Paddy Power retail betting service report

Table of Contents

Executive Summary

Section A

Section B
Intangibility
Inseparability
Heterogeneity
Perishability
Lack of Ownership

Section C
Fragment: Decision on betting
Fragment: Travel to shop
Fragment: Enter the Shop
Fragment: Place the bet
Fragment: Settle the payment
Fragment: Get the betting slip
Fragment: Leave the Shop

Section D
Pest Analysis
Key factors for challenges and opportunities

Section E

Bibliography

Appendixes
Appendix No. 1
Appendix No. 2
Appendix No. 3

Executive Summary

Being a part of larger multibillion gambling industry betting shops is largely ignored by academic research (Cockrill, Goode and Emberson, 2008 p. 189). This report will shed the light on betting industry specifics from services marketing prospective with particular reference to Paddy Power retail bookmakers in Ireland. Our team of marketing consultants will analyse and evaluate Paddy Power’s retail business using relevant analytical tools and data in order to provide appropriate recommendations and to ensure report’s credibility. Parts A and B describe the services and discuss fundamental issues arising in service provision. Part C breaks up the service process into fragments critically analyzing each part. Part D looks at the broader macro-environment that service organization finds itself in. Part E provides relevant recommendations considering analised information on Paddy Power.

Section A

“A service is any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything” (Kotler et al, 2001, p535).

Paddy Power has the largest chain of retail bookmaking shops in the country and a stock market capitalisation of almost 1.1bn. They operate out of a total of 258 retail outlets (190 in Ireland, 8 in Northern Ireland and 60 in the UK) and 4 shops at racecourses. The company has nine distribution channels including shop outlets, telephone betting, online betting, online poker, online casino, online games, online bingo, financial spread betting and mobile betting. “With all the talk of virtual ventures, Paddy Power is keen to reinforce the message that the retail business is still Paddy Power’s core business” (Brophy, 2006).

Inside these outlets, punters can choose from multiple betting opportunities, ranging from horse racing, greyhound racing and football for the more hardcore and frequent gambler to novelty bets like Big Brother winner for the more occasional gambler. The customer exchanges money in return for a betting slip and waits for the result of their bet.

Section B

A company must consider five main service characteristics when designing marketing programmes: intangibility, inseparability, heterogeneity, perishability and lack of ownership.

Intangibility

When purchasing a product the customer can touch, smell, listen or sample the product. All this can help the customer to examine what is on offer and to make choices between competing brands. As you go to a bookmaking shop you exchange money for your betting slip with the final outcome of profit or loss unknown.

Inseparability

Inseparability means that the customer often comes into direct contact with the service provider. In a bookmaker, the staff team has a dual purpose. They have to deliver their aspect of the service efficiently, but they also have to interact with the customer in the delivery of the service. A customer needs assistance in making a bet, a friendly and co-operative employee can help them write down the correct details. It is essential for service staff to be trained to interact well with clients.

Heterogeneity

Paddy Power provides a service to a customer that is fun, enjoyable and hopefully profitable. Customer satisfaction is hard to measure in bookmakers. The experience and emotion felt by the punter each day will be completely different. A customer’s success could vary daily or weekly. Friendly and polite staff can also enhance the service. For instance a new customer coming into the shop for the first time who needs advice on how to place a bet, if an employee can help and assist them in an appropriate manner it may leave a lasting impression and the chances are he/she will revisit.

Perishability

Services cannot be stored for later sale or use. In a bookmakers if no one backs a particular race on a particular day then the revenue earning opportunity is lost forever. “Sometimes changes in demand or events within the marketing environment mean a flood of extra customers. This can put severe strain on the service delivery system and on capacity, if the service provider cannot respond in sufficient time” (Brassington & Pettitt, 2000, p 945). An example of this would be a busy racing festival. During this week Paddy Power have to ensure that they sufficient staff to deal with the extra customers.

Lack of Ownership

“When customers buy physical goods such as cars and customers, they have personal access to the product for an unlimited time. “They actually own the product.” (Kotler et al, 2001, p. 543) When you place a bet with Paddy Power, it is only relevant for a short period of time. Once the race or match is over the bet is no longer deemed valid. “Because of the lack of ownership, service providers must make a special effort to reinforce their brand identity and affinity with the consumer.” (Kotler et al, 2001, p. 543) Paddy Power offer incentives to customers to use their service again. They offer money back specials in football matches and horse races and have free competitions that their customers can enter. An example of this is a new competition they have created dubbed ‘Last Man Standing’ (Appendix No.1).

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