Case Study - Selling Hope

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Case study: Selling Hope

Case Summary
State lotteries consider as a marketing challenge. As a legal monopoly, they have no competitors which are a major aim of much advertising. The company only remain two objectives which are recruiting new players and encouraging existing player to increase their activity. To aid them in product development and advertising, marketers use variety research tools to learn people’s preferences and responses to proposed games. They also engage in target marketing by identifying specific demographic groups and learning which are more likely to participate in lotteries and what appeals to each one. State sponsorship of lotteries is widely criticized, first, for being a regressive form of taxation and second for being an improper role for government. Some of the criticism is directed at social impact of advertising. Lottery advertising also relies heavily on fantasy. The main criticism of lottery advertising focuses on the question of deception. Although many ads highlight the maximum award, they seldom disclose the odds of winning it. Defenders of the lotteries and lottery marketing argue that the poor are heavier users of games because they have more to gain, and that for this reason any restrictions would deprive them life-changing opportunities. A great deal of lottery advertising is merely instructional, explaining to people how to play the games. Finally, if lotteries are regressive form of taxation, they are restively painless and purely voluntary.

Question 1: Is the marketing of lotteries deceptive or merely aggressive? How might one account for the targeting of those potential players with lower educational experience?

The marketing of lotteries can be considered as deceptive. The deceptive meaning is the act of convincing another to believe information that is not true, or not the whole truth as in certain types of half-truths. The advertising of the lotteries emphasizes on the great award when someone had win the lotteries, however they never mention about the probability of winning the jackpot is 1 in 13 million. Besides, large jackpots are needed a long period to paid out which normally over 20 year. It may reduce the face amount after calculated the present value of the wining price, there would be lesser after deducted taxes. In addition, the winning prices may be divided among several winners. All kinds of this information are not mentioned in the advertisement. Therefore, the company of lotteries may be creating the false beliefs that interfere with the ability of the consumers to make rational choices. For instance, the advertising create the fantasy about winning the great prices in the future that interfere the customers to depend on the luck other than working hard to ensure the better future.

The target for the lotteries marketing is those who have lower income or education level. Obviously, the lower education level is the main factor which the company will be easier to influence them by promoting the get-risk-quick mentality on the lotteries advertisement. This group of citizens may unclear about the chances of winning the great prices are tiny and almost impossible therefore they may gamble their luck on the lotteries. Usually, those who have lower education may lead to poorer living condition. Hence, the lower income people may build their dream to have a luxury life on gambling. They thought that the gambling is the easiest way to attain their dream. It will cause them willing to gamble in the lotteries instead of spending money on the basics such as foods, shelter and so on.

2. Lotteries are regressive forms of taxation. How would this suggest that regulations would be instituted? How do these who argue that greater regulation is unnecessary (note that the argument is not that the lotteries are not regressive, only that even though they are regressive, they are still allowable and should be free from greater regulation)?...
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