Grafica Inc.

Winning the New Jersey Lottery

By Group 7

Graphica Inc.
Started by Deb Taeschler in 1986 Full service advertising agency by 1998 Located in Chester, New Jersey Known for its integrated marketing approach to customer relationship management and its expertise in using digital technologies in marketing communications and advertising Employed more than 50 personnel and served a number of marquee accounts including AT&T, Lucent Technologies, PSE&G (Public Service Electric & Gas), Allied Signal, Horizon Blue Cross/Blue Shield, Novartis, Coldwell Banker Commercial, and Hasbro

The New Jersey Lottery

Created by an amendment to the states constitution on November 11, 1969 By 1998, annual sales totaled approximately $1.6 billion Fifty-one percent of Lottery sales went back to the players in prizes Net proceeds from the sale of Lottery tickets also benefited various state education programs and institutions Despite this public awareness about their +ve impact low Suffered from an additional image problem of being a game for the poor Still 80% of adult New Jersey state residents had purchased a lottery ticket in the last 12months

Products
Pick-6 Lotto Pick-6 Lotto was New Jerseys most high-profile and largest jackpot lottery game. To win, a player had to select a six-digit number; winning numbers were drawn twice weekly. The jackpot rolled over when there was no winner, With the exception of billboard advertising, Pick-6 had not been promoted in over two years. Pick-3/4 To win, a player had to select a three/four-digit number; winning numbers were selected daily. The game had a pari-mutuel style payout. This product had not been promoted in recent years. Instant Games In a typical year, the Lottery had more than a dozen Instant ScratchOff games on sale simultaneously. Most of these games had short lifecycles, and dozens of new games were launched and promoted each year. (The Lottery had plans for 40 game introductions in 1998.) What all of these games had in common was that they provided players an opportunity to win instantly by scratching off a covered area on the game ticket. Jersey Cash 5 This relatively new game was structured such that there was no top prize; rather, the prize was shared equally among winners. Lotzee This new game provided players an opportunity to pick 2, 3, or 4 numbers with 63 ways to win

Competition
Strong Competitive Environment Bordering states like NY, Penn., MD, VA administered govt. sanctioned lotteries, legal form of gambling and horse racing.

Issues
In recent years, sales of mature products had begun shrinking, resulting in declines as much as 14.6% from 1997 to 1998 NJ Lottery needed a company to implement the advertising, PR, promotional programs for dozens of games that are part of its lottery portfolio Additionally, the state had asked bidders to submit a detailed proposal for the launch of a new type of Instant Scratch-Off game called Spades Winning this account would enhance Graphicas reputation and enable them to attract other big clients Currently too much product clutter and one-point strategy of pushing new products

Spades
Proposed Game Concept Spades tickets cost $2; each ticket contains seven rows of five cards. The player can scratch one and only one spot for each of the seven rows on the front of the ticket. The number of Spades revealed indicates the possible prize: 4 spades = $1 5 spades = $5 6 spades = $25 7 spades = $100 Target Market According to the RFP, the target market for Spades is: 25 to 44 years old Higher income bracket ($40,000+) Educated male Lapsed and/or occasional instant player

Sales of Lottery
600 500 Sales (in Million Dollars)

400

Point of sales Decline

Cannibalisation

300

200
Point of sales Increase

100

0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Pick 3

Pick 4

Pick 6 Lotto

Instant Tickets

Reasons for Sales Cannibalisation

Pick-6 Lotto

Instant Tickets Almost entire budget 32% of lottery sales Average top prize is only $30,000 Very high frequency of game Game life-cycle is very less

No promotion done at all since 1997 Odds to win 9,366,819 to 1 Odds to win bottom prize 801 to 1 Maximum top Prize is variable

More focused promotion on instant tickets the consumer perception that the payoff on instant tickets is high Every ticket in Instant games could result in win.

Media Plan
Focuses on rebuilding the umbrella brand and be consistent with the umbrella branding strategy Reduce the cannibalisation of instant games and pick 6 lotto
Invest in advertisement of Pick 6 Lotto Change positioning of Pick 6 lotto from a traditional lottery to a new

Distribute the media budget to various media instead of focusing on one. building awareness of a revitalized Lottery brand promoting individual games in a way that is aligned with Umbrella strategy to promote sales of Pick-6 Ticket Develop a model to engage the existing customer base
Develop schemes and promotion targeting these customers

Media Plan Contd.

Adapt more modern methods of advertisements Interactive website Direct Mails to Consumer who opt for these Focus more on Out-of-home promotion Email & online advertisement
2000 1600 1200 800 400 0 1996 1997 1998 1999 Projected Non Media Production

Category Television Radio Television Out of Home Print Radio Media Production Out of Home Non Media Production Print Others Media Production Total

1999 Projected 600 400 1200 200 200 800 300 3700