Primm Valley Casino Resorts shifted its strategy away from the usual casino crowd in Las Vegas, toward a niche population of Latinos. The company focused its attention on the Latino population in Southern California. Over time, this strategic change from the mainstream to the niche market has led to success. Primm Valley Casino Resorts achieved higher revenues from the hotel, casinos, restaurants and other revenue-generating components of its business. This case shows that the success of Primm Valley Casino Resorts is linked to the alignment of the firm’s strategy and organizational culture to the culture of the target customers and their behaviors in the context of the market. The case also emphasizes the significance of niche markets or market segments in contributing to the success of firms that experience difficulties in competing in the main markets or market segments.
The success of Primm Valley Casino Resorts in its new strategy of targeting the market segment of Latinos in Southern California shows how firms can succeed in new target market segments.
What made Primm Valley Casino Resorts’ new strategy successful?
Primm Valley Casino Resorts is an example of strategic development based on opportunities in unmet needs in the target market. These unmet needs happen to be in the niche market composed of Latino customers. The success of the new strategy of Primm Valley Casino Resorts is linked to a number of key factors, as follows:
- Recognition of demand in the niche market segment
- Strategic organizational change to capture the niche market segment
Recognition of demand in the niche market segment. The first factor that contributed to the success of Primm Valley Casino Resorts’ new strategy was the recognition of the demand in the niche market segment of Latinos in Southern California. The company initially had the notion that Latinos did not gamble and casinos would not profit from them. However, after conducting market research, Primm Valley Casino Resorts realized that there was demand in the Latino population. Thus, the first step in the process of change in market strategy was the increased awareness or knowledge about the market condition. This knowledge was based not just on speculation or popular belief. Instead, the firm’s new knowledge was based on observations and research on the market. Primm Valley Casino Resorts took time to examine the situation of Latinos as a market segment. The research results showed that there was opportunity for the company to cater to the needs of this segment.
Strategic organizational change. Primm Valley Casino Resorts benefited from the change in the features of its products and services. The company started hiring more Spanish-speaking workers. The company also started using signs written in Spanish. Latino music was added to entertainment programs in the Primm Valley Casino Resorts facilities. Food and beverage were changed or adjusted to suit the preferences of Latinos. All of these changes created a new business organization that has proven to be attractive to Latinos. Primm Valley Casino Resorts used organizational change based on adopting a market-driven strategy. A market-driven strategy is based on market characteristics. Instead of creating demand in the market, Primm Valley Casino Resorts changed to align itself to the Latino segment’s demand that was already present. The alignment between the business and its market segment was a major factor that led to Primm Valley Casino Resorts’ success.
The combination of the recognition of demand in the new target market segment, and the strategic organizational change enabled Primm Valley Casino Resorts to operate profitably under this new strategy. The organizational change is based on such recognition of demand.
Principles & Ideas that Explain Primm Valley Casino Resorts’ Success
The three main principles and ideas that explain Primm Valley Casino Resorts’ success are as follows:
- Reference groups
Segmentation. Segmentation is part of the strategic success of Primm Valley Casino Resorts. Segmentation involves focusing on a market segment, which in this case is the segment of Latinos in Southern California. In segmentation, the company must provide products and services that are aligned to the needs and preferences of this market segment. Primm Valley Casino Resorts changed its business activities to achieve this alignment.
Reference Groups. The company used reference groups in order to attract more of the customers into the casino. For instance, Primm Valley Casino Resorts used certain music bands with whom Latino customers could relate and identify. Because of such link between the identity of Latino customers and the identity of the music bands, these customers became more attracted to Primm Valley Casino Resorts and provided a bigger revenue base for the business.
Location. Primm Valley Casino Resorts used location as a success factor. The company took advantage of the fact that the Latinos in Southern California were nearer to Primm Valley Casino Resorts than the main attractions of Las Vegas.
Lessons on Targeting a New Market
The case of Primm Valley Casino Resorts shows that alignment of the business to the market is a critical success factor. The company recognized opportunities and demand in the market segment of Latinos in Southern California. The firm also made organizational changes to address the needs and preferences of this market segment. Therefore, to achieve success like Primm Valley Casino Resorts did, firms must ensure business-to-market alignment through organizational change that is based on proper market research.
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