Analysis of perspective trends in trade fairs. Aleš Řehák - PDF

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Analysis of perspective trends in trade fairs Aleš Řehák Bachelor Thesis ABSTRAKT Cílem této bakalářské práce je analyzovat současný stav veletržnictví a navrhnout doporučení, která by dopomohla

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Analysis of perspective trends in trade fairs Aleš Řehák Bachelor Thesis 2008 ABSTRAKT Cílem této bakalářské práce je analyzovat současný stav veletržnictví a navrhnout doporučení, která by dopomohla podnikům vystavovat úspěšněji. Teoretická část se zabývá aktuálními veletržními trendy a marketingovými činnostmi, nezbytnými pro úspěšnou účast na veletrhu. Analytická část se soustřeďuje na seznámení z výsledky provedeného dotazníkového šetření a následná SWOT analýza má za úkol charakterizovat silné a slabé stránky veletrhů. Na konci této práce jsou uvedeny návrhy na zlepšení, které by měly dopomoct k efektivnímu vystavování. Mezi klíčová doporučení patří zlepšení marketingových aktivit a přípravy na veletrh, účast na virtuálním veletrhu a využití nekonvenčního vystavování. Klíčová slova: veletrh, virtuální veletrh, veletržní trendy, marketingové strategie, nekonvenční vystavování, komunikační mix ABSTRACT The aim of this Bachelor thesis is to analyze a current trade fairs situation and suggest improvements, which would help companies to exhibit more successfully. The theory explains the latest exhibition trends and marketing activities, which are essential for a successful participation at the trade fair. The analytical part concentrates on familiarizing with the results of questionnaire investigation and subsequently the SWOT analysis determines weak and strong sides of trade shows. At the end of this work are mentioned proposals for improvements, which would help companies to exhibit efficiently. The key recommendations include improvements in marketing activities and trade show preparation, participation at the virtual trade fair and the usage of the unconventional exhibiting. Keywords: trade fair, virtual trade show, trade show trends, marketing strategies, unconventional exhibiting, communication mix ACKNOWLEDGEMENTS I would like to thank my director of this thesis doc. Ing. Miloslava Chovancová, CSc. for her help and comments during the whole time when my thesis was written. Her vocational guidance was excellent and I appreciate her recommendations, which helped me to finish my thesis in the right way. My thanks also belong to my girlfriend Miluše Kyjovská who helped me with filling the questionnaires at the GO and RegionTour trade fair in Brno. CONTENTS INTRODUCTION...8 I THEORY TRADE SHOW AS A POWERFUL MARKETING TOOL DEFINITION OF TRADE FAIR TRADE FAIR HISTORY TRADE FAIR OBJECTIVES Company most common objectives Experts aims Aims of non-expert attendees Aims of media representatives TRADE SHOW SEGMENTATION Place of holding Length of the show Type of exhibition ground Intention Regularity ROLE OF THE TRADE SHOWS IN MARKETING COMMUNICATIONS Communication benefit of the trade show TRADE SHOW BUDGET SECONDARY RESEARCH TRADE SHOW TRENDS VIRTUAL TRADE SHOWS Costs expenditure Exhibiting period Virtual trade show booth Communication within online trade show EComXpo, LLC the first online tradeshow for ecommerce marketers ENVIRONMENTAL FRIENDLY TRADE SHOWS Eco-friendly tradeshow display structures Green promotional products UNCONVENTIONAL EXHIBITING Mobile marketing Trade shows by invitation Outdoor tradeshows Small and regional trade shows Trade shows consolidation Experiential exhibiting Hotel suite vs. exhibition center CONVENTION CENTER TECHNOLOGIES Wi-Fi coverage Digital conference program Security and surveillance equipment...25 3 GROWTH IN TRADE SHOW MARKETING STRATEGIES Pre, at and post show marketing Websites and s Relationship marketing Telemarketing Direct mails Onscreen advertising Search engine marketing strategy Online advertising Media packaging SUMMARY OF THE THEORETICAL PART...32 II ANALYSIS ANALYSIS OF TRADE FAIRS PRIMARY RESEARCH AND SWOT ANALYSIS GOAL OF THE PRIMARY RESEARCH METHODOLOGY OF THE RESEARCH QUESTIONNAIRE EVALUATION ASSESSMENT OF SET HYPOTHESES SWOT ANALYSIS PROPOSALS FOR IMPROVEMENTS RECOMMENDATIONS FOR TRADE FAIR PREPARATION RECOMMENDATIONS IN MARKETING ACTIVITIES PARTICIPATING AT THE ONLINE TRADE SHOWS UNTRADITIONAL EXHIBITING...49 CONCLUSION...50 WORKS CITED...52 LIST OF ABBREVIATIONS...55 LIST OF FIGURES...56 LIST OF TABLES...57 APPENDICES...58 TBU in Zlín, Faculty of Humanities 8 INTRODUCTION Companies are conscious of the fact that if they want to overcome strong competition pressure they will need to generate marketing activities and invest huge money to their promotion. Because of that marketing has become inseparable part not only in the companies policies but also in our lives. We are used to see huge billboards along motorways, being disturbed by commercial spots in TV and radio, bombarded by advertising s, pop ups and leaflets. Rise in the marketing strategies that should subjugate all of us is enormous. Invented tactics and increasing emphasis on the end users are called to deliver the companies message to the broadest public attention. The present time is characterized by a constant technological progress and face-to-face communication in doing business is not as needed as in the previous years. Nevertheless the traditional tools of marketing communications are still important and hold the same positions. Trade fairs are not exception and occupy a significant ranking in the communication mix. They are one of the oldest communication tools and have been regarded as an effective promotional tool since the beginning of their existence. On the other hand trade fairs are also affected by a technological progress both negatively and positively. One of the major problems of the participation at the event is a necessity of huge financial resources. Due to that smaller companies can not afford the exhibiting so often. The main aim of today s exhibiting is not only an introduction of the innovations and news in a specific line of business but also image building and matter of prestige. If the companies participate at the trade fair they want to maximize their return of investment. Reaching the set aims is quite difficult and companies should use adequate marketing strategies, which would help them to exhibit successfully. The accumulative trend in a usage of the Internet gains strength all over the world. More and more households and companies use this medium and the global network is becoming the zone where business resorts. News is not introduced at trade fairs as it was customary in the past but thanks to the Internet the public knows newsflashes and innovations in advance. Moreover the information presented at the Internet is accessible for a general public and not only for the trade fair participants. The position of trade fairs is weakened and that is why their future existence would be endangered. Each of the above mentioned aspects led me to make a study that would appraise current trade fair situation. My Bachelor thesis was written with a view to informing about trade TBU in Zlín, Faculty of Humanities 9 show trends and marketing activities, which would help companies to promote them in a more effective way. The suggested recommendations and proposals for improvements are based on the secondary and primary research, which were done within the study. Although the presented bandwagons in my Bachelor thesis are not so usual in our country, I hope that my work will contribute not only to gaining theoretical knowledge but also help some company to exhibit in a more appropriate manner. TBU in Zlín, Faculty of Humanities 10 I. THEORY TBU in Zlín, Faculty of Humanities 11 1 TRADE SHOW AS A POWERFUL MARKETING TOOL 1.1 Definition of trade fair Trade show is an organized event, where at the same time meet exhibitors with potential buyers. It is hold for a specific purpose and a character of the trade fair changes during the time. (Vysekalová et al. 2004, 16-22) 1.2 Trade fair history The emergence of trade shows is dated to the distant past when people bought products on the open-air market on the occasion of Christian holidays or various social graces. At that time there was no massive communication. Therefore products were not advertised and sellers did not feel a need to boost the sale. In the 15 th and 16 th century the information was spread by written messages. Later the system of the postal service was used for spreading information. A massive communication was limited on account of a low cultural level of society and lack of freedom. The trade shows and exhibitions have been changed through the time from the primitive ones to the most demanding ones. This progress is attributed to the economical, scientific and cultural development. The major aim of trade show in the past was to sell and buy products. Companies exhibiting in today s trade fairs have much more extensive objectives. (Vysekalová et al. 2004, 17-19) 1.3 Trade fair objectives The exhibitors should know their aims at the trade fair, so that organizers would offer them an adequate environment. There is a problem that exhibitors not always know the most important aims. Generally, if the company executives do not know three major aims of the company exhibiting they are not prepared to be exhibitors. The exhibitors aims vary according to the company s field of business and character of the event. However, the most common objectives remain the same. (Vysekalová et al. 2004, 42-45) Company most common objectives Presentation of the company Company image building Launching of the new product Gaining new customers and retaining current customers Increasing product consumption and brand awareness TBU in Zlín, Faculty of Humanities 12 Make a contract Communication in B2B sector (Svoboda et al. 2002, 17,29,62-63) Experts aims To gain a survey about the situation on the market Familiarizing with innovations Looking for specific products and prices Analysis of competitors Making business To get new contacts Taking part in the vocational seminars or conferences Aims of non-expert attendees Gaining experiences and having a fun To receive bonuses, presents, samples and other staff Comparing prices To buy or order products or services for a discount price Checking the premieres and news in a specific branch Aims of media representatives An assemblage of materials about news on the market A personal meeting with marketing agents in order to advertising A participation at the press conferences, seminars and associated programs A possibility to contact VIPs more easily, if they visit the event Own image building and exchanging of contacts (Vysekalová et al. 2004, 60-64) 1.4 Trade show segmentation Trade fairs can be divided into few groups according to various criteria Place of holding World: exhibitors and visitors from the whole world International: 20 % of a exhibition surface must be occupied by foreign exhibitors or 4% of the visitors must be foreigners National: take place in a one specific country TBU in Zlín, Faculty of Humanities 13 Regional: a sphere of activity is from ten to fifty kilometers Local: it is earmarked for exhibitors and visitors from a specific locality Private: intended for a specific group of people (Vysekalová et al. 2004, 24-25) Length of the show Long-term: the length of exhibiting lasts for months Medium-term: it lasts for one month maximum Short-term: a few days of exhibiting Presentations: it lasts several hours but maximum length is one day Type of exhibition ground Stable exhibition grounds Portable exhibition grounds Provisional Intention Highly professional Specialized According to branch Vendor Informative Educational Special-interest Regularity Regular: trade show always takes place in the same period Irregular One-off (Galkaněvič et al. 1999, 9) 1.5 Role of the trade shows in marketing communications Trade shows are a part of the marketing communications and one of the important tools of the communication mix. (Vysekalová et al. 2004, 38) In purpose of a maximum impact of the exhibitor to the attendee, marketers turn to the broader concept of marketing communication and promotional strategy. This approach is TBU in Zlín, Faculty of Humanities 14 called integrated marketing communications (IMC) and includes media advertising, direct mail, personal selling, sales promotion, PR and sponsorship. (Kurtz and Boone 2006, 482) The role of trade shows in the communication mix is obvious but the place where should be these events put is unclear. The Belgian study places trade shows on the 4 th position with no differentiation between companies that exhibit often, seldom or never. The results are given in the table below. (Vysekalová et al. 2004, 40) Table 1 A position of the trade fairs in the communication mix Exhibiting companies Not exhibiting companies Tool Score (max. 5) Tool Score (max. 5) 1. Personal selling 4,09 1. Personal selling 3,51 2. Direct marketing 3,48 2. Direct marketing 3,13 3. Own activities 3,36 3. Own activities 2,99 4. Trade fairs 3,35 4. Trade fairs 2,83 5. PR 3,34 5. PR 2,82 6. Technical journals 3,19 6. Technical journals 2,23 7. Sponsorship 2,33 7. Sponsorship 2,03 Source: (Vysekalová et al. 2004, 40) Communication benefit of the trade show Trade show is a very important member of the communication mix for the sake of several facts. The most powerful one is a face-to-face contact, which is not replaceable by any other way of communication. The exhibitors but also the visitors have clearly advantageous position for a transaction of business because both sides attend the event with the aim of searching or providing information and expressing opinions. The show is set to the sharply defined location and time and the products can be presented in a real size and in the moment of their function. Thanks to that, the reaction of attendees can be seen and exhibitors can answer their questions and develop their ideas. Basically, exhibitors should meet the costumer s needs and wants and be prepared to hold a dialog. (Svoboda et al. 2002, 11-12) TBU in Zlín, Faculty of Humanities Trade show budget Determining trade show budget is one of the most difficult parts of preparation for the event. Firstly, they need to choose at which trade fair is their participation essential and at which not. Pouring money to the event where is not supposed sufficient feedback is wasting of funds. Exhibitors would be also aware of the risks connected with trade fair participation. Setting up objectives is a self evident part of the preparation for the event and companies should know what aims would be reached. Companies usually outline possible investments to the pie chart and predict which segment will need more money and which probably less. They ask question if the total revenue overmatch total costs. If not, participation at the trade fair would not be effective. Exhibitors calculate their total costs properly after the event and compare that with the total revenue. Then they ascertain if the participation at the event brought an adequate ROI. (BusinessEvolved.com) How most companies spend their trade show budget Pre-show promotion 27% 4% 23% Show services Miscellaneous Physical display 3% 11% 10% 16% 6% Refurbishing Transportation Special advertising Space rental Figure 1 How most companies spend their trade show budget Source: (Adler Display) TBU in Zlín, Faculty of Humanities 16 2 SECONDARY RESEARCH TRADE SHOW TRENDS Basic features of trade fairs remain the same for the whole time of being. Verified marketing tools have had still their role in trade fairs. On the other hand, an uncontrollable progress brings new innovations, which help exhibitors to attract attendee s attention. Especially progress of information and communication technologies extends a sphere of activity. Furthermore, the exhibitors realize significance of being thrifty in the environment and use materials, which do not have an environmental impact. 2.1 Virtual trade shows A rapid development in the Internet technologies caused that Internet takes a notable position in doing business. Owing to this progress, show organizers attempted to transfer trade fairs from the classical environment to the virtual one. In those days a virtual trade fair started to exist. (Svoboda et al. 2002, 6-7) It is defined as an online version of the event at which goods and services for a specific industry are exhibited and demonstrated. (Whatis.com) Costs expenditure Virtual trade shows were devised mainly in purpose to reduce costs of exhibiting. The exhibitor, who decides to promote his services or products virtually, can save more than half of the costs when exhibiting in the physical event. Nevertheless it also depends on the number of attendees and number of exhibitors. Jennefer Traeger, a spokesman of Unisfair, which is a company providing online shows claimed that costs of clients like IBM and Nortel were less than total shipping costs for physical events held in the past. In addition to that, their booths visited more than attendees. (Wagner 2007) Another big companies focused on the exhibiting online and among them can be seen such trade names as Microsoft, AMD, Oracle or Dell. The attendance of the show, where these companies exhibited was more than 1 million unique visitors. No wonder that this kind of exhibiting becomes still more popular. According to Tradeshow week magazine mid to large sized companies spend more than $550,000 every year for exhibiting. As opposed to the online exhibiting, where a company pays around $20 a month plus expenditure for a virtual booth. Although online exhibiting is on increase, there is lack of organizations providing these types of events. (LaMotta 2007) TBU in Zlín, Faculty of Humanities 17 Associations that offer online trade shows 7% No intention 33% Currently have Considering or evaluating 60% Figure 2 Associations that offer online trade shows Source: (Williams 2003) Exhibiting period Considering that classical exhibitions last approximately from 3 to maximun 5 days, they are at disadvanatage in compare with online exhibitions. Online exhibiting usually does not have any time lag to which the trade show is supposed to be done. The companies can promote their products and services 24 hours a day, 7 days a week Virtual trade show booth Trade show booth is a heart of the company promotion. That is why exhibitor should give attention to its final apperance. For this purpose developers of trade show booths are available or most organizers of virtual exhibiting provides a specially designed software, in which the booth can be easily projected. Formats of exhibitions range from a basic directory of companies to the highly elaborated ones. At the present time 3D booths are more used because participants can feel like at the real event. The virtual booth has the same function as the real one. It is used for showing products and services, presenting product demos, and distributing literature. Attendees can view demos, collect literature and store it in the virtual briefcases. (Conventions.net) The trade shows floor is usually divided into two parts. The first floor of event displays a layout of booths and their appearance in miniature. Clicking on a specific booth will allow the attendee to see the company s booth maximized. During the visit attendees can easily communicate with company representatives, ask them questions and collect information. Many booths also provide giveaways and prize competitions. Furthermore, the shows do not offer only communication between attendees and exhibitors but also between attendees TBU in Zlín, Faculty of Humanities 18 themselves. The communication is done via internal s, instant messaging, exchanging virtual business cards or talking with Skype or ICQ. (Webmastercentral.co.uk under the heading FREE Access to ecomxpo ) Communication within online trade show A personal contact is the most appreciated feature of classical trade fairs. Online events do not offer communication directly but vicariously. Exhibitors can not read from the attendee s post
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