Sonal Jayawickrama

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The Horse racing industry

Introduction
Horse racing is an equestrian sport, involving two or more jockeys riding horses
over a set distance for competition. It is one of the most ancient of all sports and its
basic premise - to identify which of two or more horses is the fastest over a set
course or distance - has remained unchanged since the earliest times. Horse races
vary widely in format. Often, countries have developed their own particular horse
racing traditions. Variations include restricting races to particular breeds, running
over obstacles, running over different distances, running on different track
surfaces and running in different gaits. While horses are sometimes raced purely for
sport, a major part of horse racing's interest and economic importance lies in
the gambling associated with it, an activity that in 2008 generated a world-wide
market worth around US$115 billion (http://en.wikipedia.org/wiki/Horse_racing).

Understanding the behavior of consumers in the Horse racing industry

Horse racing attracts the highest class of society from kings and queens to
millionaires. People visit horse races not just to look at the horses run, but also to
make bets on them. Millions of dollars are waged on horses that run these races. So
why do people gamble their hard earned money? Why do people gamble millions of
dollars on an animal that is running a race? There is absolutely no guarantee of a
return on investment, and yet at every race we see thousands of people jostling to
places wages on these horses.
In order to understand why consumers do what they do in the horse racing industry,
it is important to begin the analysis at the very beginning of a consumers journey
to consumption.
The Start
Horse racing is not like any other product that you may consume. For example,
consider mobile phone. There are a wide variety of mobile phones made by a
variety of manufacturers. Therefore consumers are able to make a decision by
analyzing the data that is already available, and then is able to choose a brand and
a model.
However this is not the case in the horse racing industry. There are no brands or
models that exist in the industry. You are either a race-goer or you are not. There is
no brand or model to choose from, you simply visit a stadium that has a race. Unlike
normal consumer products, there is no proper way to compare between available

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brands or models. The only information that would be available would be the
opinions and experiences that have been felt by current race goers. However, these
reviews and opinions would be of no use when it comes to making a decision, as
each individual experiences in a different way. This leads to the beginning of the
journey of a consumer in the horse racing industry. Every consumer of the horse
racing industry, first experiences a race before forming judgment about it.

Perception
Before a consumer is able to experience horse racing, he or she needs to e aware
that horse racing exists. This may occur through numerous ways during an
individuals life time. Although consumers need to have firsthand experience of a
horse race to form a judgment about it, by knowing about its existence, an
individual would have his/her own perception about horse racing. Perception occurs
through a three stage process in which people select, organize and interpret
sensations that they feel through their sensory receptors. The horse racing industry
has used sensory marketing over a large period of time to build a positive
perception of the sport

Sights Sights is a sensory stimulus that is received by our eyes. The horse
racing industry depends massively on sights to build the perception of the
industry in the consumers mind. Every horse race is different and every horse
race is special. There is a large amount of glitz and glamour attached to
every race. There is a large amount of decorations that adorn the stadiums in
which the races take place in. The jockeys that ride the horse wear extremely
futuristic attire. Horse racing has perhaps the most glamorous image of all
so-called animal 'sports' (especially when compared to the visually obvious
cruelty of rodeos). Such is the allure of horse racing that major race-meets
such as the Melbourne Cup are even 'celebrated' with public holidays.
Socialites spend thousands on designer outfits, the champagne flows, and
millions of dollars are gambled on the outcome of races
(http://www.animalsaustralia.org/issues/horse_racing.php). In addition to this,
even in the movies we see horse racing been portrayed as an event of great
stature and been shown in a very positive light. A good example is the movie,
My Fair Lady. As the statements above shows, there is a lot of visual cues
attached to horse racing; the glamorous outfits, the horses, the champagne,
and the high class society that attend these races. Therefore when an
individual sees these visual cues, he/she is inclined to believe that horse
racing is a very special event.
Sounds Sounds is a sensory stimulus that is received by our ears. The
earlier analysis explained the visual cues attached to the horse racing
industry. However, when an individual forms his/her perception regarding
something, sounds play a large part as well. In the horse racing industry one

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of the most striking sounds that you would hear is the loud galloping on
horses as they race down the track. However, apart from the sound of the
horses galloping, the sound that would permanently be inscribed in an
individuals head would the gun shot that signals the start of the race.
Traditionally, individuals link the sound of a gunshot to a threat, however in a
more comfortable environment a gunshot can be related to signaling the start
of a race.
There are three more types of stimulus involved; however they do not really
apply to the horse racing industry.

Once an individual has formed his/perception regarding the horse racing industry,
there needs to be a reason for him/her to begin the process of consumption. Thus,
this is where an individual needs a trigger. When it comes to the horse racing
industry, the most important individual would be the initiator. Individuals who
bring new persons to the track ("Initiators") are essential to creating long-term
consumers. Initiators serve as mentors to first-time visitors, explaining the rituals of
the sport and teaching them how to decipher a program and place a bet. While
some tracks have designed programs to simplify wagering, first-time visitors rely on
the Initiator and not track staff for advice and mentoring
(http://www.omafra.gov.on.ca/english/rural/about/transition/researchsummary.htm).
Once an initiator takes an individual to his her first race, it leads to the formation of
an attitude towards horse racing.
The ABC Model of attitudes
It is clear that when it comes to horse racing, people need to experience it before
they can make a judgment. Thus, consumers first form an attitude to horse racing
before they decide whether they consume it or not. The ABC model of attitudes
emphasizes the interrelationships amongst knowing, feeling and doing. It proposes
that the concept of a hierarchy of effects to decide which amongst knowing, feeling
and doing comes first. There are mainly three types of hierarchies; the standard
learning hierarchy, the low involvement hierarchy and the experiential hierarchy.
When analyzing the horse racing industry, it was clear that consumers need to first
experience a race before they can make judgment. They must first do, before
they can feel or know. Thus, through this argument it is clear that when it comes to
the horse racing industry, a consumer would fall under the low involvement
hierarchy, the hierarchy which is based on a behavioral learning process. Therefore
consumers of the horse racing industry first do, before they form a value
judgment on horse racing. This judgment is usually formed based on the
experiences the consumer goes through at his/her first race. This leads to the
attitude that the consumer forms towards race horsing. Therefore it is up to the
industry to ensure that a lasting positive attitude is formed in the mind of the
potential consumer.

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Psychologists define attitudes as a learned tendency to evaluate things in a certain

way. Attitudes form directly as a result of experience
(http://psychology.about.com/od/socialpsychology/a/attitudes.htm). Therefore, by
manipulating the experience, the attitude developed can be changed as well. Thus,
when it comes to the horse racing industry, the experience at the races can
influence the attitude consumers form regarding horse racing.
How is the consumers attitude influenced?
When it comes to horse racing, the easiest way in which a potential consumers
attitude is influenced is through the experience of the horse race. The experience
at the race needs to be sold in order to ensure that a positive attitude is shaped in
the head of the consumer.
One important aspect of horse racing that gives it an edge over its competition for
sports/entertainment dollars is its interactivity. By handicapping and wagering,
patrons at the track can not only experience the game firsthand, but become the
key component of the races themselves. No other sport makes its spectators part of
the game like horse racing.

Make horse racing more than just gambling. Losing money on a

first visit to the track negatively impacts one's experience. This
suggests that especially for adult first-time customers the horse
racing experience should be about much more than gambling.
Horses themselves are key actors in the process of creating
new customers. Proximity to the animals is an important aspect of
what makes horse racing unique. Tracks should design viewing areas to
be as close to the track as possible. When these areas are available,
patrons should be encouraged to utilize them.

Why do consumers become regulars at horse races?

Consumers do not become regulars at horse races to simply continue betting on a
horse even though they may be losing money. Under the law of rationality, a
consumer would not continue visiting a horse race if he/she is losing money simply
to continue making bets. That would not make that individual a rational human
being. Therefore, the main purpose of visiting these horse races are to achieve
some terminal values.
The Means End Chain model
The means end chain model proposes this very theory. It states that consumers
consume a particular product to attain some end that they value. As stated earlier,
a rational human being would not visit a horse race to simply lose money. Therefore

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consumers of the horse racing industry have some specific terminal values that
they link to the sport.
Escapism
The gambling environment can provide an escape from everyday life. The glitzy
environment at the horse race, the high class society, the champagne, for the time
that we are taking part we can be surrounded by different people, different sounds
and emotions, all of which stimulate and arouse our senses.
Glamour
The media and advertising agencies understand the psychology of gambling and
often portray a stylish and fashionable image of gambling. In film and TV, we see
characters an afternoon at the races. There is often a suggestion of 'high society'
and attending at 'a place to be seen'.
Social
Gambling is accepted as part of a country's culture and as such is widely
anticipated in (with varying frequency) by the majority of the population in
countries such as the United States of America, Australia and UK. Some young
people are introduced to the sport by their parents and grandparents and are taken
out for a day at the races.
The Common Misperception
Most people think about gambling as a low-risk, high earning potential activity. In
reality, it's the opposite: a high-risk, low earning potential activity. The odds always
favor the establishment. Despite that, the thought and excitement of hitting a
jackpot are often too alluring - regardless of its probability.
References
Horse racing. (2014, September 15). Wikipedia. Retrieved September 19, 2014,
from http://en.wikipedia.org/wiki/Horse_racing
Horse racingthe glitz, the glamour... the grim reality. // Animals Australia. (n.d.).
AnimalsAustralia.org. Retrieved September 20, 2014, from
http://www.animalsaustralia.org/issues/horse_racing.php
Research. (n.d.). The psychology of gambling. Retrieved September 19, 2014, from
http://www.cam.ac.uk/research/news/the-psychology-of-gambling

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Solomon, M. R. (2013). Consumer behavior: buying, having, and being (10th ed.).
Upper Saddle River, N.J.: Prentice Hall.
NTRA Marketing Horse Racing To A New Generation Of Fans. (n.d.). NTRA Marketing
Horse Racing To A New Generation Of Fans. Retrieved September 21, 2014, from
http://www.slideshare.net/safc/ntra-marketing-horse-racing-to-a-new-generation-offans-presentation