The Role of Exhibitions in the Marketing Mix Case Study #1

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1 The Role of Exhibitions in the Marketing Mix Case Study #1 Benefits of exhibitions: SOLUTION

2 Please prepare a presentation in which you explain the advantages of this project for the city and the region. Make statements on the following assignments: Assignment 1 An exhibition company needs only a few people to organise the events. Therefore there is no employment effect. To argue against this statement the students should read the following chapter: III. Benefits of Exhibitions, A. Economic Significance of Exhibitions The following questions should be discussed before working on the counter-arguments: What does an exhibition organiser need (e.g. personnel, material, services) to realise a trade show? If an exhibitor arrives from abroad how does he prepare his participation? What kind of support (e.g. personnel, material, service providers) does he need? If visitors come to a trade show where do they spend money and why? It is right that the organiser only employs a small number of personnel. However, depending on the size and development of the company up to 50 people are recruited out of the region. However, the stimulation of additional activities around exhibitions is the more important radiating effect. The region can expect hundreds of exhibitors, the staff of stand building companies and other people coming to the town. Additionally, thousands of visitors will travel to the exhibition. They all need accommodation, food and a lot of other services. Studies in other cities and regions show that the employment effect is strong. Exhibitions and comparable events guarantee jobs in craft, trade, tourism and further services. The stronger the effect is, the better the level of provision for infrastructure in the respective region is. The exhibition industry also stimulates the creation of new businesses, such as stand building companies, advertising agencies or craft enterprises. 2

3 Assignment 2 The return on investment is low compared to the high investment in the infrastructure. To find counter-arguments the students should read the following chapter: III. Benefits of Exhibitions, A. Economic Significance of Exhibitions The following questions should be discussed before working on the counter-arguments: What are the tasks of a local, regional and national government with regard to the economic development of a country? Is the investment in exhibition facilities a governmental task? Is the operation of exhibitions a governmental task? How is the profit margin of an investment calculated? This statement ambiguously combines two aspects which have to be treated separately. The term return on investment (ROI) is borrowed from the investment theory of enterprises. Enterprises invest in facilities and in their businesses and expect a certain level of profit which is compared to an average interest rate they get for long term bonds. The British organiser has calculated this ROI for his investment in the location and the facilities. However, he needs better accessibility to the location and a better technical infrastructure. This investment should be made by the local government. This type of investment is different as it is long-term orientated and focuses on the general promotion of trade and industry and the improvement of the quality of life for the people living and working in this region. This type of investment can only be quantified in limits (e.g. increasing tax payments, more long-term affluence). Most of the positive effects are not countable (e.g. well- constructed roads, better water quality, easy access to communication facilities). The investment in the infrastructure can t be assigned only to the British organiser. It is an investment for the whole region and for all people living there. The British organiser is only stimulating the investment. 3

4 Assignment 3 The capacity utilisation rate of the infrastructure is relatively low if only two annual exhibitions take place. To find counter-arguments the students should read the following chapters: I. Description of Fairs, Expositions and Exhibitions, B. Types of Exhibitions. The following market research (e.g. using the databases mentioned on page???) should be carried out before working on the counter-arguments: Research on the duration of different trade and consumer shows. Research on the months when exhibitions take place. Research on the different cycles of exhibitions. If the students are interested in more details they can also study some exhibitor manuals (own choice per internet) where they can find the construction and dismantling times for special exhibitions. The following questions should be discussed before working on the counter-arguments: When do trade shows usually take place (e.g. months, duration, order of days, opening hours)? What are the theoretical (365 days) and the practical (365 days out of season holidays religious days etc.) maximum utilisation times of an exhibition hall? The utilisation rate of an exhibition hall describes the number of days the hall is used in relation to the total number of days the hall can be usually used. There are a few different aspects to consider: If you calculate the total number of days the infrastructure is used for an exhibition you have to differentiate between the construction days for the stands, the actual event utilisation and the dismantling time for the stands. These days sum up to three to four weeks depending on the type of exhibition. The British organiser plans two events for the first year. The strategic target of an exhibition organiser is long-term orientated and includes other events. Each exhibition or comparable event needs enough time for its development; sometimes up to two years. Regarding this pre-condition the utilisation rate will increase in the following years. From experience it is well-known that during summer (mid- June, July, August) and winter time (mid-october, November, December) no exhibitions take place. The utilisation of the halls can be expanded if other events, such as consumer shows, concerts, sport events, congresses and special events take place in the exhibition halls. 4

5 Assignment 4 There are only a few companies in town belonging to the market segments concerned. Therefore no need is seen for such exhibitions. To find counter-arguments the students should read the following chapter: III. Benefits of Exhibitions, A. Economic significance of Exhibitions. The following market research (e.g. using the databases mentioned on page 28-31, 33) should be carried out before working on the counter-arguments: Try to get some post-show reports from trade shows. Compare the catchment area (in km) for these shows. Compare trade shows and consumer shows. Use the same post-show reports to list the foreign countries where the visitors and exhibitors are coming from. An excellent database is the homepage. There you can find the needed information easily. The following questions should be discussed before working on the arguments: What is the usual catchment area of a trade show and a consumer show? Comparing national and international shows what are the differences regarding the catchment area and the involved countries, both on the exhibitor and the visitor side? Exhibitions don t necessarily take place where either the demand or the supply is located. The offer of a business platform as suggested by the British organiser motivates producers and importers the supply side as well as retailers, craft enterprises or other potential visitors the demand side to meet and travel to the location where the exhibition is held. The catchment area is larger than assumed in the statement above. A distance of 100 to 150 km around the location is accepted by the visitors. The travelling distance of exhibitors is many times greater and depends on the quality of the trade show. A spin-off effect is that the local companies get easy access to new developments and are motivated to expand their businesses. 5

6 Assignment 5 Some of the members of the town council declare that they don t see any chance to establish trade fairs in the region as in Slovakia the people are used to newspaper and magazine advertising, TV and personal selling. To find counter-arguments the students should read the following chapters: III. Benefits of Exhibitions, C. Importance for Exhibiting Enterprises IV. Integrated Exhibition Marketing, B. Specific Marketing Aspects V. Trade Fair participation, C. Exhibition Targets. The following market research (e.g. using the databases mentioned on page 88) should be carried out before working on the counter-arguments: If the students are interested in more details, they also should study some exhibitor manuals (own choice per internet) where they can find the advertising tools the organiser offers to the exhibitors. The following questions should be discussed before working on the counter-arguments (page 13): What is the importance today of internet sales? What could virtual exhibitions look like in the future? Will virtual exhibitions replace real exhibitions in the future? The need to meet is generally accepted by most of the today s management. The classic promotion tools are still used for the first contact. However, if there are products and services which need explanation or applications of products have to be discussed or the amount of money for the investment is rather high, then face-to-face contact is an essential necessity. Exhibitions stand for: A better market overview; Building trust between business partners; A market place for a special market segment; A platform for networking; Efficient business; Etc. 6

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