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I N T E R N A T I O N A L

May 2004

New York Lottery Director Nancy Palumbo
A Record Setting Year, and the Potential of VLTs
These classic board games will have your players playing even more.
MONOPOLY, A proven success,MONOPOLYreigns as the king of all gamerthemed lottery tickets.
Act now to leverage exposure of Q4 nationwide fast food promo!
BATTLESHIP, This coordinate play style reveals an exciting new look, allowing for more colorful game value. Lottery players statewide will shout 'You sank my battleship!. CLUE, Millions intrigued for over 50 years. Your players will spend more time with the added-value of mystery only an official CLUE game can provide. SCRABBLE, The quintessential crossword game, SCRABBLE can turn your next crossword instant ticket into a parlor game classic. Add a new level of play to your numbers game with terminal generated SCRABBLE. YAHTZEE, Mother of all dice games is a natural for the gaming category. Add YAHTZEE equity to either your instant game or your terminal generated numbers games. TWISTER, Lottery players will be putting all limbs on this ticket and twisting to buy more. MDIs designs will add a new layer of color to this already colorful theme. PAYDAY, PAYDAY has built-in lottery elements including lottery game cards and a rolling jackpot drawing held when players land on a Lottery space. THE GAME OF LIFE, A truly classic board game that has entertained generations of players who tried to end up with the most money to win, can now result in real money.
A Scientific Games Company
The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the board and playing pieces are trademarks of Hasbro for its property trading game and game equipment. SCRABBLE is a trademark of Hasbro in the US and Canada and is used with permission. BATTLESHIP, CLUE, PAYDAY, TWISTER, YAHTZEE and THE GAME OF LIFE are trademarks of Hasbro and are used with permission. 2004 Hasbro. All Rights Reserved.
ON THE COVER: New York Lottery Director Nancy Palumbo Departments Features

INDUSTRY NEWS..2

Profile: The South Dakota Video Lottery Program Big Numbers for New York
The New York Lottery Comes Out of a Record Setting Fiscal Year 2003-2004 Brimming with Potential for 2005.

AROUND THE WORLD..4

ON THE INTERNET.23

The Pull-Tab Picture

Read about whats going on with this long-time lottery product.

VIDEO NEWS..24

Bingo! The Timeless Success Story Unplugged Wireless Lottery Applications
Lotteries all over the world are taking the next step required to bring their game into the mobile age.

LOTTERY NEWS..25

LOTTERY PEOPLE..26
A Comprehensive Look at Lotteries on the Internet part II
Continuation of Public Gaming International Magazines April feature exploring how lotteries are utilizing the Internet.

ROUNDUP..26

Public Gaming International is now also available on the web.

www.publicgaming.org

PUBLIC GAMING INTERNATIONAL
PUBLISHER CEO/CHAIRMAN EXECUTIVE VICE PRESIDENT CIRCULATION

Duane V. Burke

EDITOR

DIRECTOR OF OPERATIONS

Doris J. Burke

FORMER DIRECTOR

ADVERTISING SALES
VICE PRESIDENT OF MARKETING VICE PRESIDENT OF SALES

Todd Koeppen

ART DIRECTOR

Susan Jason

Ralph Batch
Tel: (425) 765-4119 1-800-493-0527 Fax: (425) 378-2748 1-800-657-9340
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L. Robinson

Public Gaming International (ISSN-1042-1912) May 2004, Volume 30, No. 5. Published monthly by the Public Gaming Research Institute, Inc., 218 Main Street, #203, Kirkland, WA 98033. (425) 765-4119. ANNUAL SUBSCRIPTION RATES: United States: $145. Canada & Mexico: $160(U.S.). All other countries: $225(U.S.). POSTMASTER: Send address changes to Public Gaming International, 218 Main Street, #203, Kirkland, WA 98033. SUBSCRIPTION REQUESTS: Sent to same address. NOTE: Public Gaming International is distributed by airmail and other expedited delivery to readers around the world. 2004 All rights reserved. Public Gaming Research Institute.
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Industry News

Pink Panther Excercising its Global Reach
Almost at the precise moment he turns 40, Pink Panther began turning up on millions of instant scratch game tickets at thousands of lottery retail locations in Australia, Poland and Ireland. MDI Entertainment, a wholly-owned subsidiary of Scientific Games (NASDAQ: SGMS), announced that the New South Wales Lotteries, in Australia, and Totalizator Sportowy, in Poland, each introduced an instant scratch game featuring images of the world-famous animated character in mid-April. Irelands AnPost National Lottery will begin selling a licensed Pink Panther instant game at the end of May. These latest launches follow closely De Lottos February rollout of a Pink Panther instant game, which sold out quickly. The De Lotto launch marked the cartoon icons lottery debut outside the United States.
New Jersey Debuts Winning Legends
MDI Entertainment, a wholly-owned subsidiary of Scientific Games announced that the New Jersey Lotterys March 2004 launch of Winning Legends marks the debut of lottery tickets licensed by the Major League Baseball Players Alumni Association. The nine players featured in the new $2 game most of whom are members of Major League Baseballs Hall of Fame include former Yankees Reggie Jackson, Yogi Berra and Whitey Ford; former Phillies Mike Schmidt, Steve Carlton and Robin Roberts; and former Mets Tom Seaver, Gary Carter and Rusty Staub. Each player left an indelible mark on the game and, for millions of baseball fans everywhere, evoke fond memories. The Winning Legends game represents the first time MDI Entertainment has produced customized merchandise for a licensed game. A Scientific Games artist illustrated the likenesses of the nine players on three different caricature portraits. Over 300 framed prints of each of the portraits, all individually signed by the players, will be awarded in ten second chance drawings. The game also features more than $7 million in cash prizes and a top instant win cash prize of $30,000, and gives players ten second chance Grand Prize opportunities to win trips for two to baseballs All-Star Game. To qualify for the drawings, players submit three non-winning Winning Legends tickets through the mail or via the Lotterys Internet-based second chance drawing service. When they enter, players designate which of the three prints they want Yankees, Mets or Phillies should their names be drawn. In each drawing, the first 33 valid entries per team will win the prints pre-selected by the lottery players.

Brazil

With the aim of improving the efficiency of its business process, Oberthur Jogos e Tecnologias Ltda has decided to relocate its head office from Rio de Janeiro to Curitiba, where the company already operates its printing facility. This move will strengthen the interaction between its sales and marketing staff and its production personnel, in order to continue providing its clients with the highest quality products and services. As of April 1, the companys head office address will be as follows: Rua Pasteur 463 - conj. 1003 Batel; Curitiba - PR 80 250-080; BRASIL. Phone: +3024-1174 Fax: +3013-4221

Taiwan

Taiwans Cabinet decided to initiate a sports lottery in response to President Chen Shui-bians request for one. It was decided that a sports lottery would not cut into the profits of the national charity lotteries. The National Council for Physical Fitness and Sports is scheduled to hold a public hearing within a month to solicit opinions from sports groups, academics and social groups.
The UK Government is considering raising the minimum age for buying pools and Lotto tickets from 16 to18. The minimum age for all other forms of gambling is 18. UK players can now play Lotto from the comfort of their sofa at the touch of their Sky digital TV remote. Registration is quick and easy: players supply their name, date of birth and home address and choose a user name and password. Once their National Lottery account is set up players can pick their own lucky numbers or select a Lucky Dip for any Lotto draw up to eight weeks in advance. Players will be automatically informed if they have won a prize and the service will credit their National Lottery account with any winnings or advise them to collect their prize at a regional prize payout centre, depending on the size of their Lotto win.

Nigeria

TattsNet a joint venture company of Tattersalls and EssNets has signed its first supply, implementation and operational support contract in Nigeria with National Sports Lottery (NSL). The contract requires TattsNet to provide an ELOS Online lottery system including implementation and operational support for lotteries and sports pool games in Nigeria for the next 10 years. The on-line lottery will launch later this year with around 1,000 outlets in three principal cities. As Africas second richest country, Nigeria has a population estimated at 130 million, and under its exclusive national license NSL aims to offer on-line lottery products to all major cities within two years.

Codere, a private Spanish gaming company, is looking to raise $250 million from U.S. investors to back its Latin American bingo parlors, off-track betting sites, and gaming machines. The Company will try raising $150 million by selling 30 percent of Codere America, its Latin American holding company, and is hoping to sell $100 million in debt as well.

Virgin Islands

The Virgin Islands Lottery will restructure its traditional lottery game in an attempt to stop an ongoing sales decline. The lottery will now be drawn once a month, rather than twice, in order to allow more time for the tickets to sell. The Lottery prints 32,000 tickets for each traditional lottery draw, and is selling approximately half those tickets.

Sweden

Trisslotten, Swedens biggest gambling product, is entering the mobile age. Starting with Trisslotten, Svenska Spel and Boss Media will now be offering mobile gambling to the Swedish market. Bettors will be able to use the same account
4 Public Gaming International May 2004

Zimbabwe

Zimbabwes Lotto Board has voted to stop jackpot rollover after twelve weeks. On the thirteenth draw, jackpot money will be distributed evenly among players who correctly pick five of six winning numbers.

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The South Dakota Video Lottery Program
On October 16, 1989, the South Dakota Lottery pioneered the The significant level of private sector involvement has allowed a first state video lottery in the nation. Since its launch, video lot- high degree of efficiency in state operation of video lottery. Three tery has continued to be a successful Lottery employees: a testing specialist, product and has provided more than a compliance manager and an $990 million in revenue to the State accountant, work solely on video lotof South Dakota. tery operations. A computer systems South Dakotas video lottery proadministrator and three computer gram had its beginnings only one year operators deal primarily with video lotfollowing the start of the Lottery, even tery operations, but are also involved in preceding lotto games in the state by other lottery product administration. a year. Initial legislation to authorize Other staff, such as the Lotterys licensvideo lottery failed by one vote in ing employees, and security director are 1988, but was reintroduced and also involved in other Lottery activities passed in 1989. in addition to video lottery. In the first year of operation, 700 The state receives its video lottery establishments were licensed and gen- Ron Leidholt (L), systems administrator, and Mathew Sommerfeld revenue as a percent share of net erated revenues that surpassed projec- (R), testing specialist, ensure all terminal models meet exacting machine income, which is defined as standards before introduction in the market. tions by nearly $2.5 million. The numcash in less cash prizes paid out. The ber of establishments and terminals states share of net machine income grew quickly, leveling off by 1994, but with steady growth to near began at 22.5 percent in 1989, increasing five times until it the current levels of approximately 8,300 terminals in 1,400 estab- reached its present level of 50 percent in 1995. lishments across the state. The state currently splits net machine income with 50 percent South Dakotas video lottery terminals offer variations of poker, of net machine income going to licensed operators (who in turn blackjack, keno, and bingo games, with both quarter and nickel split their share with establishments), 49.5 percent deposited in games available. The maximum bet is $2 and the top prize is the states property tax reduction fund, and 0.5 percent used by $1,000. Winnings from video lottery play are not dispensed right the lottery for administration costs. from the terminal, but rather a voucher for the winnings is printRevenue from video lottery was initially deposited in the states ed by the terminal, which the player is required to claim at the general fund and by 1992 had become the second largest source establishment that same day. Terminals pay out credits won as of revenue to the general fund, surpassed only by the sales and use a percentage of credits played between 88 and 92 percent. tax. Starting in 1995, a portion of video lottery revenue was also The South Dakota video lottery model is unique in the degree of deposited in the states property tax reduction fund, used to private sector involvement, with the Lottery serving solely as a reg- reduce local property tax levies. ulator of the games. Four levels of licensees are authorized by the All video lottery revenue has been deposited in the property tax Lottery. Operators (currently 168) own the terminals and provide reduction fund since 1997, and provides for a 30 percent annual maintenance by technicians certified by the Lottery. Establishments reduction in local property taxes. (currently 1,424), which must have an on-sale alcohol beverage In state fiscal year 2003, video lottery net machine income license, are the businesses where the terminals are located. reached more than $212 million, generating more than $105 milManufacturers (currently 3) produce the terminals after the hard- lion in revenue to the state. ware and software have been tested and approved by the Lottery The success of the video lottery program in South Dakota has and an independent gaming laboratory. Distributors (currently 4) not been without its challenges, surviving three statewide ballot provide the terminals and parts to the operators. initiatives and a lawsuit that resulted in a ruling by the state The use of a central computer system is dictated by South Supreme Court that the game was unconstitutional and an order Dakota law and is critical in asserting the Lotterys centralized to shut down the game. control of a lottery product that has such high private sector parHowever, the South Dakota video lottery system is well designed ticipation. The highly sophisticated central system monitors every to maximize revenues to the state, with numerous safeguards and function of every terminal, and polls every terminal every day to on-going regulation and monitoring to ensure security, integrity, ensure up to date accountability of the game. While the central and accountability. The success of video lottery has grown steadisystem began with internal support, the system has been main- ly for 15 years and has proved mutually profitable for the state tained by International Gaming Technology since 2003. and its private business partners.

May 2004 Public Gaming International
Promotions Promotions have also played a big part in the success of New York Lottery games. The Lottery conducted more than 1,000 promotions last year, implementing a plan that aggressively promotes all products. In addition to approximately 400 radio promotions, the Lottery conducted more than 900 retailer promotions. Those are what our retailers love, and we respect that, said Palumbo. Ive been meeting with retailers. Ive been here a little less than three months and Ive done three regions, and Ill have the other regions done in the next couple of weeks because I think its critical to hear what theyre saying. They are a very good benchmark for us and a very good indicator of whats working and whats not. Video Gaming Entertainment Facilities As big as FY 04 was for the New York Lottery, the advent of video gaming means that FY 05 only promises to be bigger. Shortly after the events of September 11, 2001, the State of New York began to look to the Lottery to dramatically increase its revenues in order to help close a hole in the budget that had been ripped open by a senseless act of terrorism. Video gaming was seen as a solution that held a tremendous amount of potential, and eventually legislation was drafted allowing the Lottery to implement a video gaming program. The program became a reality in January, 2004, as Saratoga Raceway opened the first of eight scheduled Video Gaming Entertainment Facilities (VGEFs). Saratoga, which opened with 1,324 machines, was soon followed by the opening of Finger Lakes Gaming and Racetrack a much more rural facility housing 1,010 machines. The third facility, the Fairgrounds Raceway near Buffalo, which opened on St. Patricks Day, has approximately 990 machines. Weve had incredible success with those facilities, stated Palumbo. One of the things that has made them so successful is that weve been incredibly responsive in making changes that we knew would improve the system. The results are very favorable. While the three facilities are relatively small compared to other VGEFs planned in New York, theyve already raised close to $22 million in revenue for education (as of close of business April 28, 2004). As impressive as these revenue figures are, its important to note that most of these facilities have just started their marketing. The majority of the marketing will be very visible this summer to compliment what the facilities believe will be the time theyll really be able to draw customers. More Potential for Video Of course, the most exciting aspect about the New York Video Gaming Entertainment program is that there may be several more VGEFs opening in the near future. Three have opened and there are five more on the horizon, said Palumbo. Its incredibly exciting. We have a couple more in upstate New York one in Vernon Downs and one in Batavia both of those will be relatively small. Then we have our bigger facilities downstate. We have Monticello in the Catskills, which will feature 1,746 machines. That facility our largest to date - will open at the end of June. Thats really exciting because the Catskills have been eager to get started for a very long time. Weve seen their marketing plan and its very aggressive. They truly believe that it will be a destination facility.

Originally named Beano, the game took off after a player erroneously jumped up after winning and shouted Bingo! For some reason the nickname stuck. Beano ceased to be and Bingo has stormed through history as quite possibly the most popular and widely accepted game-of-chance of all time. So, how are lotteries using this popular game to their advantage? Public Gaming International recently asked North American Lotteries that very question. et reaches $1 million in sales in approximately 4-5 weeks. Its the same for $2 Bingo games. Bingo is a recognized play style thats easy to teach, understand and have fun with. Although known as extended play in the lottery industry, Bingo is fast moving and enjoyable.
Bingo holds a steady presence among the Kansas Lottery scratch offerings. The game sells roughly one-third as much as Crossword, but is always on the market and is sometimes second in sales for the year among all scratch games because of its ubiquitous presence. The game remains popular in Kansas due to its familiarity, ease of understanding, extended play feature, and, as a board game, sociality.

Arizona

Arizona has offered a Bingo instant ticket continuously since November 1995, and other than color pulsing, has remained virtually unchanged since April 1998. The game is a solid fixture in the Lotterys $2 price mix and currently represents more than 15% of total instant product sales. Since introduction, the game has sold more than $208 million. Bingo consistently outperforms other $2 games, only the Lotterys Crossword game performs better. Sales have continued to grow each of the last 5 years and are on target this fiscal year to sell in excess of $25 million. The Arizona Lottery introduced a $2 bingo online game in June 1997. The game was in market for 9 months before being removed for low performance. It was eventually replaced with a 3-digit numbers game. Bingo remains popular because of the simplistic play style. There is no need to educate players how to play a new game, everyone knows how to play Bingo. The game appeals to both male and female players and crosses all age groups.

Louisiana

The Louisiana Lottery offers a scratch-off ticket with a Bingo theme as an extended-play game. Due to a loyal Bingo player base, there is always a Bingo game available at any given time in the Lotterys scratch-off line-up. The games performance is roughly the same as the average scratch ticket. The Lottery has found that, in general, the extended play style offers more play value, which has helped the game to maintain its performance level for an extended period of time. In addition, there is instant familiarity with the Bingo game because it has been around so long. This means the player has a comfort level about how to play the game which makes it more enjoyable.

California

Last year, legislation was passed in California allowing the Lottery to finally be able to offer games containing a Bingo theme. The first Bingo game offered by the Lottery was a tremendous success, becoming the highest seller by far across all price points. Currently, the Lottery has two Bingo games on sale. The Lottery attributes the universal success of Bingo to the fact that it is simple, its entertaining, and it transcends racial, cultural and age boundaries. In some ways, it is popular *because* it has been played for hundreds of years.

Maryland

What kind of a presence (if any) does Bingo maintain within your lotteries product offerings? The Maryland Lottery always has a $2 BINGO ticket on the street, and another one waiting in the wings in the warehouse. It is an essential ticket in the Lotterys product mix. Bingo produces consistent, week-afterweek, month-after-month, year-after-year sales that the Lottery can always count on. The Maryland Lottery attributes the success of the game to its nearly universal recognition, easy to learn and easy to play style, and a lot of play action for the cost.

Connecticut

What kind of a presence (if any) does Bingo maintain within your lotteries product offerings? The Connecticut Lottery keeps two Bingo-style tickets in its scratch product mix at all times. Using Velocity Reports, the Lottery has noticed that an average $2 scratch game has a 25-week life cycle. $2 Bingo games average approximately the same. Also, a typical $2 scratch tick-
The Michigan Lottery always has at least one $2 Bingo onsale at all times. More often than not the Lottery is offering two games at this price point. The Lottery always has one $5 Bingo game available as well. The $2 Bingo represents approximately 10 percent of Michigans total $2 weekly game sales, and 19% of the
Lotterys weekly $5 sales can be attributed to the $5 Bingo game. It goes without saying that Bingo is an incredibly important part of the Michigan Lotterys product mix. The Lotterys $2 Bingo games consistently sell $400-$500,000 each per week. An average $2 game will start declining fairly quickly after 8-10 weeks. $5 Bingo produces consistent weekly sales of about $450,000. With this play style the Lottery has been able to count on consistent sales week after week. Other games at the same price points decline steadily after launch and players are less interested in playing them if launched more than once. Bingo players are very loyal to this play style. This is further demonstrated by the popularity of Cashword, which accounts for 25% of the Lotterys total weekly $2 game sales. Combined, Bingo and Cashword amount to 35% of total weekly $2 sales. The Lottery recently launched a $5 version of Cashword, and this strategy mirrors how it expanded the $2 Bingo to the $5 price point.

Bingo is considered a core game in Texas and the TLC continually has it available for sale. The Lottery has offered Bingo at $2 and $5 price points. Bingo serves the needs of those niche game players who enjoy extended play style games. It performs better than some games and not as well as some games at the same price point. However, Bingo constantly provides average weekly sales of approximately $1 million. Bingo continues to be a popular game because of the many different number and letter combinations and the multiple Bingo play areas that increases the possibilities to win. Bingo can have different winning patterns within the same game, which offers a lot of possibilities for variety. It is also a game that appeals to all age groups and ethnicities because of the familiarity with the game.

Virginia

1. What kind of a presence (if any) does Bingo maintain within
CORRECTION: The South Carolina Lottery sales information sent on the High Price Point Survey, published in the March issue of Public Gaming International, was partially incorrect. The sales for Cash Bonanza, $10 instant ticket, exceeded $2.95 million per week. Cash Bonanza launched 11/01/03, so it was only selling for 8 weeks in 2003. Gross sales for this 8 week period ending December 31, 2003 were $27,245,950. A $5 ticket, Cash Explosion, was actually the highest in gross sales. The gross sales for Cash Explosion for 2003 were $45,387,270.

WIRELESS

Unplugged Wireless Lottery Applications T
he idea of selling on the Internet holds a lot of potential, but it has yet to produce the kind of numbers expected. While Lotteries should still be looking for ways to utilize Internet sales techniques, the Internet is quickly becoming yesterdays news. Mobile Gaming, or m-Gaming, is the Lottery industry buzzword of the new millennium. m-Gaming faces many of the same hurdles that e-Gaming faces (legislation/regulatory concerns, security issues, underage play, and problem gambling), encompasses nearly all the strengths of the Internet (ease of play, relative anonymity, ability to buy at leisure without having to travel to a retailer), but has one major advantage over the Internet: these terminals are in your customers pockets, at their disposal, nearly the entire day. m-Gaming has another strength that sets it apart from Internet gambling infrastructure. In some developing nations, wireless phones are the only way to go. Many areas simply do not have land lines. But wireless can be anywhere and it is thriving. SMS based game downloads generated $1.5 billion in sales during 2003, with Europe accounting for 68 percent of those sales. Those figures are expected to reach $9.7 billion in revenues by 2008, with rich-media games requiring more advanced mobile devices garnering

West Virginia

The West Virginia Lottery was one of the first of the U.S. lotteries to host a web site for the public. Completely done in-house, the web site has been praised by players and retailers as being user friendly and providing a variety of helpful information. Pertinent information is available to the public, including how to play specific games, how to win and claim prizes, proceeds allocations and game descriptions. Players can download a variety of forms and can access a range of winning numbers, as well as specific ones. In addition, an index feature includes options for making written or verbal inquiries, results of past second chance drawings, descriptions of upcoming drawings, monthly copies of newspaper advertisements listing claimed prizes over $500, commonly asked questions and answers, the history of the Lottery, the names and addresses of Lottery Commission members, and news releases, both by title and by text. Those interested in West Virginias Limited Video Lottery Act can read the bill in its entirety, as well as details of how to become a licensed retailer and what retail locations have been licensed to offer the LVL games. A multitude of downloadable forms are included for this Lottery product, as well. There are also direct links to the Lotterys four licensed racetracks, MUSL, NASPL, its vendors, directions to Lottery headquarters, other lotteries web sites and the State of West Virginias home page. A link to information on the Problem Gamblers Network Hotline is included which contains a quiz on determining addiction and information concerning help and treatment access. It should also be noted that West Virginia has specific web sites exclusively designed for and accessed by lottery retailers, legal entities, financial firms and video lottery manufacturers. Under a new contract with the Lotterys advertising agency, the web site is slated to be re-vamped to include more enhanced areas of access for players, retailers, and the news media. The proposed features will include animated game demonstrations, streaming video of advertising and drawings, advanced and user-friendly winning numbers search engines, and a multitude of entertaining attributes. Of significance, are plans to host a players club and conduct research online.
The Virginia Lottery offers players two ways to enter statewide promotions. They can send entries through snail mail for the cost of a first-class stamp. No stamp? No problem! Players also can enter by using the Lotterys website: www.valottery.com. In May, players will find out the winners of two promotions: 1) the Lotterys 15th Anniversary Prize Bonanza with a chance to win up to $15,000, and 2) the Keep On Truckin second-chance sweepstakes with a chance to win one of two Ford F-150 FX4 trucks or a truckload of Ford prize packs. Players like the webability of the Lotterys promotions: website entries have outnumbered mail entries by a two-to-one margin, making these sweepstakes the Lotterys most popular second-chance drawings ever. Making promotions accessible via the Internet gives more players a second chance to win prizes in Virginia Lottery promotions and sweepstakes. Earlier this year, the Virginia Lottery launched a retailer section on its website (www.valottery.com). Retailers may view, download, and print materials specific to their needs. Retailers also have 24hour access to information concerning consignment sales, ticket dispensers, and the license application process. A current Retailer Manual and an online terminal reference guide are also available on the website. In addition to making things easier for retailers, this addition to the website will reduce the Lotterys administrative costs and will increase communication between retailers and the Virginia Lottery. Future plans call for retailers to be able to establish a

Iowa Gambling Expansion Bill Heads to Governor
The Iowa Senate voted 37-11 in favor of getting rid of limits on the number of licenses that can be approved, allowing the Iowa Racing and Gaming Commission to expand casino gam-
Public Gaming International May 2004

Lottery News

North Dakota Launches Lottery Sales
The North Dakota Lottery launched in a very unique way on Thursday, March 25. The Lottery didnt launch with Instants, but rather with Powerball the type of game which is generally added to the Lottery product mix much later in the process. Attorney General Wayne Stenehjem kicked-off the festivities by selling the first ticket to Rep. Andy Maragos, who led the initiative campaign to allow Powerball sales in the state. Just after 6pm, the sales total had reached $119,453. This equates to 18.77 cents being spent per person in North Dakota, which is believed to be a single-day Powerball record. months of FY 04. Total lottery sales between July 1 and March 31 were $367.3 million, compared with $328 million during the same period last year. Betting on computerized online games increased 16 percent to $163.7 million, and bets on scratch-off games 10 percent to $201 million. The remaining $2.6 million in sales came from pull-tab games. Powerball sales were up 19 percent to $84.5 million during the nine-month period, due largely to large jackpots. Megabucks sales increased 11 percent to $15.2 million.
Connecticut House Votes to Pay Late Claim
The Connecticut House voted to give nearly $6 million to Clarence Jackson, the man who turned in his winning ticket for a 1995 jackpot one day after the deadline. However, the issue has been sent back to the Appropriations Committee because there is no money in this years budget to pay Jackson the money.
Powerball Launches in Tennessee
Powerball launched in Tennessee in April. Sales were reportedly brisk in most areas, with a reported $654,000 being sold on the first day, and an extra $536,000 as of 5pm on the second day.
Powerball Game Show to End
The Multi-state Lottery Association voted to end the Powerball Instant Millionaire game show after four television seasons. The show will end Sept. 25, 2004.
Maine Plans to Join Powerball
A version of the Maine state budget authorizes the Maine Lottery to join MUSLs Powerball game. Its been estimated that the game could generate $9 million next year as part of a larger plan to increase state aid to local schools by $15 million. If all goes as planned, Maine residents could be buying Powerball tickets as early as July.

Fifteen years after its launch, the Kentucky Lottery Corporation has provided a tangible benefit to the Commonwealth in excess of two billion dollars. Proceeds have gone to a variety of causes since Lottery tickets were first sold in Kentucky. They include: $1,362,400,000 to the states General Fund. A majority of revenue in the General Fund is spent on primary and secondary education
After completing just over four months of sales, the Michigan Lottery climbed to the second highest in the nation for weekly Club Keno sales per retail location! The Lottery currently has over 1,100 retailers selling Club Keno tickets statewide. By the end of the year, the Lottery expects to have approximately 2,000 retailers offering the Club Keno game in their establishments.

Lottery People

California Lottery Chief Executive Officer and Director Anthony Molica has resigned after only seven months. Molica joined the California Lottery Sept. 2, 2003, after serving as executive director for the Washington Lottery. His last day was April 8. He has chosen to resign and join his family back in Washington state, said lottery representative Rosa Escutia. Gov. Arnold Schwarzenegger will appoint Molicas replacement. Philippine Charity Sweepstakes Office Chairman Maria Livia Singson-De Leon suffered a mild stroke while delivering a speech and was rushed to Baguio City General Hospital last week. She was later airlifted to Manila after her condition improved following a nine-hour brain surgery. Clyde Bevan has been appointed the new chairman of Lotterywest. Mr Bevan is a restaurateur who has launched the Dear Friends and Friends eateries. He replaces Kevin Campbell, whose contract expired on March 25. Under the guidance of Mr Campbell and chief executive Jan Stewart, Lotterywest raised more than $1.4 billion in revenue and provided a record-breaking $413 mil26 Public Gaming International May 2004
lion for beneficiaries between 2001 and 2004. The Kentucky Lottery Corporation announced the selection of Mary Harville as the KLCs new General Counsel. Harville comes to the KLC from the Louisville law firm of Reed Weitkamp Schell and Vice, where she has practiced for the past seven years. Scientific Games announced that Brad Mohs has joined the company as Senior Vice President Software Engineering as of March 3, 2004. Mr. Mohs was previously Senior Vice President and Chief Technology Officer for AutoTrader.com, the Internets leading automobile classifieds marketplace and consumer information website. Oberthur Gaming is proud to announce that Etienne Couelle, OGTs Chief Executive Officer, will return this summer to FCOs headquarters in France, where he will be promoted to a new strategic position. Emmanule Cousineau, OGTs Chairman and former Chief Executive Officer will replace him as CEO, while keeping her chair position.

Venezuala

VIA Cell (Virtual Integrated Applications, Inc.) is in negotiations with representatives for the Venezuela lottery, and several other Latin American lotteries, to provide cell phone applications to purchase lottery tickets directly from a users cell phone. Venezuela has more cell phone users than land line users and it is estimated that more than 54 million Latin Americans are on cellular phones. By 2010 that figure is projected to increase to 145 million.
28 Public Gaming International May 2004
It represents both how we see the future trend line for online sales and our laser-focused commitment to helping lotteries get there.

How are we doing this?

By developing bold, innovative online content; By deploying the right technology and organizing our internal support systems to allow for quick implementations; By applying solid marketing principles, many of which have led to the instant products remarkable and sustained growth; And by bringing a can-do attitude to every project.

Is this working?

Just ask the Pennsylvania Lottery, which launched MATCH 6 lotto our new, patent-pending Multi-Hand Easy-Win concept in late January and has watched its six-digit lotto sales soar. And with plenty of groundbreaking online content on our horizon, we offer one other commitment: Weve only just begun.

+1-770-664-3700 (USA)

2004. Scientific Games

Quoted from Bob Tedeschi, End of the Paper Chase, Business 2.0, March 2003, 64.
The organizational problem or conflict. The specific technical questions that must be answered to solve the problem. The rhetorical purpose (to explain, to recommend, to request, to propose) the report is designed to achieve. The following purpose statements have all three elements:
Current management methods keep the elk population within the carrying capacity of the habitat but require frequent human intervention. Both wildlife conservation specialists and the public would prefer methods that controlled the elk population naturally. This report will compare the current short-term management techniques (hunting, trapping and transporting, and winter feeding) with two long-term management techniques, habitat modification and the reintroduction of predators. The purpose of this report is to recommend which techniques or combination of techniques would best satisfy the needs of conservationists, hunters, and the public.
Report audience: The superintendent of Yellowstone National Park
When banner ads on Web pages first appeared in 1994, the initial response, or clickthrough rate, was about 10%. However, as ads have proliferated on Web pages, the click-through rate has dropped sharply. Rather than assuming that any banner ad will be successful, we need to ask, What characteristics do successful banner ads share? Are ads for certain kinds of products and services or for certain kinds of audiences more likely to be successful on the Web? The purpose of this report is to summarize the available research and anecdotal evidence and to recommend what Leo Burnett should tell its clients about whether and how to use banner ads.
Report audience: Leo Burnett Advertising Agency
To write a good purpose statement, you must understand the basic problem and have some idea of the questions that your report will answer. Note, however, that you can (and should) write the purpose statement before researching the specific alternatives the report will discuss.

Writing Proposals

Proposals suggest a method for finding information or solving a problem.1 Finding the information or solving the problem helps an organization decide whether to change, decide how to change, or implement a change that is agreed on. (See Figure 15.2.) Proposals have two goals: to get the project accepted and to get you accepted to do the job. Proposals must stress audience benefits and provide specific supporting details. In a memo supporting a new technology fee for all students, a universitys technology committee listed benefits for each suggested program that the fee would cover. For example, the committee recommended setting up undergraduate computing labs for specific disciplines. The related benefits listed for students were on-site software support and an improved sense of community for undergraduate majors. Proposals may be competitive or noncompetitive. Competitive proposals compete against each other for limited resources. Applications for research funding are often very competitive. Many companies will bid for corporate or government contracts, but only one will be accepted. In 2005, the National Institutes of Health awarded more than $23 billion, including research grants, research training, and fellowships, to universities, hospitals, nonprofits, small

Figure 15.2 Relationship among Situation, Proposal, and Final Report
Companys current situation We dont know whether we should change. We need to/want to change, but we dont know exactly what we need to do. We need to/want to change, and we know what to do, but we need help doing it. The proposal offers to Assess whether change is a good idea. Develop a plan to achieve desired goal. Implement the plan, increase (or decrease) measurable outcomes. The final report will provide Insight, recommending whether change is desirable. A plan for achieving the desired change. A record of the implementation and evaluation process.
Source: Adapted from Richard C. Freed, Shervin Freed, and Joseph D. Romano, Writing Winning Proposals: Your Guide to Landing the Client, Making the Sale, Persuading the Boss (New York: McGraw-Hill, 1995), 21.
businesses, and other organizations. The total sum may seem large, but at many universities hundreds of faculty write grant proposals, and the fate of those proposals plays a major role in the faculty members career as well as the reputation of the institution. Of the NIH institutional grants in 2005, Johns Hopkins University ranked first, receiving more than $607 million; the University of Pennsylvania ranked second, receiving more than $471 million.2 Noncompetitive proposals have no real competition. For example, a company could accept all of the internal proposals it thought would save money or improve quality. And often a company that is satisfied with a vendor asks for a noncompetitive proposal to renew the contract. To write a good proposal, you need to have a clear view of the problem you hope to solve and the kind of research or other action needed to solve it. A proposal must answer the following questions convincingly:
What problem are you going to solve? Show that you understand the problem and the organizations needs. Define the problem as the audience sees it, even if you believe that the presenting problem ( p. 471) is part of a larger problem that must first be solved. How are you going to solve it? Prove that your methods are feasible. Show that a solution can be found in the time available. Specify the topics youll investigate. Explain how youll gather data. When will you complete the work? Provide a detailed schedule showing when each phase of the work will be completed. Can you deliver what you promise? Show that you have the knowledge, the staff, and the facilities to do what you say you will. Describe your previous work in this area, your other qualifications, and the qualifications of any people who will be helping you. What benefits can you offer? For many proposals, various organizations may be able to supply the goods, services, or research needed. Show why the company should hire you. Discuss the benefitsdirect and indirect that your firm can provide. How much will you charge? Provide a detailed budget that includes costs for materials, salaries, and overhead. What exactly will you provide for us? Specify the tangible products youll produce; explain how youll evaluate them.

Youll be more convincing if you have already scheduled an interview, checked out books, or printed out online sources. 8. Work schedule. List both the total time you plan to spend on and the date when you expect to finish each activity. This is one list of possible activities; you may think of others for your project. Gathering information. Analyzing information. Organizing information. Preparing the progress report. Writing the draft. Revising the draft. Preparing the visuals. Editing the draft. Proofreading the report. These steps frequently overlap. Many writers start analyzing and organizing information as it comes in. They start writing pieces of the final document early in the process. Organize your work schedule in either a chart or calendar. A good schedule provides realistic estimates for each activity, allows time for unexpected snags, and shows that you can complete the work on time. 9. Call to action. In your final section, indicate that youd welcome any suggestions your instructor may have for improving the research plan. Ask your instructor to approve your proposal so that you can begin work on your report. Figure 15.3 shows a student proposal for a long report.
Choosing Topics to Investigate No report investigates all possible topics. Choose the ones that decision makers care most about and will find most useful. Specific topics will relate to the topic of the report. General topics can include managerial, technical, and social criteria. Here are some examples: Managerial Criteria
Cost (e.g., acquisition, maintenance, disposal; taxes). Market demand. Staffing requirements. Organizational impact (distribution of resources; effect on personnel, other projects, and image). Consistency with organizational goals.

Technical Criteria

Availability of technology, materials, parts. Compatibility with existing systems. Adaptability, flexibility, ability to be upgraded. Reliability, longevity, repair record. Compliance with legal codes (e.g., environment, Americans with Disabilities Act).

Proposals for Action

You can write a proposal for action or change in your organization. Normally, proposals for action recommend new programs or ways to solve organizational problems. As manager of compensation planning, Catherine Beck had to propose a compensation system when telephone companies Bell Atlantic and Nynex Corporation merged and again a few years later when Bell Atlantic merged with GTE to form Verizon. When two companies merge, each has its own pay scale, bonus policy, and so on; the problem is that the merged companies will need a single, unified system. In these two mergers, Beck had to recommend the system she thought would work best in the new company.3 Writing a proposal for action requires considerable research. When Catherine Beck had to propose a new compensation policy, she worked with a team of human resource and other managers plus compensation experts. Together they began by studying the existing policies of the merging organizations, including job titles, salary structures, bonus plans, and the system of performance appraisals. They compared the two systems, looking for their underlying principles. In the first merger, between Bell Atlantic and Nynex, they determined that the two plans were so different that they would have to create a completely new system. In the second merger, of Bell Atlantic and GTE, they concluded that the plans were similar enough to be modified and combined into a single system. After this internal research leading to an initial decision, preparing a proposal and implementing a system for tens of thousands of management employees took months in both mergers.4 Often, writing a proposal requires gathering information from outside the organization, too. Basic steps include reading articles in trade and professional journals, looking up data online, and talking to employees or customers.

Qualifications

Cite knowledge and skills from other classes, jobs, and activities that will enable you to conduct the research and interpret your data. We are all students enrolled in a business communication course, and the variety of our majorsmarketing, business, health and human performancegive us a broad perspective for this expansion project. Moreover, two members of our group are fluent in Spanish, which will aid in any language barriers we encounter. JOABA Consulting is committed to increasing our knowledge of international expansion and creating a quality report.
Work Schedule The following schedule will enable us to finish this report on time. Activity Gathering information Analyzing information Organizing information Writing draft/creating visuals Revising the draft Good Preparing presentation slides reports need Editing the draft good revision, editing, and Proofreading the report proofreadingRehearsing presentation as well as good research. Call to Action We are confident we can complete the assigned task with the schedule listed above. We would appreciate your suggestions and ideas for strengthening our plan to make our report better. Please approve our proposal so that we can begin preparing our report. It's tactful to indicate ns. you'll accept suggestio End on a positive, forward-looking note. Total Time 10 hours 7 hours 4 hours 6 hours 3 hours 3 hours 2 hours Allow plenty of time! 3 hours 2 hours Completion Date March 31 April 3 April 5 Time will depend on the length April 8 and topic of your April 9 report, your April 11 knowledge of the April 12 topic, and your April 14 writing skills. April 16

Sales Proposals

To sell expensive goods or services, you may be asked to submit a proposal. Be sure that you understand the buyers priorities. A phone company lost a $36 million sale to a university because it assumed the universitys priority would be cost. Instead, the university wanted a state-of-the-art system. The university accepted a higher bid. Dont assume that the buyer will understand why your product or system is good. For everything you offer, show the benefits of each feature. Be sure to present the benefits using you-attitude ( p. 76). Consider using psychological description ( p. 387) to make the benefits vivid.

Designing Questions for Surveys and Interviews
A survey questions a large group of people, called respondents or subjects. The easiest way to ask many questions is to create a questionnaire, a written list of questions that people fill out. An interview is a structured conversation with someone who will be able to give you useful information. Surveys and interviews can be useful only if the questions are well designed. Good questions ask only one thing, are phrased neutrally, avoid making assumptions about the respondent, and mean the same thing to different people. At a telecommunications firm, a survey asked employees to rate their managers performance at hiring staff and setting compensation. Although both tasks are part of the discipline of human resource management, they are different activities. A manager might do a better job of hiring than of setting pay levels, or vice versa. The survey gave respondentsand the company using the surveyno way to distinguish performance on each task.7 Phrase questions in a way that wont bias the response. In the political sphere, for example, opinions about rights for homosexuals vary according to the way questions are asked. More Americans oppose allowing gays and lesbians to marry legally than oppose legal agreements giving many of the same rights as marriage. Furthermore, the order in which the questions are asked may matter. In a survey in which the order of questions varied, more people favored legal rights for gay and lesbian couples when they already had been asked about gay marriage. Possibly, the order of questions encouraged them to draw a distinction between marriages and civil unions. With regard to homosexual relations, the number of people who say such behavior should be illegal is greater than the number who say consenting adults engaged in homosexual activities in private should be prosecuted for a crime.8 Avoid questions that make assumptions about your subjects. The question Does your wife have a job outside the home? assumes that your respondent is a married man. Use words that mean the same thing to you and to the respondents. If a question can be interpreted in more than one way, it will be. Words like often and important mean different things to different people. When a consulting firm called Employee Motivation and Performance Assessment helped Duke Energy assess the leadership skills of its managers, an early draft of the employee survey asked employees to rate how well their manager understands the business and the marketplace. How would employees know what is in the managers mind? Each respondent would have to determine what is reasonable evidence of a managers understanding. The question was rephrased to identify behavior the employees could observe: resolves complaints from customers quickly and thoroughly. The wording is still subjective (quickly and thoroughly), but at least all employees will be measuring the same category of behavior.9 Even questions that call for objective information can be confusing. For example, consider the owner of a small business confronted with the question How many employees do you have? Does the number include the owner as well as subordinates? Does it include both full- and part-time employees? Does it include people who have been hired but who havent yet started work, or someone who is leaving at the end of the month? A better wording would be

Adapted from Palmer Morrel-Samuels, Getting the Truth into Workplace Surveys, Harvard Business Review, 80, No. 2 (February 2002): 11118.
the survey to catch questions that can be misunderstood. Even a small pretest with 10 people can help you refine your questions.

Kinds of questions

Questions can be categorized in several ways. Closed questions have a limited number of possible responses. Open questions do not lock the subject into any sort of response. Figure 15.7 gives examples of closed and open questions. The second question in Figure 15.7 is an example of a Likert-type scale. Closed questions are faster for subjects to answer and easier for researchers to score. However, since all answers must fit into prechosen categories, they cannot probe the complexities of a subject. You can improve the quality of closed questions by conducting a pretest with open questions to find categories that matter to respondents. Analyzing the responses from open questions is usually less straightforward than analyzing responses from closed questions. Use an Other, Please Specify category when you want the convenience of a closed question but cannot foresee all the possible responses. These responses can be used to improve choices if the survey is to be repeated.
What is the single most important reason that you ride the bus? I dont have a car. I dont want to fight rush-hour traffic. Riding the bus is cheaper than driving my car. Riding the bus conserves fuel and reduces pollution. Other (please specify):
Figure 15.7 Closed and Open Questions
Closed questions Are you satisfied with the city bus service? (yes/no) How good is the city bus service? Excellent 1 Terrible Indicate whether you agree (A) or disagree (D) with each of the following statements about city bus service. A D The schedule is convenient for me. A D The routes are convenient for me. A D The drivers are courteous. A D The buses are clean. Rate each of the following improvements in the order of their importance to you (1 most important and 5 least important). _____ Buy new buses. _____ Increase non-rush-hour service on weekdays. _____ Increase service on weekdays. _____ Provide earlier and later service on weekdays. _____ Buy more buses with wheelchair access. _____ Provide unlimited free transfers. Open questions How do you feel about the city bus service? Tell me about the city bus service. Why do you ride the bus? (or, Why dont you ride the bus?) What do you like and dislike about the city bus service? How could the city bus service be improved?

When you use multiple-choice questions, make the answer categories mutually exclusive and exhaustive. This means you make sure that any one answer fits only in one category and that a category is included for all possible answers. In the following example of overlapping categories, a person who worked for a company with exactly 25 employees could check either a or b. The resulting data would be hard to interpret.
Overlapping categories: Indicate the number of full-time employees in your company on May 16: a. 025 b. 25100 c. 100500 d. over 500 Discrete categories: Indicate the number of full-time employees on your payroll on May 16: a. 025 b. 26100 c. 101500 d. more than 500
If People Can Misunderstand the Question, They Will Q: Give previous experience with dates. A: Moderately successful in the past, but I am now happily married! Q: How many autopsies have you performed on dead people? A: All my autopsies have been on dead people. Q: James stood back and shot Tommy Lee? A: Yes. Q: And then Tommy Lee pulled out his gun and shot James in the fracas? A: (After hesitation) No sir, just above it. Q: What is the countrys mortality rate?
Branching questions direct different respondents to different parts of the questionnaire based on their answers to earlier questions.
10. Have you talked to an academic adviser this year? (If no, skip to question 14.) yes no
A: 100%. Everybody dies. Q: Give numbers of employees broken down by sex.
Use closed multiple-choice questions for potentially embarrassing topics. Seeing their own situation listed as one response can help respondents feel that it is acceptable. However, very sensitive issues are perhaps better asked in an interview, where the interviewer can build trust and reveal information about himself or herself to encourage the interviewee to answer. Generally, put early in the questionnaire questions that will be easy to answer. Put questions that are harder to answer or that people may be less willing to answer (e.g., age and income) near the end of the questionnaire. Even if people choose not to answer such questions, youll still have the rest of the survey filled out. If subjects will fill out the questionnaire themselves, pay careful attention to the physical design of the document. Use indentations and white space effectively; make it easy to mark and score the answers. Label answer scales frequently so respondents remember which end is positive and which is negative. Include a brief statement of purpose if you (or someone else) will not be available to explain the questionnaire or answer questions. Pretest the questionnaire to make sure the directions are clear. One researcher mailed a two-page questionnaire without pretesting it. One-third the respondents didnt realize there were questions to answer on the back of the first page. See Figure 15.8 for an example of a questionnaire for a student report.

Hypothetical question: What would you say if you had to tell an employee that his or her performance was unsatisfactory?
Critical incident question: Youve probably been in a situation where someone who was working with you wasnt carrying his or her share of the work. What did you do the last time that happened?
A mirror question paraphrases the content of the last answer: So you confronted him directly? You think that this product costs too much? Mirror questions are used both to check that the interviewer understands what the interviewee has said and to prompt the interviewee to continue talking. Probes follow up an original question to get at specific aspects of a topic:
Question: What do you think about the fees for campus parking? Probes: Would you be willing to pay more for a reserved space? How much more? Should the fines for vehicles parked illegally be increased? Do you think fees should be based on income?
Probes are not used in any definite order. Instead, they are used to keep the interviewee talking, to get at aspects of a subject that the interviewee has not yet mentioned, and to probe more deeply into points that the interviewee brings up. If you read questions to subjects in a structured interview, use fewer options than you might in a written questionnaire.
Im going to read a list of factors that someone might look for in choosing a restaurant. After I read each factor, please tell me whether that factor is Very Important to you, Somewhat Important to you, or Not Important to you.
And the Survey Says. Increasingly, companies use surveys to measure their customers satisfaction with their products or services. But are they really using that data? A survey by Bain & Company of 362 companies and their customers has revealed a discrepancy between the companies and consumers perceptions of customer satisfaction. The survey found that while 80% of the companies thought they were providing a superior consumer experience, only 8% of the customers described their experience that way. Unfortunately, an even wider disconnect exists between measuring customer satisfaction and changing corporate business practices to achieve it. Getting data is one thing. But, circulating the findings and making sure the findings are put to use is another. So, when you go to the work of collecting data, make sure that you also make the data work for you.
Adapted from Christopher Meyer and Andre Schwager, Understanding Customer Experience, Harvard Business Review 85, no. 2 (February 2007): 11626.

If the interviewee hesitates, reread the scale. Always tape the interview. Test your equipment ahead of time to make sure it works. If you think your interviewee may be reluctant to speak on tape, take along two tapes and two recorders; offer to give one tape to the interviewee. Pulitzer Prize winner Nan Robertson offers the following advice to interviewers 17 :
Do your homework. Learn about the subject and the person before the interview. To set a nervous interviewee at ease, start with nuts-and-bolts questions, even if you already know the answers. Save controversial questions for the end. Youll have everything else you need, and the trust built up in the interview makes an answer more likely. Go into an interview with three or four major questions. Listen to what the interviewee says and let the conversation flow naturally. At the end of the interview, ask for office and home telephone numbers in case you need to ask an additional question when you write up the interview.
Observing Customers and Users
Answers to surveys and interviews may differ from actual behaviorsometimes greatly. To get more accurate consumer information, many marketers observe users. For example, one problem with asking consumers about their television-watching behavior is that they sometimes underreport the number of hours they watch and the degree to which they watch programs they arent proud of liking. Researchers have tried to develop a variety of measurement methods that collect viewing data automatically. Arbitron introduced the Portable People Meter (PPM), which receives an inaudible electronic signal from radio stations and broadcast and cable TV stations. Consumers simply carry the PPM, and it records their media exposure. One of the first results showed that consumers listened to radio more than they had indicated in diaries.18 Nielsen Media Research has added commercial viewings to its famous TV show numbers; advertisers are naturally anxious to know how many people actually watch commercials instead of leaving to get a snack or fastforwarding through them on digital video recorders.19 Nielsen has also started tracking college students viewing, installing its people meters in commons areas such as dorms. The new data boosted ratings for some shows, such as Greys Anatomy and Americas Next Top Model by more than 35%.20 Observation can tell marketers more about customers than the customers can put into words themselves. Intuit, a leader in observation studies, sends employees to visit customers and watch how they use Intuit products such as QuickBooks. Watching small businesses struggle with QuickBooks Pro told the company of the need for a new product, QuickBooks Simple Start.21 Miller Lite beer hired OgilvyDiscovery to observe men drinking beer in bars. The researchers observed the groups social behaviors, such as how close they stood to one another and how they took turns telling stories. These details later found their way into commercials, giving the message greater authenticity.22 Observation can also be used for gathering in-house information such as how efficiently production systems operate and how well employees serve customers. Many businesses use mystery shoppers. For instance, McDonalds has used mystery shoppers to check cleanliness, customer service, and food quality. The company posts store-by-store results online, giving store operators an incentive and the information they need to improve

Adapted from Bruce Nussbaum, The Power of Design, BusinessWeek, May 17, 2004, 86.
Using and Documenting Sources
In a good report, sources are cited and documented smoothly and unobtrusively. Citation means attributing an idea or fact to its source in the body of the report: According to the 2000 Census. Jane Bryant Quinn argues that. Citing sources demonstrates your honesty and enhances your credibility. Documentation means providing the bibliographic information readers would need to go back to the original source. The two usual means of documentation are notes and lists of references. Note that citation and documentation are used in addition to quotation marks. If you use the sources exact words, youll use the name of the person youre citing and quotation marks in the body of the report; youll indicate the source in parentheses and a list of references or in a footnote or endnote. If you put the sources idea into your own words, or if you condense or synthesize information, you dont need quotation marks, but you still need to tell whose idea it is and where you found it. See Figures 15.9 and 15.10 for examples of quoting and paraphrasing. Long quotations (four typed lines or more) are used sparingly in business reports. Since many readers skip quotes, always summarize the main point of the quotation in a single sentence before the quotation itself. End the sentence with a colon, not a period, since it introduces the quote. Indent long quotations on the left and right to set them off from your text. Indented quotations do not need quotation marks; the indentation shows the reader that the passage is a quote. To make a quotation fit the grammar of your report, you may need to change one or two words. Sometimes you may want to add a few words to explain something in the longer original. In both cases, use square brackets to indicate words that are your replacements or additions. Omit any words in the original source that are not essential for your purposes. Use ellipses (spaced dots) to indicate where your omissions are. See Figures 15.9 and 15.10 for examples. Document every fact and idea that you take from a source except facts that are common knowledge. Historical dates and facts are considered common knowledge. Generalizations are considered common knowledge (More and more women are entering the workforce) even though specific statements about the same topic (such as the percentage of women in the workforce in 1975 and in 2000) would require documentation. The three most widely used formats for footnotes, endnotes, and bibliographies in reports are those of the American Psychological Association (APA), the

no "p. before page number. original to make the quote fit into The problem is compounded by inadequate ventilation. The American Society of Heating, the Refrigeration, and Air-Conditioning Engineers recommends that a buildings heating, ventilation, structure and cooling system deliver 20 cubic feet per minute of outside air for each occupant (Aerias, of your 2004, Ventilation Rates section, par. 5). But, Michelle Conlin reports, some buildings provide sentence. only 5 cubic feet of fresh air per person a minute. And that fresh air may not be pure. Some
buildings have fresh air vents over loading docks and parking garages. Revolving doors pull in second-hand smoke like a chimney (117) from smokers who stand by the door.
Use only page number since author identified in sentence.
In the 1990s, responses to sick buildings often focused on the cost of solving the problema cost sometimes undertaken only after a lawsuit was filed (Nai B1). But recently, several companies have found that improving air quality pays for itself. Pennsylvania Power and Lights remodeling paid for itself in just 69 days by cutting absenteeism 25%, increasing productivity 13%, and reducing energy costs 69% (Aerias, 2004, Why Indoor Air Quality Should Be Improved, par. 4). Give page number for
Heading, paragraph number or screen helps reader facts, not just quotes. find material in Web sites without page numbers. Works Cited Copyright/update date List all works cited in text. Date you visited site
Aerias. Overview of IAQ Problems in Offices. 2004. 24 Sept. 2004
URL in angle brackets; List sources <http://www.aerias.org/office_overview.htm>. period after angle bracket. alphabetically.
Conlin, Michelle with John Carey. Is Your Office Killing You? BusinessWeek 5 June 2000: 114-28. Don't repeat hundreds. Environmental Protection Agency. An Office Building Occupants Guide to Indoor Air If URL is too long to Quality. 19 July 2004. 19 Sept. 2004 <http://www.epa.gov/iaq/pubs/ fit on one line, break occupgd.html>. Use date month year;
abbreviate month. after a punctuation mark.

Information reports collect data for the reader; analytical reports present and interpret data; recommendation reports recommend action or a solution. A good purpose statement must make three things clear: The organizational problem or conflict. The specific technical questions that must be answered to solve the problem.

Chapter 15

The rhetorical purpose (to explain, to recommend, to request, to propose) that the report is designed to achieve. A proposal must answer the following questions: What problem are you going to solve? How are you going to solve it? When will you complete the work? Can you deliver what you promise? What benefits can you offer? How much will you charge? What exactly will you provide for us? In a proposal for a class research project, prove that your problem is the right size, that you understand it, that your method will give you the information you need to solve the problem, that you have the knowledge and resources, and that you can produce the report by the deadline. Use the following pattern of organization for the cover letter for a sales proposal: 1. Catch the readers attention and summarize up to three major benefits you offer. 2. Discuss each of the major benefits in the order in which you mentioned them in the first paragraph. 3. Deal with any objections or concerns the reader may have. 4. Mention other benefits briefly. 5. Ask the reader to approve your proposal and provide a reason for acting promptly. In a project budget, ask for everything you will need to do a good job. Research current cost figures so yours are in line. In a proposal for funding, stress the needs your project will meet. Show how your project will help fulfill the goals of the organization you are asking for funds. Progress reports may be organized chronologically, by task, or to support a recommendation. Use positive emphasis in progress reports to create an image of yourself as a capable, confident worker. Use indexes and directories to find information about a specific company or topic. To decide whether to use a Web site as a source in a research project, evaluate the sites authors, objectivity, information, and revision date. A survey questions a large group of people, called respondents or subjects. A questionnaire is a written list of questions that people fill out. An interview is a structured conversation with someone who will be able to give you useful information. Good questions ask just one thing, are phrased neutrally, avoid making assumptions about the respondent, and mean the same thing to different people. Closed questions have a limited number of possible responses. Open questions do not lock the subject into any sort of response. Branching questions direct different respondents to different parts of the questionnaire based on their answers to earlier questions. A mirror question paraphrases the content of the last answer. Probes follow up an original question to get at specific aspects of a topic.

As your instructor directs, In Problems 15.14 through 15.16, a. Create a document or presentation to achieve the goal.
Write a memo to your instructor describing the situation at your workplace and explaining your rhetorical choices (medium, strategy, content, tone, wording, graphics or document design, and so forth).

15.14 Proposing a Change

No organization is perfect, especially when it comes to communication. Propose a change that would improve communication within your organization. The change can be specific to your unit or can apply to the whole organization; it can relate to how important information is distributed, to who has access to important information, how information is accessed, or any other change in communication practices that you see as having a benefit. Direct your proposal to the person or committee with the power to authorize the change.
15.15 Proposing to Undertake a Research Project
Pick a project you would like to study whose results could be used by your organization. (See Problem 16.5.) Write a proposal to your supervisor requesting time away from other duties to do the research. Show how your research (whatever its outcome) will be useful to the organization.
15.16 Writing a Progress Report to Your Superior
Describe the progress you have made this week or this month on projects you have been assigned. You may describe progress you have made individually, or progress your unit has made as a team.
15.17 Writing a Report Based on a Survey
As your instructor directs, Survey 40 to 50 people on some subject of your choice. b. Team up with your classmates to conduct a survey and write it up as a group. Survey 50 to 80 people if your group has two members, 75 to 120 people if it has three members, 100 to 150 people if it has four members, and 125 to 200 people if it has five members. c. Keep a journal during your group meetings and submit it to your instructor. d. Write a memo to your instructor describing and evaluating your groups process for designing, conducting, and writing up the survey. (See Chapter 14 on working and writing in groups.) For this assignment, you do not have to take a random sample. Do, however, survey at least two different groups so that you can see if they differ in some way. Possible groups are men and women, business majors and English majors, Greeks and independents, first-year students and seniors, students and townspeople. As you conduct your survey, make careful notes about what you do so that you can use this information when you write up your survey. If you work with a group, record who does what. Use complete memo format. a. Your subject line should be clear and reasonably complete. Omit unnecessary words such as Survey of. Your first paragraph serves as an introduction, but it needs no heading. The rest of the body of your memo will be divided into four sections with the following headings: Purpose, Procedure, Results, and Discussion. In your first paragraph, briefly summarize (not necessarily in this order) who conducted the experiment or survey, when it was conducted, where it was conducted, who the subjects were, what your purpose was, and what you found out. You will discuss all of these topics in more detail in the body of your memo. In your Purpose section, explain why you conducted the survey. What were you trying to learn? What hypothesis were you testing? Why did this subject seem interesting or important? In your Procedure section, describe in detail exactly what you did. The first 50 people who came through the Union on Wed., Feb. 2 is not the same as The first 50 people who came through the south entrance of the Union on Wed., Feb. 2, and agreed to answer my questions. Explain any steps you took to overcome possible sources of bias. In your Results section, first tell whether your results supported your hypothesis. Use both visuals and words to explain what your numbers show. (See Chapter 6 on