Journal of Strategic Management Studies Vol. 10, No. 2, 109–121 (March 2019) doi: 10.24760/iasme.10.2_109 A Study of Factors Enhancing the Success of Casinos Entering into New Market—Toward Marketing Strategy Considering Ones’ Experience of Casinos NOZOMI KOMIYA Graduate School of Engineering, Shibaura Institute of Technology JUN NAKAMURA Professor, Graduate School of Engineering, Shibaura Institute of Technology Abstract In 2018, The Act on the Promotional Development of Areas for Specified Integrated Resort Facili- ties (IR bill) was approved and enacted, and Japan took the first step toward the promotion of inte- grated resorts, including casinos. However, casinos are unfamiliar to many Japanese individuals, and there has been considerable opposition to their establishment in Japan. Following these facts, we have surveyed preference of casinos that are not familiar in Japan. In the survey, we focused on how the concept of casinos becomes different depending on subjects’ experience of overseas casino. As a re- sult, it is found that two factors; “Atmosphere” and “Restrictions on Betting” are the ones that make a huge difference in preference of casino depending on with or without overseas experience. Following this, we discussed the marketing strategy on the business of casino. Keywords: casino, conjoint analysis, gambling, new market entry, intercultural, decision-making INTRODUCTION In Japan, the passage of the IR bill remains con- troversial, with many people opposed to the con- Integrated resorts, including legal casinos (as struction of integrated resorts and casinos. Tanioka found in Singapore and Las Vegas, among other (2004) surveyed 2,953 Japanese on the pros and locations), provide significant economic benefits to cons of casino legalization and whether the respon- their host communities and promote the hospitality dents would go to a casino themselves. More than industry (KPMG AZSA LLC, 2014). The Act on the half of respondents declared themselves opposed, Promotional Development of Areas for Specified undecided, or with no opinion regarding casino le- Integrated Resort Facilities (IR bill) was enacted galization. Most (55%) responded that they had no in 2018 in Japan. Many reports have shown that intention of going to a casino themselves. Further- casino resorts confer huge economic benefits to for- more, some studies have reported negative effects eign countries and entire regions overseas (Daswani associated with casinos, such as social isolation, et al., 2013), and it is clear that casinos could form suicide, and addiction (Grinols, 2016). It was con- the basis of a major tourism industry in Japan. For cluded that, in Japan, the general opinion regard- example, Macau was able to establish casinos as ing casinos is negative so far. However, gambling entertainment facilities within resorts, thus revital- is widespread on bicycle, horse, and auto races in izing the casino market, and then installed them in public stadiums. Furthermore, pachinko, which is the entire region. Indeed, Macau was the foremost illegal in some countries, can be played in Japan in casino city worldwide in 2006, surpassing Las Vegas easily accessible parlors. In fact, the existing market (Masuko, 2016). for gambling, including pachinko, is quite sizable, Copyright © 2019 by International Academy of Strategic Management 109 Vol. 10, No. 2 (March 2019) with over 20 trillion yen spent annually, marking Conjoint Analysis Japan as a gambling country (Japan Productivity Previous study on the decision-making method Center, 2017). has already been made. Yen & Chee (2010) used two It appears that casinos, unlike pachinko and ex- approaches to identify the factors with the strongest tant public gambling establishments, are unfamiliar effects on opinions about casinos: the analytic hier- to Japanese individuals and without precedent in archy process (AHP) and conjoint analysis. Conjoint Japanese culture. Indeed, there is no widespread analysis has been recognized as superior to AHP, understanding of casinos in Japan, rendering ex- because it encompasses consideration of actual en- pertise in this domain scarce and forcing interested vironmental conditions, whereas AHP compares sev- parties to resort to a trial-and-error approach. In eral factors in a vacuum. Additionally, Yen & Chee this context, this study investigated factors that may (2010) aimed to compare and examine the advan- act as psychological barriers to casino acceptance tages and disadvantages of the two decision-making for individuals, and the modifications that could be methods, rather than raise awareness of casinos and made to the concept of a casino to make it more utilize survey data for marketing purposes. Although acceptable, using conjoint analysis. Following this these methods are identical, they derive from re- section, a review of the literature is given. The pur- search questions that differ substantially from those pose is outlined in the third section, and the methods that underpin this paper, which focuses specifically are discussed in the fourth section. The fifth section on marketing strategies. gives hypotheses for preferences for the different as- pects of casinos. The results are offered in the sixth Current Conjoint Analysis of Casinos section, and the discussion and re-examination of the As mentioned above, conjoint analysis is the most hypotheses are set out in the seventh section. Finally, effective method for identifying the factors having conclusions are drawn in the final section. the strongest associations with human decision- making processes. Indeed, conjoint analysis can be LITERATURE REVIEW used to clarify not only issues related to casinos, but also how multiple factors influence the evalua- Decision-making Perspectives tion of products (Kuriyama & Ishii, 1999; Fujiwara In choosing products or services, consumers com- et al., 2017; Matsushita, Harada, & Arao, 2017). In pare them with others, estimating and judging them terms of the evaluation of casinos, Gough (2015) based on various factors (Iyengar, 2011). This is showed the influence the external environment of a termed multi-attribute decision-making (Takemura, casino has (the structure of the building, presence of Harada, & Tamari, 2015). Following the establish- crowds, and sound environment) on the individuals ment of casino resorts, potential casino customers who patronize it. There has been little research, how- will adopt a bounded rationality perspective to de- ever, into how casinos are marketed; instead, the lit- cide whether they will frequent such establishments. erature focuses on environmental factors, such as the This decision-making process involves gathering structure of the facilities. However, broader factors information, weighing the best choices, and then than simply environmental ones are also relevant, making a rational decision (Simon, 1957; Simon, and they should be explored so that casinos can be 1997; Bazerman & Moore, 2008). However, several better understood: this was undertaken in this study. factors, such as the availability heuristic (Tversky & Kahneman, 1973) and representative thinking Intercultural Perspectives (Tversky & Kahneman, 1974) interfere with ratio- Japanese individuals view participation in casino- nal decision-making. These factors, which relate to related activities as an intercultural experience. experience and knowledge, have been examined by Hofsted (2001) defined culture as ‘collective mental previous studies on decision-making methods. programming distinguishing one member from other members in a group.’ Japan does not have casinos of foreign origin, and casinos themselves have come 110 A Study of Factors Enhancing the Success of Casinos Entering into New Market—Toward Marketing Strategy Considering Ones’ Experience of Casinos to be recognized as a symbol of a foreign country, study, we address to figure out what factors make which may lead to misunderstandings about and bi- subjects feel different in ones’ preference of casino, ases toward these establishments. depending on with and without intercultural experi- Indeed, intercultural management has been a topic ence in the past. of recent research. The theory of intercultural man- The second purpose is to examine the develop- agement, which focuses on the management prac- ment and implementation of a casino marketing tices of different cultures, addresses issues related strategy directed at individuals who are not familiar to corporate culture and organizational management with, do not understand, and have had no direct ex- (Hofsted, 1991). However, the applicability of this perience with these institutions. theory is not confined to businesses; as it covers multicultural issues, it can also be applied to inter- METHOD cultural social phenomena (Magoshi, 2004). Wakuta (2014) noted the importance of local standards and Conjoint Analysis narratives in the integration of a new cultural phe- Conjoint analysis of cards containing features nomenon. This consideration is clearly central to combined in multiple ways was performed to deter- efforts to introduce casinos to Japan. The historical mine which cards were most preferred or disliked function of casinos as gaming rooms for the nobil- (Green & Srinivasan, 1990; Kan, 2016). Thus, in ity, or as luxurious venues for social gatherings, this study, a virtual casino was designed based on has been emphasized (Murofushi, 2001). However, conjoint cards. the effectiveness of promoting such narratives to Kotler (1999) modeled a marketing mix that com- increase awareness