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Business Analysis Of MGM

Paper Type: Free Essay Subject: Marketing
Wordcount: 1957 words Published: 14th Apr 2017

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MGM Grand one of the world’s leading and most respected hotel and gaming companies, owns and operates 24 properties located in Nevada, Mississippi and Michigan, and has investments in four other properties in Nevada, New Jersey, Illinois and the United Kingdom. As it implies in the mission statement below, in all their resorts their main aim is to provide high quality customer service in every facility around the world in order to enhance shareholder value and sustainability.

“Our mission is to deliver our winning combination of quality entertainment, luxurious facilities and exceptional customer service to every corner of the world in order to enhance shareholder value and to sustain employee, customer and community relationships.”

In addition, MGM Resorts International with 16 resorts and 165 restaurants supports responsible gaming and has implemented the American Gaming Association’s Code of Conduct for Responsible Gaming at its gaming properties.

Assessing Growth Opportunities

MGM Grand is considering to gain more market share with its current products using a market penetration strategy. For this reason, each product (resort) is diversified to meet the needs of the different market segments. MGM Grand diversifies its hotels mainly by pricing strategies, and level of luxury.

Market Positioning of Resorts

Bellagio with its glamorous appearance and appealing nature is positioned as one of the most high end hotels in Vegas. Following that, Aria is growing its position in the international market with high sales in convention bookings. Aria expresses its significant difference with its contemporary architecture whereas Bellagio stands out with its AAA Five Diamond Award® winning casino. The third strong player of MGM Grand, Vdara provides a non-gaming, smoke-free environment.

Mandalay Bay points out itself as “Untamed Luxury” whereas Mirage follows the slogan “Vegas Starts Here”. MGM Grand, on the other hand is “Maximum Vegas”.

4Ps of Marketing


MGM Resort International has 12 hotels on Las Vegas Strip and operates 7 more hotels in US and other locations. Bellagio, Aria serving the needs of the high end visitors, New York, New York, Monte Carlo, Luxor, Excalibur, Circus Circus MGM Grand , on the other hand are serving the needs of the diversified market with its diversified accommodation range. Vdara, Signature at MGM, The Hotel at Mandalay Bay are boutique hotels designed for satisfying special needs of its visitors. The Hotel at Mandalay Bay is mainly designed for business travelers as well as pleasure seekers. City Center with its luxury shops is positioned as “one of the world premiere shopping destination” attracting all visitors of Las Vegas. MGM Grand Detroit serving luxury in the center of entertainment in the city mainly attracts high end customers with its high end positioning.

Brand name is an important key factor in MGM Grand’s marketing strategy therefore establishes different brand names and implies different pricing strategies to each product in its portfolio.


For MGM Grand pricing is a key variable in differentiating the variety of the quality and thus prices demanded from customers. Bellagio is the high end product with the highest pricing model followed by Aria. However MGM GRAND, Excalibur, Circus Circus, New York New York and others are effected by seasonal pricing, special discounts and special packages.

As seen in the graph above Bellagio has the highest price $130(for a week day), and Aria second highest with a $129 per night fee. The Hotel, Vdara, Signature at MGM are in the $110-90 price range. Circus Circus has the lowest price $38 per night on a weekday followed by Monte Carlo, Excalibur, Luxor and New York New York.


Promotion in Las Vegas is mainly consisted of online advertising, TV advertisings, paper and B2B advertising. Hotel companies make discounts in week days and last minute deals as a way of increasing hotel occupancy rates.


Visitors coming to Vegas are the main targets also MGM Resorts attracts customers through other websites, magazine advertisings.

MGM Grand’s products battle in the same oligopoly market with small number of sellers. MGM positions its product portfolio with respect to its pricing strategies and level of luxury. For that reason Aria, Bellagio are the in the luxury group whereas MGM Grand, Monte Carlo, Newyork Newyork, Luxor, Excalibur are in the middle range. Bellagio, Excalibur, MGM Grand act as cash cows because of their market share and sanity in the market.

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Vdara and Aria have a relatively high market share with a high growth rate and they will be penetrating the market in the next periods. Stars, units with a high market share in a fast-growing industry are mainly the hotels with concierge tourism. MGM has been investing on boutique hotel concept for the last years. This growing market will bring much revenues and market share. For that reason Vdara, The Hotel and Signature are the stars for MGM. The hope is that stars become the next cash cows.

Bellagio, MGM Grand, The Mirage, Mandalay Bay, Luxor, Excalibur, Newyork Newyork, Monte Carlo can be considered as cash cows currently since they are generating revenues.

Crystals, the shopping mall inside the city center can be positioned as a question mark since it consumes large amounts of cash with a relatively low market share. With a 70% occupancy rate currently, 5 higher end boutiques will be opening its doors in Crystals soon.

Dogs, it is thought, should be sold off; however the companies keep them for several reasons including strategic plans. For MGM Grand dogs are considered as company’s low earnings like Circus Circus, however, company keeps them in its portfolio to penetrate the Las Vegas market.

MGM Grand’s hotels do not only act as a place to accommodate in Las Vegas but they are also the advertising tools of MGM Grand. For instance Aria is advertised in the Excalibur’s room channels. From another view, Crystals shops distribute discounts for Vdara. Therefore even though some products are not bringing high amounts of cash, they act as tools to bring out the cash which might be considered as another reason to keep the dogs.

Mobile Marketing

The hotel chain plans to continue to use the mobile channel as a means of data acquisition and to use information collected to expand upon its existing on-property SMS offers. An MGM executive revealed some of the company’s plans and even gave the audience tips in terms of using the mobile channel.

According to MGM Las Vegas vice president of marketing, all the hotels in Vegas have the same level of mobile marketing programs running currently. MGM considers its own mobile system as the best because it provides service for the large groups of travelers too. Additionally, MGM plans to develop a mobile user segmentation action plan so that it can better target offers to consumers.

Why MGM is so strong on mobile?

The mobile channel has helped MGM speak to travelers in its hotels and when they are on the road. MGM has been running mobile promotions targeting the 25-34 age demographic, as they are 65 percent likely to SMS. The company has integrated SMS calls to action within its more traditional marketing initiatives: Broadcast, billboards, the sides of trucks, print and email.

MGM has used mobile to get consumers to text in and join its database of mobile users. Promotions include discounts for rooms, amenities, dining and show tickets. As well as texting MGM puts great emphasis on applications of its hotels for iphone and smart phones. Currently MGM has 15 applications of which 150,000 are downloaded as of November 15, 2010.(Retrievedfrom http://mgmresorts.investorroom.com/file.php/179/RequestMGM+060710+Goldman+Sachs.pdf on November 26,2010)

Recently, MGM launched a mobile display ad campaign, with banner ads running across Yahoo Mobile and Platform-A. Consumers that clicked on the banners advertised on web were taken to a landing page with on-property offers for dining, amenities and discounts. MGM’s mobile initiatives were not only useful for guests, but also it gave the hotel a means of communicating with travelers while they are in Las Vegas.

Usage of CRM

MGM Mirage, one of the biggest team players of MGM Grand will debut a new branded Visa credit card offering preferred status at the company’s seven participating hotels, as well as the ability to earn gift certificates good for accommodations, dining and shows.

The MGM Mirage Rewards Visa Card, issued by Bank One, will offer members two rewards points per dollar spent at MGM Mirage resorts and casinos, and one point per dollar spent elsewhere on the card. Every 2,500 points earned results in a $25 gift certificate good for rooms, restaurants and shows on the properties. It also provides card holders with privileges such as preferred check-in and check-out. The company considers loyalty cards as a key element for strengthening and advance relationship with its current and new customers.

CRM movement will bring loyalty and improved sales figures to MGM Grand although MGM is not the only company offering loyalty cards. Caesars Entertainment began offering the Caesars Entertainment MasterCard through Juniper Bank last December, offering card holders comp dollars towards rooms, dining, shows, spas, golf tee times and other amenities at 15 U.S. properties. Also unlike the MGM Mirage Rewards Visa Card, Caesars’ card is linked to its Caesars Connection Card loyalty program, which offers comp dollars for time spent playing in the casinos.

In addition to the Rewards Visa Card, MGM offers Player Club Cards that are designed to qualify for benefits and rewards at participating Players Club resorts: ARIA, Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor, Excalibur, Beau Rivage and Gold Strike in Mississippi, and MGM Grand Detroit. Basically this card allows members to view current offers and promotions, check account balances, communicate with Players Members Services and view tax information statement. Loyalty Card program has enhanced 60M in database and 29M current players Club customers. The new M life Player Club cards will be provided in 5 forms Gold, Pearl, Sapphire, Platinium and Noir, each offering different privileges and earning points.

Marketing the City Center

Although the taught that CityCenter was expected to be the most powerful development engine of MGM in the long run has started to disappear, CityCenter is still keeping its importance. As the CityCenter was the most serious growth project of MGM during the company’s most glorious years of 2005 and 2006, the company emerged big marketing activities for CityCenter. Many of these actions took place right before the constructions begun and continued with a constant increase. Online sales advertisements, as well as one to one sales, formed a big part of the marketing budget of City Center.


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