Monday, June 8, 2015

Trade Show Over Budget

Trade shows are critical to growing your self-employed business, but it is also a great occasion of burn-out for lack of preparation and timing.  I spend time detailing when and where and how to visit a trade show in my classes, and found this study interesting:
First, with the decline of manufacturing in Europe and the accelerated growth in Asia, the number of potential exhibitors in the catchment basins of European trade shows decreases, whereas the market potential ofAsian events increases. Second, to exploit the commercial opportunities in high-growth Asian markets, European producers need to exhibit at Asian trade shows. This causes a reduction in the promotional budgets allocated to trade show participation in Europe, where commercial presence is more established and other promotional instruments can be employed to maintain relationships with buyers (e.g. individual events and existing salesforce). In contrast, the budget for Asian events increases. Third, Asian buyers have more limited incentives to travel to European trade shows as a result, since they can see much of the European offering at local events.
To be sure, if you plan to trade worldwide, think Hong Kong as a venue and target opportunity for just about any category of industry.  A fellow was telling em the other week he figured his budget would be $15,000 for a show all in, I told him that was too much for too little solid business.  There is a sort of sliding scale of market penetration and reasonable trade show costs, something I've worked out and will be delighted to send to anyone who would like to see such a decision tree.

And then -

Interstoff Asia also experimented with market-sensitive exhibition layouts. For a long time, trade shows in Europe and elsewhere had arranged the exhibitor layout according to nationalities. One of the reasons behind such practices was related to the fact that national pavilions were often organized and financially backed by national export promotion policies (Seringhaus and Rosson 1998), which rented larger exhibition areas from trade fair organizers and offered them to national firms at a subsidized price. Exhibitors at these collective stands were typically small and medium-sizedfirms in the early phases of their internationalization processes, lacking the marketing competencies and financial resources necessary to take part in international trade fairs on their own. During the 1990s, Interstoff Asia organized the exhibitor layout according to product groups in order to help buyers find the product groups they were looking for more easily, but national pavilions still remained an important feature of the show. As reported by Haisma-Kwok(2001, p. 10), buyers often complained about this: ‘I just wish they’d organize by fabric and not by country . . . It doesn’t matter where it’s from, we just want to see what we need’, said a US buyer of fabric; ‘I also prefer to categorize by fabric’, replied Interstoff Asia’s project manager. ‘However, this show is also supported by government association, like Korea’s and Taiwan’s. The companies cannot support themselves, they come in a group and askto adhere to a group.’

See, this is such nonsense and it is coming to an end.  Those "national pavilions" so odious to the buyers are a money-maker to the exhibition organizers who sell "pavilions" the cost of which is borne by taxpayers for people demonstrably not ready to be in a booth.  Here again, welfare transfer payments so distort the market.

One way to burn out is to join one of those pavilions.  Here again my decision tree .pdf will show when and how to join a trade show effectively, to what degree.

The fact that the shows are organized contrary to the needs of the buyers, and are organized around welfare-transfer payments instead, means that by knowing this you can trim your sails to win in this environment.

With budget crises galore, expect these kinds of frivolities to be cut back, bringing new opportunities for market-based trade shows.

Feel free to forward this by email to three of your friends.