BuSiNeSS PlAN - California Lottery

is not true of companies with strong brand images. For example, whenApple introduces a new product, consumers expect it to be innovative,cutting edge, user-friendly, and consistent with their lifestyle. Applecan then focus on the benefits of the product itself because consumersalready know what to expect from the company. Similarly, when Lexusintroduces a new vehicle, it does not have to spend time convincingconsumers that customer service is a key selling point. Lexus is alreadyfamous for its exemplary customer service.In contrast, when the CSL introduces a new product, as we saw withthe Million Dollar Raffle, consumers don’t know where the money goes,don’t believe that 50% of sales is returned in prizes, and haven’t heardabout anyone winning the Lottery in a long time. Accordingly, CSL salesrepresentatives and retailers have difficulty selling new products, especiallyto new customers.The key to improving ourbrand image is to establisha cohesive, comprehensive,and understandable messageabout what the CSL representsand what to expect fromlottery products.The key to improving our brand image is to establish a cohesive,comprehensive, and understandable message about what the CSLrepresents and what to expect from lottery products. The messagemust be given credibility through the products and services we offer.And, finally, the message must be conveyed effectively through the mostappropriate communications channels.Some strengths of the CSL include the brand equity of SuperLOTTOPlus, the retailer network, the Big Spin Show, and the traffic of its publicwebsite. These existing communications channels are readily availableto optimize our brand image improvement initiatives.5.3 Shift the Jackpot ParadigmReliance on large jackpots as the basis for draw game growth is a doubleedgedsword. On the one hand, large jackpots can generate tremendoussales in a very short period of time. On the other hand, jackpot-drivengames are subject to sales fluctuations caused by the luck of the drawand to sales declines caused by jackpot fatigue. These fluctuations areparticularly risky for California where draw game sales are needed tofund higher Scratchers prize payouts.In the United States, the draw game industry has been focused, almostwithout exception, on creating larger and larger jackpots. In California, wewent from Lotto 6/49 to Lotto 6/53 to SuperLOTTO to SuperLOTTO Plusand MEGA Millions to increase jackpot sizes and attract occasional players.Other state lotteries are already discussing ways to change game matrixes,increase annuity periods, create national lottery games, and even joininternational consortiums all in an effort to create larger and larger jackpots.– 72 –California Lottery 2007–2010 Business Plan