Macau casinos putting cost cuts above customer care?

As Macau’s gross gambling revenue has slumped, operators have been paring costs to the bone to protect margins, with the first casualty usually being spending on marketing and player reinvestment. However, this may be a short-sighted approach that will cost dearly in the longer term. This situation being played out at casino properties in Macau reminds me of an old dilemma in marketing—does advertising lead to sales or do sales lead to marketing? Any Marketing 101 student will tell you, without a moment’s hesitation that advertising should lead to sales. Yet, witness the behavior of most companies: when sales are down, advertising budget is often the first casualty. Financial crisis is a time when every person in the company needs to pull together and try their best to nurture their most valued asset, the customer. Yet, it is precisely at such times that you find companies cutting back on “discretionary” expenses in...

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