2010 and Beyond | Executive Summary 1

Strategic Marketing Plan | Jennifer Le, Julia Xu, and Jim MacLaren BUS 343 – E.107

GREAT

CANADIAN

GAMING

CORPORATION

2010 AND BEYOND

TABLE OF CONTENTS

Executive Summary ....................................................................................................................................................4

Mission Statement ..................................................................................................................................................4

GVRD Marketing Committee Objectives ....................................................................................................................5

Financial Objectives ................................................................................................................................................5

Reduce Key Debt Ratios ......................................................................................................................................5

Diversify Revenue Base .......................................................................................................................................5

Marketing Objectives ..............................................................................................................................................6

Triple the number of Live Events ........................................................................................................................6

Increase Hotel Occupancy ...................................................................................................................................6

Increase Loyalty Program Participation ..............................................................................................................7

Maintain Market Share in GVRD .........................................................................................................................7

Objectives Summary ...............................................................................................................................................7

Current Situation ........................................................................................................................................................8

Casino Gaming Market............................................................................................................................................8

Long-term Debt Position .........................................................................................................................................8

Environmental Analysis ..............................................................................................................................................9

Externalities ............................................................................................................................................................9

Political ................................................................................................................................................................9

Economic .............................................................................................................................................................9

Social ...................................................................................................................................................................9

Technological ................................................................................................................................................... 10

Competitor analysis ............................................................................................................................................. 10

Indirect Competitors ........................................................................................................................................ 10

Direct Competitors ........................................................................................................................................... 11

Customer Analysis ................................................................................................................................................... 12

Segmentation ....................................................................................................................................................... 12

SWOT Analysis ......................................................................................................................................................... 14

Opportunities ....................................................................................................................................................... 14

Threats ................................................................................................................................................................. 14

Strengths .............................................................................................................................................................. 15

Weaknesses ......................................................................................................................................................... 15

Marketing Strategies ............................................................................................................................................... 16

Customer Retention Strategy .............................................................................................................................. 16

Tactical Plans ........................................................................................................................................................... 17

Increase Customer Service ................................................................................................................................... 17

Reward Loyalty..................................................................................................................................................... 17

Keep Pricing Competitive ..................................................................................................................................... 17

Ensure Access ....................................................................................................................................................... 18

Customer Retention Program .............................................................................................................................. 18

Contingency Plan ................................................................................................................................................. 19

Financial Projections ................................................................................................................................................ 20

5 Year Cost Analysis ............................................................................................................................................. 20

Revenue Forecast ................................................................................................................................................. 20

Break-even Analysis ............................................................................................................................................. 21

Change Control ........................................................................................................................................................ 22

Review Schedule .................................................................................................................................................. 22

Document Change Control .................................................................................................................................. 22

Goals Change Control .......................................................................................................................................... 22

Performance ........................................................................................................................................................ 23

Tracking Resources & Responsibilities ............................................................................................................. 23

Tracking Results ................................................................................................................................................ 23

Corrective Actions Required ............................................................................................................................ 23

Bibliography ............................................................................................................................................................. 24

Appendix 1: Performance Tracking Worksheets .................................................................................................... 26

Appendix 2: Loyalty Program Idea Board ............................................................................................................... 27

2010 and Beyond | Executive Summary 4

EXECUTIVE SUMMARY

Since 1986, Great Canadian Gaming Corporation (GCGC) has excited and entertained our valued customers with

gaming and entertainment services in British Columbia, Ontario, Nova Scotia and Washington State. Our

marketing department is responsible for 14 casinos, 5 horse tracks, 43 dining option, 5 show theatres, 4 tele-

theatres, and 1 hotel. We exist to serve a diverse customer base and therefore most of our marketing activities

are localized to each of our properties. However, on occasion we need to consider regional marketing strategies

in response to specific opportunities or threats.

The 2010 Olympic and Paralympic Games in Vancouver and Whistler will impact GCGC in many ways. Our

management team has requested that we form a Greater Vancouver Regional District (GVRD) Marketing

Committee to evaluate the impact of the Olympics on our business. With representation from our Gaming,

Food & Beverage, and Entertainment & Lodging business units, this report seeks to outline the issues and

present a detailed argument for pursuing a regional marketing strategy that supplements existing marketing

activities.

MISSION STATEMENT

“Great Canadian strives to be the leading gaming and entertainment destinations in the Northwest by providing

superior experiences through unparalleled products, facilities, and services” (Great Canadian Gaming Corp. AIF,

2005).

5 GVRD Marketing Committee Objectives | 2010 and Beyond

GVRD MARKETING COMMITTEE OBJECTIVES

The objective of this committee is to evaluate the specific opportunities and/or threats to GCGC related to the

2010 Olympic and Paralympic Games and recommend a course of action. Of special concern, is the risk

associated with infringement of the International Olympic Committee (IOC) and Vancouver Olympic

Committee’s (VANOC) licensed trademarks and copyrights.

FINANCIAL OBJECTIVES

REDUCE KEY DEBT RATIOS

GCGC’s long-term debt is taking cash flow away from key operations. As shown below, our expansion efforts

over the last four years have put us at a clear competitive disadvantage both in terms of liquidity and leverage.

Our goal over the next five years is to drive the Current Ratio from 1.9 to 1.1 and the Total Debt to Equity Ratio

from 1.39 to 0.83. Both of these goals are based on the current industry benchmark, and may need to be

adjusted annually.

Figure 1: Current Ratio1 Figure 2: Total Debt to Equity Ratio1

DIVERSIFY REVENUE BASE

Our 2006 distribution of revenues among the three business units was 83% from Gaming, 13% from Food &

Beverage, and 4% from Entertainment and Lodging (Great Canadian Gaming Corp. MD&A, Dec 31, 2006). One

of our objectives is to diversify this distribution to 75% Gaming, 15% Food & Beverage, and 10% Entertainment

and Lodging by 2010. Entertainment & Lodging is our most profitable business unit in terms of the relative

contribution margin. We believe this goal is attainable since further growth in gaming is unlikely due to

regulatory limitations.

1 GCGC ratios from (Great Canadian Gaming Corp. AIF, 2005) and Industry data from (FPinfomart.ca)

1.9

1.11

1.5

2

2002 2003 2004 2005

Great Canadian Gaming Corp.

Industry Benchmark

1.39

0.83

0

0.5

1

1.5

2002 2003 2004 2005

Great Canadian Gaming Corp.

Industry Benchmark

2010 and Beyond | GVRD Marketing Committee Objectives 6

Figure 3: Revenue Distribution Target Figure 4: 2006 Revenues by Business Unit2

In order to reduce key debt ratios, we must earn more profit. To earn more profit we must increase the

contribution margins from some of the products or reduce costs. Since gaming margins are governed by

agreements with the British Columbia Lottery Corp. (BCLC), we must pursue growing our other two business

units. We expect that by growing our Food, Beverage, Entertainment, and Lodging revenues our gaming

revenues will benefit from cross-promotion.

MARKETING OBJECTIVES

TRIPLE THE NUMBER OF LIVE EVENTS

Our Entertainment & Lodging business unit is very profitable, and by growing this business we can meet our

revenue goals. Currently, the Red Robinson Show Theater in Coquitlam and the River Rock Show Theater in

Richmond only host events on Thursday, Friday and Saturday nights. By increasing the number of live events,

from 3123 to 936 over the next five years we hope to achieve our revenue diversification goals.

INCREASE HOTEL OCCUPANCY

The RiverRock hotel currently enjoys a 70% occupancy rate at an average of $160 per night (Constantineau,

2007); however, many of Vancouver’s comparable 4-star hotels achieve a 90% occupancy rate. Based on this we

aim to increase the hotel’s occupancy rate from 70% to 90% within the next two years.

2 Estimated from (Great Canadian Gaming Corp. MD&A, Dec 31, 2006) 3 Annual Estimation based on three month sample from (GCGCwebsite)

0% 50% 100%

Current - 2006

Target - 2010

Gaming Food & Beverage Entertainment & Lodging

0

50000

100000

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Gaming Food & Beverage Enterainment & Lodging

7 GVRD Marketing Committee Objectives | 2010 and Beyond

INCREASE LOYALTY PROGRAM PARTICIPATION

BC Gold, our current loyalty program, has 42,000+ members, however approximately 7% of cards issued are

deemed “active” (Great Canadian Gaming Corp. MD&A, Dec 31, 2006). Customer feedback the BC Gold is

unattractive because earning points is limited to slot machines and rewards are limited to cash. Our objective is

to re-launch this program with more choices for our customers, and increase the participation rate from 7% to

15% by 2010.

MAINTAIN MARKET SHARE IN GVRD

GCGC owns a dominant 54% market share, as measured by the BCLC (Great Canadian Gaming Corp. MD&A, Nov

9, 2006). Given the number of competitors in the GVRD and regulatory blockades on growth, we feel we have

achieved the near maximum in market share. This is a position worth protecting, therefore our objective is to

maintain 53-55% market share in the GVRD in each of the next five years.

Figure 5: GVRD Market Share4

Slot Win

Table Games Win

Total GVRD Market Share

OBJECTIVES SUMMARY

All of the objectives summarized below are attainable in the timeframes outlined provided that we competently

supplement our localized marketing activities with a regional strategy that is focused on these goals.

Table 1: Summary of Objectives

Financial Goals Marketing Goals

Key Debt Ratios Revenue Proportion No. of

Live Events

Hotel Occ. Rate

Loyalty Program

Participation

GVRD Market Share Year

Current Ratio

Total Debt to Equity Ratio Gaming

Food & Beverage

Ent. & Lodging

2008 ( - ) ( - ) 85% 8% 7% 468 80% 9% 53-55%

2009 ( - ) ( - ) 80% 9% 11% 624 90% 11% 53-55%

2010 ( - ) ( - ) 75% 10% 15% 780 90% + 13% 53-55%

2011 1.1 0.83 75% 10% 15% 936 90% + 15% 53-55%

4 (Great Canadian Gaming Corp. MD&A, Nov 9, 2006)

0.44

0.56

GCGC Competition

0.63

0.37

GCGC Competition

0.540.46

GCGC Competition

2010 and Beyond | Current Situation 8

CURRENT SITUATION

CASINO GAMING MARKET

The casino gaming market in British Columbia is

approximately 1.14 billion dollars after prize

payouts. BCLC, through its own planning, expects

the market to grow by 4.6% in each of the next four

years (British Columbia Lottery Corporation, 2006).

This growth, coupled with the windfall of customers

expected during the 17 days of Olympic events,

cements our belief that there is strong and resilient

demand for our products and services.

Table 2: Size of Casino Gaming Market5

Even so, we have concerns about our positioning to take advantage of this growth. Though we own and operate

5 of the 17 casinos in British Columbia many internal and external factors jeopardize our potential success.

LONG-TERM DEBT POSITION

Four years of aggressive expansion have saddled GCGC with over 390 million dollars in long-term debt. This debt

load is having a material adverse effect on our business by:

• Increasing our vulnerability to adverse economic and industry conditions

• Taking cash away from profit generating operations to service the debt

• Putting us at a competitive disadvantage within the industry

• Limiting our flexibility in planning for or reacting to changes in our customer’s needs

The success or failure of whatever marketing strategy we pursue will be amplified by our debt position.

5 (British Columbia Lottery Corporation, 2006)

y = 0.046x + 1.145

1.1

1.15

1.2

1.25

1.3

1.35

2007 2008 2009 2010

$ in

Bill

ion

s

9 Environmental Analysis | 2010 and Beyond

ENVIRONMENTAL ANALYSIS

EXTERNALITIES

POLITICAL

GCGC is highly regulated by all levels of Government. Under the BC Gaming Control Act, municipalities are

allowed to enact bylaws that prohibit slot machines in their communities. Some other restrictions include:

Quantity of slot machines and table games

Hours of operation

Who we hire in a supervisory or management position

Who can own voting shares in the company

To provide the industry with some guidance, the BC Government launched their “Responsible Gaming Strategy”

in 2003 (Ministry of Public Safety & Solicitor General, 2006). Among other things this doctrine outlines how

casino applications for expansion will be evaluated and how much of the government’s share of gambling

revenues will be distributed to charities and support services for “problem gamblers”.

ECONOMIC

British Columbia’s economy is now being fueled by the run up to the 2010 Olympics. The VANOC will spend an

estimated 2 billion dollars in preparation. Federal, Provincial, and Municipal Governments will invest another 2

billion dollars in infrastructure prior to the games. There will also be an estimated 4 billion dollars in indirect

spending as the private sector readies to host the Olympics (VANOC Quick Facts). The implication of this for

GCGC is two-fold. We foresee continued growth in revenues as BC’s economy performs well in each of the next

three years. However, we must prepare for a “hang-over” effect as economy winds down from all the Olympic

investment in 2011.

SOCIAL

We are very concerned about the gap between public opinion and current research on the social impact of

gambling. Problem Gambling is defined as any individual with a gambling impulse control disorder (Ministry of

Public Safety & Solicitor General, 2006). Problem Gamblers harm themselves, their families, and their

communities. BCLC campaigns such as, “Know your limit, play within it” attempt to direct these individuals to

support services before tragedies such as job loss, divorce, and bankruptcy occur. Current public opinion is that

2010 and Beyond | Environmental Analysis 10

“Problem Gambling” is getting worse and that the expansion of slot machines is the reason.6 Using an

international standard questionnaire for measuring Problem Gambling, Statistics Canada rendered evidence that

“Problem Gambling” is declining in BC, and playing slot machines presents no additional risk to consumers

compared to other forms of gambling (Farris & Wynne, Canadian Problem Gambling Index: Final Report, 2001).

TECHNOLOGICAL

The integrity and fairness of all gaming technology is critical to our reputation and future trust with our

customers. All gaming equipment is supplied by the BCLC, who contracts independent testing to ensure

integrity and fairness. Manufactures of this equipment have been publically warned to cease the use of

subliminal advertising and messaging (Saville, 2007).

COMPETITOR ANALYSIS

INDIRECT COMPETITORS

Consumer changes in preferences for entertainment can be rapid and extreme. Even though 14.5% of

Canadians’ entertainment expenditure is spent on lotteries and in casinos (Stafford, 2003), other forms of

gaming and entertainment compete with GCGC for consumer’s discretionary expenditures.

Figure 6: Entertainment Services Market7

As the choices increase more, of our customers could potentially be attracted away. In 2010, those choices will

also include Olympic sporting venues, ceremonies, cultural events, and festivals.

6 Unquantifiable opinion based on statements in (British Columbia Lottery Corporation, 2006) 7 (Stafford, 2003)

14.5%

38.6%

11.7%

10.4%

7.7%

7.6%4.6% 3.8% 1.3% Casino

Cable & Satellite

Movie Rentals

Cinema

Live Performing Arts

Bingo

Live Sports

Museums, etc.

Video Game Rentals

11 Environmental Analysis | 2010 and Beyond

DIRECT COMPETITORS

Approximately 1.14 billion dollars of revenue is generated by the 33 casinos and community gaming centres that

operate in British Columbia each year (Where the Money Goes, 2006). In the GVRD, Gateway Casinos Inc. and

Edgewater Casino Inc. are our closest competitors. Edgewater Casino, in downtown Vancouver, has recently

emerged from creditor protection under new US ownership. Paragon Gaming has a reputation for “turning-

around” unprofitable operations and the deep pockets needed to renew this False Creek property.

Figure 7: No. of Slot Machines - Comparison8

Figure 8: No. of Table Games - Comparison8

Of more immediate concern, Gateway Casino is in the process of renovating both of its lower mainland

properties. The new Riverboat property in New Westminster will open in Winter 2007, and the Gateway

Burnaby Casino will open in Spring 2008. As shown in figures 7 & 8, not only will these renovations introduce

hotel, restaurant, bar, and conference facility revenues to Gateway, but their gaming capacity will increase

substantially (Great Canadian Gaming Corp. MD&A, Dec 31, 2006). This increase in capacity not only threatens

our 54% market share, but also introduces the first GVRD competitor with an integrated entertainment offering

similar to our RiverRock and Boulevard properties.

8 (Great Canadian Gaming Corp. MD&A, Nov 9, 2006)

0

200

400

600

800

1000

1200

Riverboat New West

Gateway Burnaby

RiverRock Richmond

Boulevard Coquitlam

Current After Renovations

0

20

40

60

80

100

120

Riverboat New West

Gateway Burnaby

RiverRock Richmond

Boulevard Coquitlam

Current After Renovations

2010 and Beyond | Customer Analysis 12

10%

10%

20%

20%

26%

26%

20%

20%

11%

11%

13%

13%

0% 20% 40% 60% 80% 100%

Local

Traveller

18 - 24 25 - 34 35 -44 45 -54 55 - 64 65 +

CUSTOMER ANALYSIS

By dividing the market for GCGC’s services

using demographics, buying behaviour, and

residency we can better position our marketing

mix to target specific groups. Our services

appeal to a broad demographic, as shown in

Figure 9 (Azmier, 2005). However, we must

augment this information with other

characteristics and attributes. Based on buying

behaviour we have divided our market into five

main segments.

SEGMENTATION

1. Groups / Couples

in the age range of 35-65+

usually come with 2 or more friends, and view it as a social experience

don’t spend a lot of money at one time and play the slow, minimal winning games

come frequently and consume all types of services

2. Casual/leisure

in the age range of 19-54

usually come alone or with spouse, and treat their visit as an “evening out”

value entertainment and dining options

come occasionally and consume all types of services

3. Promo Chasers

in the age range of 35-65+

will take advantage of promotions and discounts for concerts, shows, tournaments, and free

points to obtain prizes

Value receiving coupons and discounts

may come occasionally or frequently but limit their expenditure

Figure 9: Customer Demographics

13 Customer Analysis | 2010 and Beyond

4. Business professional

in the age range of 25 - 55

often come with clients or co-workers

value high level of service

come frequently and spend freely, but do not stay long

5. Pro-gamblers

may be any legal age to gamble

usually come alone to play in tournaments, game clubs, and motivated to win

very experienced with casino games and are sensitive to perceptions of “luck”

come frequently, spend only on gaming, and stay the longest

2010 and Beyond | SWOT Analysis 14

SWOT ANALYSIS

OPPORTUNITIES

Prior to the 2010 Olympics, GCGC has the opportunity to solidify its position as the market leader for integrated

entertainment in the GVRD. During the Olympics the opportunities are more tangible. We expect:

Full occupancy in the RiverRock hotel

Waitlists to access gaming tables and slot machines

Substantial increase in food and beverage sales

Sold out live events at both show theatres

These expectations are based on the large influx of visitors from countries around the world, and our proximity

to Olympic venues in Richmond, Vancouver, and Whistler. Beyond 2010, we have the opportunity to gain and

retain new customer base by delivering exceptional service to all customers during the Olympics.

THREATS

GCGC is currently exposed to a number of internal and external threats. Of particular concern:

1. Company Our current collective agreement with CUPE and UNITE HERE expire in 2008 (Great Canadian Gaming

Corp. AIF, 2005).

Hastings Park Conservatory may appeal court decision to uphold GCGC’s license at Hastings Park for

slot machines.

2. Customer The 2003 ban on smoking ban in restaurants, bars, and casinos had a dramatic effect on revenues.

Further effects of this cannot be foreseen.

More choices for entertainment means potential changes in their long-term consumer preferences

for entertainment

3. Competitor Vancouver city council is actively developing a “downtown entertainment district”, which will be

showcased during the 2010 Olympics

Newly renovated Gateway Casinos in New Westminster and Burnaby

4. Environment BCLC has shown an inability to investigate and restrict access to illegal online gambling. Of 492

investigations initiated in 2005, only 11 were Internet-based (Ministry of Public Safety & Solicitor

General, 2006).

GCGC is very exposed to fluctuations in the interest rate, and other debt instruments

15 SWOT Analysis | 2010 and Beyond

STRENGTHS

GCGC has several strengths that position us well to take advantage of the opportunities discussed. In order of

relevance, they are:

1. Our Customer focused culture

Our management team understands the role of culture and training in stimulating a customer focused

service experience with every interaction and transaction.

2. Our unique and integrated product offering

At one location our customers can find a luxury hotel, a show theatre, convention & meeting space, fitness

centre, spa, multiple dining options, bars, boutiques, a marina complex and of course gaming centres.

3. Our marketing

We know our customers, we track our customers, and we respond to our customer’s changing preferences.

We are able to attract “Vegas style” performers and profitably promote live events.

4. Our location

Proximity to the airport, Olympic venues, and major freeways ensure that our properties are easily

accessible. In 2009, the Skytrain’s Canada line will open the Bridgeport station across the street from the

RiverRock.

WEAKNESSES

GCGC’s weaknesses, in order of relevance, are:

1. Our growth is constrained by government regulation

The British Columbia Lottery Corporation controls the expansion and capacity of casinos. Demand is unmet

in the GVRD.

2. Our brand is closely linked with gambling

Until 1967, gambling in most forms was illegal in Canada. Even though 84% of Canadians gamble, most

people view it as socially undesirable (British Columbia Lottery Corporation, 2006). This is unfortunately

linked to our brand, and reduces our brand equity.

3. Our debt position

The cost of servicing almost 400 million dollars in long term debt harms all operations.

2010 and Beyond | Marketing Strategies 16

MARKETING STRATEGIES

From our analysis of the current situation, the internal and external environment, our competitors, and our

customers we can draw these conclusions. :

Further growth in the Greater Vancouver Regional District is constrained. Even without government

limits on casino expansion, our long-term debt burden, or facility capacity constraints, our dominant

position in the market in itself limits further growth.

The 2010 Olympics is an enormous opportunity for most business in British Columbia, including Great

Canadian Gaming Corporation. We have the opportunity to accommodate and entertain British

Columbians and visitors from around the world during a very exciting time for the city.

Our current marketing strategies will no doubt allow us to fully book the River Rock hotel and sell-out

evening entertainment at both show theatres during the Olympics. We also expect that the casinos will

be full, and that “average time on wait-list” will increase during this time.

If we are not careful, we risk alienating our loyal customer base during a time when British Columbian’s are

going to have to endure traffic congestion, large crowds, security checks, and long lines to access many shops

and services. For this reason, we propose an aggressive Customer Retention marketing strategy.

CUSTOMER RETENTION STRATEGY

Customer Retention should be a “staple” in any marketing strategy. At a high level, we will model our strategy

around increasing customer service, keeping pricing competitive, rewarding loyalty, and ensuring access.

• Pricing• Place

• Promotion• Product

Increase Customer

Service

Reward Loyalty

Keep Pricing Competitive

Ensure Access

17 Tactical Plans | 2010 and Beyond

TACTICAL PLANS

INCREASE CUSTOMER SERVICE

Great Canadian Gaming Corporation is a service business. Our service is our product. To improve our product

we will:

Expand multi-language customer service in key areas

Increase investment in employee training

Respond to customer feedback by bringing in more diverse live events such as boxing matches,

children’s entertainers, magicians, and celebrity speakers.

Introduce a program aimed at improving employee morale and job satisfaction

REWARD LOYALTY

We will re-launch the BC Gold loyalty program with a new name, a new brand, and many enhancements gleaned

from customer feedback. Highlights of the new “Canada Gold” program include:

Figure 10: Canada Gold9

KEEP PRICING COMPETITIVE

The 2010 Olympics will put Vancouver’s reputation on the line, and we expect some business will mire that

reputation by price-gouging and ambush marketing. Visitors and residents alike will be hypersensitive to pricing,

and we want to be cautious of price-gouging perceptions. To guard against this we must:

9 See Appendix 2

• Slot Machine Play

• Hotel Bookings

• Live Event Purchases

• Resturant Purchases

• Refering new members

Earn Points

• Advance Reservations

• Exclusive Invitations

• Bonus Contest Entries

• Special Discounts

Enjoy Privilages• Food, Beverages, Hotel

Stays, or Live Events

• Partner Merchandise

• Official Stock Certificates

• Cash

Redeem Rewards

2010 and Beyond | Tactical Plans 18

1. Adopt a company-wide policy that any price increase must be evaluated and approved by this Marketing

Committee.

2. Since the prices that consumers see for live events are set by third-party agencies, we must engage our

partners so that their pricing decisions are aligned with this strategy.

ENSURE ACCESS

During the 2010 Olympics, the marketing team will need a subsequent strategy for ensuring customers have

access to all venues and their discomfort is minimized while they wait. This tactic starts with providing “Canada

Gold Members” with advance booking access to hotel rooms, live events, and restaurant reservations. Two

other tactics to improve access would depend on the cooperation of BC Lottery Corp.; they are:

1. Outfitting each of our casino’s with a “members section”

2. Opening casino’s one hour earlier to anyone with a BC Driver’s license or comparable ID

Provided that we are able to increase access to loyal customers and BC residents, we still have a responsibility to

entertain and accommodate those who are waiting or in lines. Some ideas for accomplishing this include:

Complimentary bottled water and newspapers

“Vegas Style” roaming performers

Televisions in waiting areas tuned to Olympic coverage

CUSTOMER RETENTION PROGRAM

The tactics discussed above will be implemented as follows:

Table 3: Customer Retention Program Schedule

Task Timeframe Assigned To

Survey Customers for preferred language Q2 2007 Marketing Manager, Gaming

Determine positions/languages to be staffed Q3 2007 HR Manager

Review & improve employee service training Q2 2007 HR Manager

Create a morale/job satisfaction program Q3 2007 HR Manager

Survey Customers for alt. entertainment Q2 2007 Marketing Manager, Entertainment & Lodging

Seek out alt. live entertainment Q3 2007 Marketing Manager, Entertainment & Lodging

Confirm safe use of "Canada Gold" Q2 2007 Rush, Crane, Guenther, LLP

Design "Canada Gold" program & campaign Q3 2007 Epic Point Media

Install information systems for pts tracking Q4 2007 IT Manager

Launch "Canada Gold" promotion Q1 2008 Marketing Committee

Measure participation rate & redemption rate ongoing Marketing Committee

19 Tactical Plans | 2010 and Beyond

Implement Pricing Review Policy Q2 2007 Vice-President

Engage partners re: pricing perceptions Q2 2008 Marketing Manager, Entertainment & Lodging

Approach BCLC re: access issues Q4 2007 Compliance Officer

Recruit performers for 2010 Q1 2008 Marketing Manager, Entertainment & Lodging

Organize comfort items for waiting areas Q1 2008 Marketing Manager, Food & Beverage

CONTINGENCY PLAN

In the event that our marketing efforts fail to protect our market share, we will need to execute a contingency

plan. A slip in market share likely means that some of our customers have been lured to the recently renovated

competitor properties in New Westminster and Burnaby. We will engage our advertising agency to create a

campaign, codenamed “Rediscover Riverrock”, which targets these customers.

2010 and Beyond | Financial Projections 20

FINANCIAL PROJECTIONS

5 YEAR COST ANALYSIS

Great Canadian Gaming Corp. currently allocates approximately 4% of revenues to marketing (Great Canadian

Gaming Corp. MD&A, Dec 31, 2006). This committee has recommended pursuing a Customer Retention strategy

in addition to existing marketing plans. Table 4 outlines an estimation of additional marketing expenses

required to pursue this strategy.

Table 4: Estimated Fixed Costs of Customer Retention Strategy

Expenses ('000) 2007 2008 2009 2010 2011

Multi-lingual service costs $750 $600 $600 $600 $600

Added employee training $175 $175 $175 $50 $50

Employee job satisfaction program $90 $90 $90 $90 $90

“Canada Gold” program design $180 $0 $0 $0 $0

“Canada Gold” program promotion $70 $270 $270 $70 $70

2010 response team $0 $0 $0 $650 $0

Contingency Plan: “Re-discover Riverrock” $35

TOTAL: $1,300 $1,135 $1,135 $1,460 $810

We expect that the Canada Gold loyalty program will also add 1% variable cost to revenues from members as

they redeem rewards.

REVENUE FORECAST

This revenue forecast assumes continued growth between 6 and 8 percent in each of the next three years, a

12% increase in 2010, and a 5% decrease in 2011.

Table 5: Revenue Forecast10

Revenue Forecast ('000) 2007 2008 2009 2010 2011

Gaming $325,874 $351,944 $380,099 $396,444 $376,622

Food & Beverage $42,137 $42,980 $43,839 $52,859 $50,216

Entertainment & Lodging $26,061 $52,675 $65,982 $79,289 $75,324

TOTAL: $394,072 $425,597 $459,645 $528,592 $502,162

10 Estimations based on historical growth (Great Canadian Gaming Corp. MD&A, Dec 31, 2006) and industry forecasts (British Columbia

Lottery Corporation, 2006)

21 Financial Projections | 2010 and Beyond

BREAK-EVEN ANALYSIS

Table 6: Break Even Projection

2007 2008 2009 2010 2011

Forecasted Revenues $394,072 $425,597 $459,645 $528,592 $502,162

Costs

Operating Costs11 $279,791 $302,174 $326,348 $375,300 $356,535

Marketing & Promotion12 $15,763 $17,024 $18,386 $21,144 $20,086

Sub-total $98,518 $106,399 $114,911 $132,148 $125,541

Customer Retention Program

Participation Rate 9% 11% 13% 15% 15%

Variable Costs13 $355 $468 $598 $793 $753

Fixed Costs $1,300 $1,135 $1,135 $1,460 $810

Gross Margin (EBITDA) $96,863 $104,796 $113,179 $129,895 $123,977

Interest, Taxes, Depreciation, & Amortization14 $120,910 $117,283 $113,764 $110,351 $107,041

Net Income ($24,047) ($12,487) ($586) $19,544 $16,937

As discussed, Great Canadian Gaming Corp. is severely burdened by long-term debt. We must preserve our

market share and cash flow if we hope to reduce the debt. The break-even model above predicts that modest

growth in revenues combined with timely debt reduction will result in break-even earnings by 2010.

11

Estimated based on historical operating costs (Great Canadian Gaming Corp. MD&A, Dec 31, 2006) 12

Estimated based on historical marketing costs (Great Canadian Gaming Corp. MD&A, Dec 31, 2006) 13

Calculated based on participation rate and costs of 1% of revenue for reward redemption 14

Estimated based on historical debt reduction (Great Canadian Gaming Corp. MD&A, Dec 31, 2006)

2010 and Beyond | Change Control 22

CHANGE CONTROL

REVIEW SCHEDULE

Table 7: Review Schedule

For Review By Frequency Next Date

Strategy - Customer Retention Management Semi-Annually 1-Aug-07

Tactical Approach Marketing Committee Quarterly 1-Jun-07

Goal Performance Marketing Committee Monthly / Quarterly 1-Jun-07

DOCUMENT CHANGE CONTROL

Table 8: Document Change Worksheet

Date

Document Version

No. Change Description Name

Impact Assessment

Required (Y/N) 1-Apr-07 1.0 Initial Draft - submitted to management J.MacLaren N

GOALS CHANGE CONTROL

Table 9: Goal Change Worksheet

Version Key Debt Ratios Revenue Proportion Marketing Goals

Doc. No Date

Target Achieve

Current Ratio

Total Debt to Equity

Ratio Gaming Food &

Beverage Ent. &

Lodging

No. of Live

Events

Hotel Occ. Rate

Loyalty Program

Participation

GVRD Market Share

1.0 1-Apr-07 2008 ( - ) ( - ) 85% 8% 7% 468 80% 9% 53-55%

1.0 1-Apr-07 2009 ( - ) ( - ) 80% 9% 11% 624 90% 11% 53-55%

1.0 1-Apr-07 2010 ( - ) ( - ) 75% 10% 15% 780 90% + 13% 53-55%

1.0 1-Apr-07 2011 1.1 0.83 75% 10% 15% 936 90% + 15% 53-55%

2008

2009

2010

2011

23 Change Control | 2010 and Beyond

PERFORMANCE

TRACKING RESOURCES & RESPONSIBILITIES

Table 10: Tracking Resources & Responsibilities

Goal Resource Frequency Person Responsible

Current Ratio Audited Financial Statements Annually Marketing Committee

Total Debt to Equity Ratio Audited Financial Statements Annually Marketing Committee

Gaming Rev. Proportion MD&A Quarterly Marketing Committee

Food & Beverage Rev. Proportion MD&A Quarterly Marketing Committee

Ent. & Lodging Rev. Proportion MD&A Quarterly Marketing Committee

No. of Live Events GCGC Decision Support System Quarterly Marketing Manager, Ent. & Lodging

Hotel Occupancy Rate GCGC Decision Support System Monthly Marketing Manager, Ent. & Lodging

Loyalty Program Participation GCGC Decision Support System Monthly Marketing Manager, Food & Beverage

GVRD Market Share BCLC Gamin Win Statistics Monthly Marketing Manager, Gaming

TRACKING RESULTS

See Appendix 1: Performance Tracking Worksheets

CORRECTIVE ACTIONS REQUIRED

Table 11: Corrective Action Worksheet

Goal Issue Description Date Suggested Action Person Completed (Y/N)

2010 and Beyond | <Bibliography 24

BIBLIOGRAPHY

Azmier, J. J. (2005). Gambling in Canada 2005. Calgary: Canada West Foundation.

British Columbia Lottery Corporation. (2006). Retrieved March 2007, 16, from Service Plan 2006/07 - 2009/10:

http://www.bclc.com/documents/annualreports/serviceplan.pdf

Constantineau, B. (2007, March 10). The sound of casino-hotels' payoff. Vancouver Sun .

Farris, J., & Wynne, H. (2001). Canadian Problem Gambling Index: Final Report. Ottawa: Canadian Centre on

Substance Abuse.

Farris, J., & Wynne, H. (2001). Canadian Problem Gambling Index: User Manual. Ottawa: Canadian Centre on

Substance Abuse.

FPinfomart.ca. (n.d.). Great Canadian Gaming Corp. Profile. Retrieved March 19, 2007, from

http://www.fpinfomart.ca.proxy.lib.sfu.ca/fpsn/snap_display.php?key=fp|fpsn|11174

Great Canadian Gaming Corp. AIF. (2005, December 31). Annual Information Form. Retrieved February 9, 2007,

from www.sedar.com

Great Canadian Gaming Corp. MD&A. (Dec 31, 2006). Management's Discussion and Analysis - Dec 31, 2006.

Retrieved March 16, 2007, from www.sedar.com

Great Canadian Gaming Corp. MD&A. (Nov 9, 2006). Management's Discussion and Analysis - Nov 9, 2006.

Retrieved February 9, 2007, from www.sedar.com

Local Government Share of Provincial Casino and Community Gaming Centre (CGC) Revenue to December 31,

2006. (2006, December 31). Retrieved February 2, 2006, from Ministry of Public Safety & Solicitor General:

http://www.pssg.gov.bc.ca/gaming/financial_reports/local_gov_revenue.pdf

Marshall, K., & Wynne, H. (2004, Summer). Against the Odds: A profile of at-risk and problem gamblers.

Canadian Social Trends , pp. 25-31.

Ministry of Public Safety & Solicitor General. (2006). Retrieved February 2, 2007, from Gaming Policy &

Enforcement Branch: http://www.pssg.gov.bc.ca/gaming/regulation.htm

Saville, R. (2007, March 1). Letter to all Gaming Services Providers about Subliminal Messaging on Slot Machines.

Retrieved March 8, 2007, from Ministry of Public Safety & Solicitor General:

http://www.pssg.gov.bc.ca/gaming/legislation_policy_standards/letters/345647_Mar06-

07_letter_subliminal_slot_machines.pdf

25 <Bibliography | 2010 and Beyond

Stafford, J. (2003). Consumer demand for Enterainment Services. Ottawa: Statistics Canada.

Vancouver Olympic Comittee. (2006, April 3). Official Mark of the Bid Corporation as of April 3, 2006. Retrieved

February 11, 2007, from Vancouver 2010:

http://www.vancouver2010.com/resources/PDFs/Official%20Marks.pdf

VANOC Quick Facts. (n.d.). Retrieved February 2, 2007, from Vancouver 2010:

http://www.vancouver2010.com/en/WinterGames

Where the Money Goes. (2006). Retrieved March 20, 2007, from Ministry of Public Safety & Solicitor General:

http://www.pssg.gov.bc.ca/gaming/where_the_money_goes.htm#gross_rev

2010 and Beyond | Appendix 1: Performance Tracking Worksheets 26

APPENDIX 1: PERFORMANCE TRACKING WORKSHEETS

Table 12: Annual Performance Worksheet

2007 2008 2009 2010 2011

Goal Industry GCGC (+ /- ) Industry GCGC (+ /- ) Industry GCGC (+ /- ) Industry GCGC (+ /- ) Target Actual Variance

Current Ratio

1.1

Total Debt to Equity Ratio

0.83

Table 13: Quarterly Performance Worksheet

Year: ____________ Q1 Q2 Q3 Q4

Goal Target Actual Variance Target Actual Variance Target Actual Variance Target Actual Variance Gaming Rev. Proportion

Food & Beverage Rev. Proportion

Ent. & Lodging Rev. Proportion

No. of Live Events

Table 14: Monthly Performance Worksheet

Year: ____________ Hotel Occupancy Rate Loyalty Program Participation GVRD Market Share

Month Target Actual Variance Target Actual Variance Target Actual Variance

January

February

March

April

May

June

July

August

September

October

November

December

2010 and Beyond | Appendix 2: Loyalty Program Idea Board 27

APPENDIX 2: LOYALTY PROGRAM IDEA BOARD