Fiscal Year Business Plan
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1 Fiscal Year Business Plan Presentation to California State Lottery Commission May 28, 2015 Action Item 9h
2 Three-Year Strategic Direction Provides the foundation for developing the FY Business Plan Long-term goal of becoming one of the largest and most profitable U.S. lotteries Do this by: Maintaining highest integrity. Growing sales in a responsible manner Having a well-prepared and united team around the strategic goals
3 Development of the Plan Inputs into this Process: Internal analysis and review of our business Strategic planning through each Lottery division Senior management review and endorsement Four Themes from Strategic Plan to focus activities Six Objectives established to finish final year of Strategic Plan and drive Bottom-line Profits
4 Products Objectives for FY Increase the Lottery s profits by improving Draw Game sales. Players Reduce perceived barriers to buying Lottery tickets through efforts aimed at both players and non-players. Commemorate the Lottery s 30 th Anniversary by thanking players, retailers, employees, stakeholders and Californians in general. Increase efficiency and customization of marketing efforts directed at existing players and re-allocate funding to attract new players. Retailers Strengthen the relationship with Lottery retailers and provide support through more customized approaches in selling, training, communications and incentives. Infrastructure Make improvements in the Lottery s infrastructure in increase efficiencies, effectiveness and further grow profits.
5 Increase the Lottery s profits by improving Draw Game sales
6 Draw Games Initiatives to Boost Profits in FY Jackpot Games MUSL voted on change to Powerball Add l exposure for Mega Millions and Powerball at retail Year-round marketing support of SuperLotto Plus Play at the Pump rollout pending pilot test results Other Draw game enhancements Daily Games Fantasy 5 Hot Spot
7 Sales Decline due to Drop in Spending per Player not Fewer Players
8 SuperLotto Plus Has Many Positive Characteristics Despite decline in sales, SLP has: Sizeable playerbase More players than many other games: Scratchers, Powerball, Daily Games Positive attitudes towards that brand
9 Planned Support for SLP in FY Business Plan Paid Advertising Promotional support In-store signage On-line marketing to a community of SLP enthusiasts
10 Scratchers Product Plan Launch 47 games during FY Launch a $30 Game in Fall Introduce more $20 games per year than present Special Games Summer: $20 Deluxe 7 s Playbook Holiday Gift Giving games and ad campaign Early 2016: Popular for Life Series re-introduced More $1 Game Launches than in FY
11 Growth Driven by Higher Price Points
12 Reduce Perceived Barriers to Buying Lottery tickets
13 Reducing Barriers to Play Scratchers game selection Key barrier among non-players Game selection pilot test with digital displays Ambassadors at Events to provide instructions on playing Lottery games Lottery Top of mind awareness via advertising
14 Commemorate the Lottery s 30th Anniversary
15 October 3, 2015 Lottery s 30 th Anniversary A Thank You to Californians for their support And, expand knowledge of the Lottery s Mission Many are not aware how Lottery provides supplemental funding to schools Utilize 30 th anniversary as vehicle to communicate to players, retailers, stakeholders and staff members. Campaign planned for September time period
16 Increase Efficiency and Customization of Marketing Efforts
17 Efficiently Communicate to Existing Players Market directly to current players via customized messages Expanding our player database Some technological improvements needed Can then divert some advertising funds to player acquisition efforts Examples of some programs under this objective Develop a Player Rewards program Create capabilities to deliver an e-coupon
18 Strengthen the Relationship with Lottery Retailers
19 Retailer Initiatives Provide customized services that will create enthusiastic retailers Training Communication Product Offerings - Variable Pack Size Financial Terms - Scratchers Credit Limit / Settlement Research retailer needs and preferences to personalize our service and support Update retailer data across platforms seamlessly
20 Make improvements in the Lottery s infrastructure
21 Infrastructure Improvements Facilities Master Plan Santa Fe Springs, Southern DC Relocations Preparations for other District Offices Digital communications infrastructure improvements Build efficiencies through automation Human Resource areas Information archive improvements
22 Financial Goals Fiscal Year
23 FY 2015/16 Financial Goals Goal of $6 billion in Total Sales 10% increase over projected FY sales Growth in Scratchers: $485 million (+13%) Summer Program: $20 Playbook w/adv. $30 Scratchers Game Retail Merchandising Growth in Powerball: >$30 million (+8%) Growth in Hot Spot, Daily Games and SLP
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