Marketing Mix Analysis of MGM Resorts International (MGM).

Introduction

In the dynamic world of hospitality and entertainment, the strategic deployment of the marketing mix is crucial to capturing and sustaining consumer interest. MGM Resorts International, a powerhouse in the industry, provides an exemplary case study in the effective use of the fundamental pillars of marketing: Product, Place, Promotion, and Price. This post delves into how MGM leverages each of these components to maintain its status as a leader in the global entertainment and hospitality market.

Product

The range of products offered by MGM Resorts International encompasses a comprehensive selection of upscale amenities and experiences designed to cater to both leisure and business market segments. Below is the detailed product mix:

• Luxury hotels and resorts: MGM Resorts operates a portfolio of 29 unique hotel and destination gaming offerings in the United States and Macau. Among these are renowned destinations such as Bellagio, MGM Grand, Mandalay Bay, and The Mirage in Las Vegas; and MGM Macau and MGM Cotai internationally.
• Casino gaming facilities: MGM Resorts provides a diverse array of gaming options including slot machines, table games, poker, and sports betting. MGM Grand Las Vegas houses one of the largest casino floors in Las Vegas, encompassing approximately 171,500 square feet of gaming space.
• Entertainment and shows: The company offers various live entertainment options ranging from Cirque du Soleil performances to concerts and boxing matches. In 2019, MGM Resorts hosted over 8,000 shows across its properties.
• Spa and fitness services: Each property includes luxury spa and gym facilities, aimed at providing holistic wellness experiences. Bellagio’s Spa & Salon offers a 65,000-square-foot facility that provides a multitude of treatments and services.
• Conference and event spaces: MGM Resorts’ properties include over 3 million square feet of conference space across all locations. ARIA Resort & Casino alone features 500,000 square feet of meeting space.
• Dining venues, from casual to fine dining: The company offers over 350 dining outlets ranging from fine dining to quick service. Restaurants such as Joel Robuchon at the MGM Grand Las Vegas hold multiple Michelin stars.
• Retail shopping outlets: The properties also feature expansive retail spaces offering luxury brands and boutique stores. The Shops at Crystals, located at the ARIA campus, features around 600,000 square feet of retail space showcasing more than 50 luxury brands.

This diverse product strategy enables MGM Resorts to attract a wide range of customers by offering a variety of experiences from luxury escapades and gaming to business conferences and wellness retreats. In maintaining high standards across all categories of their product mix, MGM Resorts sustains its reputation as a leader in the global hospitality and entertainment industry.

Place

MGM Resorts International (MGM) strategically positions its operations to maximize market reach and accessibility. The company's placement strategy focuses on targeted geographic locations, both domestically within the United States and internationally, to attract a diverse set of visitors.

Domestic Operations: MGM Resorts owns and operates a significant portfolio of properties in various key regions across the U.S.:

• Las Vegas, Nevada - The company owns 13 properties on the Las Vegas Strip, including major names such as Bellagio, MGM Grand, and The Mirage.
• Regional U.S. - Beyond Nevada, MGM Resorts owns additional properties in states like Maryland, Michigan, Mississippi, New Jersey, and Massachusetts.

International Operations: MGM has expanded its global footprint, particularly in Asia:

• China - MGM's notable presence includes MGM Macau and MGM Cotai, which are significant contributors to its international revenue. In 2019 alone, MGM China Holdings Limited reported a revenue of HKD 22.8 billion.
• Japan - MGM is actively engaged in the development of an integrated resort in Osaka, which is expected to be a large-scale project fostering international tourism.

Online and Digital Platforms: To facilitate accessibility and convenience for its customers, MGM Resorts has invested in robust online booking platforms:

• Official websites and mobile apps provide user-friendly interfaces for booking hotel rooms, shows, and experiences across all MGM properties.
• Partnerships with major online travel agencies (OTAs) enhance visibility and broaden market reach.

MGM Resorts’ strategic placements in tourist-heavy areas and major metropolitan cities are pivotal to their market strategy, aiming to capture a broad demographic, ranging from luxury travelers to casual vacationers seeking entertainment and leisure experiences.

Promotion

MGM Resorts International utilizes a comprehensive approach to promotion to engage a broad audience, leveraging traditional and digital platforms.

Advertising through traditional media: MGM devotes significant resources to traditional media channels. In 2019, the company spent approximately $154 million on advertising, as part of its overall sales and marketing expenses.

Online and social media marketing campaigns: Digital marketing forms a large part of MGM’s promotional strategy. The MGM Resorts app, relaunched in 2019, saw a significant increase in downloads due to targeted online promotions. Additionally, social media campaigns on platforms like Instagram and Facebook feature celebrity endorsements and information on resort amenities and events, aimed at enhancing customer engagement and conversions.

• Instagram followers: around 300,000 (as of 2022)
• Facebook followers: approximately 1.3 million (as of 2022)

Partnerships with major entertainment entities: MGM Resorts International has exclusive partnerships with entities like the National Basketball Association (NBA) and major music festivals. These partnerships help in leveraging the brands' visibility and enhance promotional content reach.

Loyalty programs for returning customers: MGM's loyalty program, M life Rewards, has over 34 million members as of the end of 2022, which highlights its effectiveness in customer retention and brand loyalty.

Special events and exclusive promotions: MGM Resorts hosts numerous events such as boxing matches, concerts, and culinary festivals which are heavily promoted across all platforms. These events are pivotal in promoting the resort’s diverse attractions.

Email marketing for personalized offers: MGM’s targeted email campaigns are designed based on guest preferences and past behaviors. Conversion rates from these personalized emails have consistently shown an upward trend, with a 10% increase in CTR (Click-Through Rate) year-over-year.

Collaborations with celebrities and influencers: In efforts to reach wider audiences, MGM Resorts has collaborated with influencers and celebrities. This strategy has proven effective in amplifying promotional campaigns, with notable examples including collaborations with renowned artists and sports figures.

Price

Understanding the pricing strategies of MGM Resorts International is crucial for assessing its competitive positioning within the hospitality and gaming industry. The company employs a dynamic pricing model that integrates several key factors:

• Pricing varies significantly by location, reflecting the geographic diversity of its properties, which range from regional U.S. markets to internationally acclaimed destinations like Las Vegas and Macau.
• Seasonality influences prices, with peak rates observed during major holidays, summer months, and special events, while off-peak periods may see reduced rates to increase occupancy.
• Service levels at MGM properties also dictate pricing variations—luxury offerings such as the Bellagio and ARIA Resort typically command premium rates compared to more budget-friendly options like the Excalibur Hotel.

Competitive Pricing Strategy is deployed to attract both high-end clientele and cost-conscious guests. MGM Resorts often sets its pricing slightly below that of closest competitors in similar markets to gain market share, while ensuring profitability.

• For instance, in its Las Vegas operations, which generated a revenue of $2.3 billion in the last quarter, competitive pricing has helped maintain a strong presence amid intense competition from nearby luxury resorts.

MGM’s marketing mix also emphasizes special package deals for extended stays and loyal customers:

• Packages often include hotel stays, entertainment, spa services, and dining, aimed at enhancing guest experience and increasing the length of stay.
• Variable pricing strategies during high-demand periods such as New Year's Eve and major sports events allow the company to maximize revenue per available room, a key industry metric that stood at $150 on average in the past year.
• Discounts and special rates are frequently offered to members of the MGM Rewards loyalty program, which boasts over 34 million members, providing incentives for repeat visits and increasing customer retention rates.

The blend of strategic pricing with loyalty incentives and seasonal adjustments helps MGM Resorts International maintain its status as a leading player in the global hospitality and gaming markets, adapting to consumer demand patterns and economic shifts in various locations. Reflecting on their financial statements, the revenue impact of such diverse and flexible pricing strategies continues to play a critical role in the company’s overall financial health.

Conclusion

Analyzing the marketing mix of MGM Resorts International highlights how effectively the company blends product, place, promotion, and price to maintain a competitive edge in the hospitality and entertainment industry. By offering a superb range of services and experiences tailored to diverse customer needs, and strategically promoting these through a mix of modern digital channels and traditional advertising, they manage to stay relevant and appealing. Their pricing strategies are designed to cater to different budget ranges, enhancing accessibility and customer satisfaction. Understanding these aspects provides valuable insights into the strategic operations of leading players in the global market and underlines the importance of a well-crafted marketing mix.