always the case) be conducted when there is sufficient money to cover the consumer’s expenses and a surplus to be wagered at the gaming table.

The second reason, and this is no perfect indicator, but it helps as a benchmark for filtering out the non-potential high roller individuals.

The third one makes more sense when added to the second criteria. Sometimes, you will observe individuals that own a villa in an average or below average area, whereas another individual owns an apartment that as one-fourth the area of the villa. However, the apartment is located in a tower, on one of the most prestigious streets in the middle of the city. In this case, you will have to go with the gentleman that owns the apartment. It’s not about the size of the property an individual owns, but rather the net worth.

Some believe you can tell a lot about a person by the people he’s surrounded by. While there may be some level of truth to that, there are numerous cases when two friends come close even though they are from different backgrounds. What we felt were better indicators of the social status were the Social Clubs you were a member of. There are certain social clubs that allow only exclusive memberships if a person meets a certain criteria proving that he or she is part of a certain social class. This evaluation is usually conducted through examining the finances and other related matters.

The Job or business of the person or individual is critically important. How much does a person earn, and how stable is the company he works are crucial. If , let’s say, the line of business bill is working in is directly correlated with how well the economy goes – such as flipping real estate, then there is a considerable risk of this man’s income as well as his willingness to play at the casinos should the economy recede. However, Mike’s line of business of buying and renting out real estate does considerably well in both bullish and bearish economies. During a boom, his real estate values are appreciating and borrowing is relatively easily, thus accelerating the expansion process. During busts, real estate values fall, but that only means its cheaper for Mike to buy more. In addition to falling values, rents go up during busts. So mike does well during both booms and busts. If Mike’s a gambler, he’s loyalty is in the long run is worth fortunes.

There are times when rich individuals only would allow themselves to gamble a certain small amount and nothing more. This is a negative sign for the casino marketers because it means the potential high roller is in fact no high roller.

You also want to prioritize your efforts according to the frequency of visits. If say, Bob games a total of $13,000 in one day, but doesn’t return until next year, whereas Mike gambles an average of $1,500 per month, then it is only sensible that the Casino prioritize its marketing to Mike over Bob’s. This is because of two reasons. The first is the obvious one, that within the same span of time (one year), Mike brings the casino $18,000 [$1,500 x 12], whereas Bob brings in $13,000. Mike’s frequency is crucial because, if the Casino were able to sustain the loyalty of frequent visitors, then the casino would deter experiencing those months or seasons we mentioned in section three where revenues are relatively down.

Please note, that like stock performance metrics, or even metrics for predicting the weather in the far future, these estimates are not perfect, nor are their results absolute. When evaluating a potential high roller, one is encouraged to use all of these metrics together and use his or her reasoning to spot other clues that may encourage or deter the Casino from perusing the loyalty of that targeted of that gambler.

5.3 Positioning:

The Trump Taj Mahal needs to position itself to be the premium choice for their targeted upper-end customers.

This means that the management at the Trump Taj and the upper management at the Trump Entertainment Resorts Head Quarters will have to upgrade their services (their facilities are fine). There seems to be a lot of complaints regarding their services in the hotel, in many cases, customers found the waiters rude or lazy – this cannot go on. In fact, this cannot happen when you have upper-level customers staying at the hotel – who can easily switch to another hotel if they were in any way offended. The negative word of mouth from these individuals could mean disaster, however, a positive word of mouth from these individuals could mean you’re in business and growing.

But in order to solve this issue, the Trump Taj needs a staff update. Just like how we update facilities at the hotel – through fixing or replacements, the same should be applied to the staff. The author of this report recommends firing those that were consistently ranked at the bottom 10% (after negotiating with the Union(s)), after all, there is no excuse for constantly being at the bottom 10%. This elimination of the bottom 10% should raise the overall average of performance, since the extremely bad cases are gone. The author also recommends training the middle 80%, thus raising the level of the average. And rewarding the top 10% handsomely through recognition, benefits, and pay, hence increasing their chances of their elite staff of staying, raising their loyalty for the Taj – because if the Taj does well, they do well also. And finally, this boosts their morale and should energize them to keep up the good work, if not excel. So with the lowest 10% gone, the average performance of the staff will rise. Through training, the remaining average should rise also. Finally, through this reward system the outliers have real reason to become greater outliers.

These changes needed are explained further in the next section.

5. Marketing Strategy Recommendations (the Marketing Mix):

5.1 The Five Alternative Strategies

The five alternative strategies mentioned at the beginning of the report, are outlined below: Note that these strategies are outlined for the next three years.

5.1.1 A bird in the hand is worth two in the bush

This strategy proposes the selling of the Trump Marina, in order to free the organization of any low-return expenses, provide the organization with the liquidity to create the improvements necessary to retain customers and hence better compete in the market.

5.1.2 Divided We Stand, United We Fall also known as The Ironic Strategy

This strategy proposes the name “Trump” be dropped from the Trump Marina hotel. We believe that this hotel is damaging to the Trump Brand – not just to the Trump Taj Mahal, but to the entire Trump high-end real estate portfolio. Whereas the Trump Taj Mahal is a top-tier hotel. That is in terms of its architecture, its location, internal décor- though some of its facilities and its customer service treatment could use some fixing – overall, we feel like that this hotel has potential to attract upper-end customers. On the other hand, its neighbor, the Trump Marina is an aging hotel that would require massive expenditure in order to attract upper level customers. The problem here is these two neighboring properties share the same name. This means that the marina would mislead customers by giving them the impression that the Trump Taj Mahal is similar in terms of quality, and vice versa.

5.1.3 Own Nothing; Control Everything

This strategy proposes the selling of individual units to investors while receiving management fees. In this strategy, the Trump organization retains its presence in AC, while relieving itself of any liabilities/ expenses. One advantage for this strategy includes the freeing up of capital to improve the property. Another advantage of this approach is that it creates a more focused approach for management, which we believe would enhance competition. This strategy falls under the “Act BIG- stay small strategy” titled in this report. Also, by staying small, we suggest the company outsource any function that it can get at a higher quality for a lower cost. A third advantage is the rapid expansion possible with this method. A final advantage is synergy the trump organization can use its brand on any of the properties it manages as a sign of quality for customers, with a single collective database for all of the properties’ customers.

5.1.4 Be different, You Need a Niche

Unlike chemistry, if you use the same formula in business, you won’t get the same results. In fact, you will get diminishing results. And with everyone doing, it an even greater recipe for disaster. As mentioned earlier, the AC casino hotels are attempting to please whoever they can. Most of these hotels have lower-end, middle class, and upper-end rooms available. Now why is it a bad idea? First of all, every organization has limited resources, and effective marketing can get very expensive. Secondly, attempting to market the same product to very different segments can send out mixed impressions should the unintended customer view the promotion. For instance, a high-end customer coming across a large discount offer (that is conventional for attracting lower-end customer – e.g. bachelors looking for a fun weekend) would deter that customer from considering that hotel to go to with his family or to play a high-stake game in. So we suggest challenging conventional wisdom. Another reason this is a good idea is because, this industry is highly correlated with economic conditions. If the economy is doing well, this sector does well, and vice versa. Thus focusing on attracting and retaining the upper-end customers who , unlike lower-end customers, are relatively unaffected by economic recessions becomes all the more critical. In addition, these customers are more likely to take advantage of the extra services that the hotel offers, to order food and beverages, and to stay longer, hence increasing profit per room. A more bold approach suggested in this report is to start a gay casino – a none existent entity in the AC region. However, should this strategy be adopted, it is necessary that the Trump Brand be dropped so as to not to dilute the image of your brand.

5.1.5 Sell off
This is the plan of last resort. Should the other plans be seem impractical, this plan is recommended. A major disadvantage is the unlikelihood of finding a buyer willing to pay the asking price. So this is highly likely to end up with a loss and a decrease in consumer and investor confidence in the brand.

Some of these plans may be implemented simultaneously, depending on the willingness of management to take such a path. A marketing mix alteration has been outlined to suit the strategy that we believe Mr.Trump , as well as the administration is most likey to pursue and that is a combination of strategies # 1 & 4: That is to pursue a different niche for The Trump Taj Mahal, and the selling of the Trump Marina.

This conclusion is based on past behavior. On many occasions, four to be exact, the Trump organization almost fell into bankruptcy and Mr,Trump time and time again, did not sell any part of his properties, until recently when he sold the late Trump Plaza to save the remaining two. For this, we believe Mr. Trump would be willing to adopt this new strategy instead of suffering a total loss in AC.

5.2 The Alterations to the Marketing Mix:

There are 7 P’s in the marketing mix. They are Product, Price, Promotion, Place, People, Process, and Physical facilities.

According to this research, the Physical Facilities seem to be fine, they have been updated recently and customer complaints on Trip Advisor seemed to focus on a shortage in a different area which will be mentioned later on in this section.
As for the Place, there is not much we can do about it, considering that it is a fixed building, and we consider renovation to be too expensive, so we will leave this P as well.

5.2.1 Product:

We recommend getting the termination of Trump Marina product line. The reason for this is, the Trump is an aging building. So should Trump or any buyer consider operating it competitively, a large renovation is in order. The Trump Marina’s revenue has been significantly low, as shown in the financial statement provided in Appendix A. We believe this to be a good move because it frees up already tied capital and puts it to work in investments that could earn higher returns- such as future upgrades for the Taj. In addition to the freeing up of capital, the selling of the Trump Marina could free Brand Equity. Both the Marina and the Taj carry the name Trump. We believe that Marina’s carrying of the name is harmful to the Trump Taj Mahal and the entire Trump portfolio, since the Marina fails to meet the same level of sophistication of the other Trump properties. In Addition, this selling of the Marina will free mental space, and management time. This freeing up of management time, should help management manage the Taj more creatively, effectively, and aggressively. Finally, selling the Trump Marina means you can bring the employees that rank higher than those working in the Taj, in terms of performance, and replace them. This way the average of the human resource performance rises. So far, these changes pertain to decreasing the product mix breadth (Selling the Trump Marina) and changing the Property’s Augmented product, the services provided).

5.2.2 Price:

As mentioned in many parts of the report, our future plan is to shift the Taj from following the common approach for the industry, and that is to try to be the best at satisfying everyone, to becoming a sanctuary meant and designed to satisfy a single targeted market – the upper-tier customers.
In the mean time, there is only one hotel that solely targets the upper-tier customers in AC, and that is The Revel. So we propose using their Price as a Benchmark – our prices (of course, this only occurs after the improvements in our secret weapon – talented human resources). So our prices, once improvements have been made and tested, the Taj should raise its rate per room to start around the neighborhood of $285. We also believe this move of raising the prices would raise customers’ perceived value of the property, and hence become a bigger option for upper-tier customers to consider.

5.2.3 Promotion:

The Trump Taj must abandon the days of discount wars. It’s a race to the bottom, and we believe it could be dangerous in depressed economies. Besides, why charge less for an unsustainable market (Lower return and higher risk), when you can charge more for a sustainable market (Higher return and lower risk). Unlike many of its competition, the Trump organization is partial owner and in some cases, complete of some of, what is considered by many, the hottest shows on television. Shows such as, The Apprentice, The Miss USA, The Miss Teen USA could feature exclusively in the Trump Taj Mahal! Fans from all over the country may visit, and if carried on properly, they would be gone associating the Trump Taj Mahal with excitement because of the show. What it also does, again, if carried out properly, is have visitors leave with a deep impression engraved about the spectacular and fabulous Trump Taj Mahal. They’ll likely spread a positive word of mouth, and may even return with friends, family, or partners but this time, for a proper stay.

5.2.4 People:

In order for the Trump brand to be known for superior and unique quality services, the Trump administration must seek out quality people (after all, these faces will be representing the Trump brand). These recruits must be social, funny, fun to talk to, educated enough to engage in a broad base of topics. Preferably, the recruits must be diverse in their interests such as history, etc… in order to match our clients with employees that share similar interests. These recruits, even though talented, and preferably with past experience, will undergo training before their first day of work. All employees will be subject to trainings on semi-annually basis to help them keep up and fresh with all the updates of the industry and what their competitors in the market are doing.

5.2.5 Process:

The complaints regarding services in the Trump Taj are nothing new. In fact, their hotel have been for quite some time performing below their competitors for quite some time now. This is indicated by the organization’s repeated attempts of filing for bankruptcy, while competition where as frequently facing difficulties.

In sum, what we want is an entirely new differentiated system for the Trump Organization. We want differentiation in the target customer, prices, promotion, and the sensation being provided to our customers, and even in the training / recruitment – NOTHING ABOUT THE TRUMP MUST BE DEEMED NORMAL OR WORSE, AVERAGE