Reference no: EM133270403

Case: Lotteries company Supreme Ventures Limited (SVL) has signed an agreement with the Guyana Gaming Authority. The agreement should see SVL opening up gaming operations in Guyana, a market currently dominated by the Princess Hotel and Casino and affiliate of the Canadian Bank Note Company, Guyana Lottery. Guyana Marriott is also looking to get a toe-hold into the market.

SVL, in a statement to shareholders on the Jamaica Stock Exchange, said the agreement with Guyana Gaming Authority is subject to a confidentiality clause, and in this regard, will make full disclosure of its plans for the market as soon as SVL is able and permitted to.

It's not clear if the Guyana agreement is part of ideas put forward by at least one newly appointed director Gary Peart to boost revenue earnings. Last October, Peart told journalists that he is confident that the lottery and gaming company could, in months, increase profit by $1 billion under the new board of directors. "We have some ideas, which ultimately we will discuss with the other board members and if we get consensus around it, it will help the company forward. I'm sure that when we go in they will also have their ideas which we can always discuss and that's what makes a company strong, when the leadership of the company is constantly looking at different ways for it to grow," he told the Caribbean Business Report during an emergency press conference last year.

Of the $135 billion industry; SVL Group recorded revenue totalled $45 billion for its financial year ended 2016, a two per cent increase over prior year's result. The company noted in its financial report that the growth was mainly driven by Personal Identivation Number (PIN) code products which grew 26 per cent. However, Cash Pot revenues fell by $429.214 million, attributable to a low pay-out trend.

Currently, SVL has Super Lotto as the Group's only multi-jurisdictional game. Company financials showed that Super Lotto continue to contribute positively to the portfolio with sales increasing by $22.735 million or 4 per cent in 2016. Jackpots were won in Jamaica and St Maarten in 2016 and in Jamaica and Barbados (twice) in 2015. Aside from that, SVL airs international horse-racing for locals to bet on.

Reports from Guyana list games such as 'Lotto Supa 6,' 'Lucky 3,' 'Daily Millions,' and 'Draw De Line'; along with a range of popular 'scratch' games as gaming products currently offered by the Guyana Lottery Company. Additionally, Guyana Lottery was recently handed a five-year renewable contract that allows it to introduce new games using Video Lottery Teller Machines such as casino slot machines and online gambling.

Question:

Supreme Ventures Limited (SVL) has decided as part of its expansion thrust, to go for the Guyana market. In deciding to go outside of its domestic market, a company has several options it could consider using when entering foreign markets, such as Guyana.

Describe two (2) possible market entry methods that SVL could consider when going international. Which one would be most suitable for SVL to use to enter the Guyanese market?

The decision to enter the Guyana market would require SVL to consider new product introductory pricing strategies. Describe the two new product introductory pricing strategies that are available to SVL and state two (2) conditions under which each can be used. Which one would you recommend and why?

Describe the new product development process the company would have gone through in introducing a new product in the market.

The Case mentions that Cash Pot revenues fell by $429.214 million. There was a similar result the year before. The game has been in existence since the company started in 2001. With your knowledge of the Product Life Cycle (PLC), identify the game's possible stage in the PLC and suggest two (2) methods of rejuvenating sales in the product.

SVL is planning a promotional campaign to boost the sales of its products. Although it wants to use social media to promote its products as many people are using Facebook, Instagram and YouTube, the company realizes that traditional promotional tools such as personal selling and advertisement are still invaluable.

Define personal selling and advertisement and give three (3) advantages and three (3) disadvantages of each of the tools.