Basic Knowledge

2. Planning and Implementing Fairs & Exhibitions (Organizer's Side)

2.1. Introduction/Objectives

The objective of a fair organizer is to make profit from the organization of a successful trade fair. "Successful" means a continuously growing number of exhibitors and visitors over the years, and the creation and maintenance of an excellent image of the fair.These goals can be achieved by applying target-oriented marketing and PR approaches, reaching a high degree of internationality, and positioning the fair as the worldwide leading event in a given industry branch. It also requires from the fair management a constant consideration of the future trends and technical developments of the fair business and its related services.

To achieve this set of objectives, the fair organizer has to put special emphasis on the following:

  • acquisition of exhibitors and visitors;
  • high quality of services provided to exhibitors and visitors;
  • constant development of infrastructure;
  • regular communications with exhibitors and the press;
  • relevant information to be provided to exhibitors, visitors, and the press.

2.2. Defining the Exhibition Subject

There are many ways to find a subject for a new exhibition.

The easiest way is to take out a part of an existing exhibition and develop it into an independent event.

Another option is to discuss with a trade association to create a fair for its related business sector.

More difficult is the definition of a fair subject based on market research.

2.3. Undertaking a Market Research

Once the subject of a fair for a specific business sector has been defined, it is important to find out if the number of possible participating exhibitors will be high enough to guarantee a significant representation of this business sector. This research should be based on regional, national, and international investigations.

It is also recommended to make a listing of national and international trade associations and organizations connected to the given business sector, in order to find out which one could become an actively supporting partner.

Market researches are also necessary to better know the needs and wishes of the possible exhibitors and visitors, and to be informed about the latest developments of the fair business in order to integrate these developments into the fair concept.

2.4. Developing the Exhibition Concept

It is highly recommendable to develop the concept of a new fair/exhibition in co-operation with a supporting partner of the trade community concerned by the fair, because it has got appropriate knowledge on the chosen subject.

Developing a fair concept is related to the identification of:

  • the associated product groups and sub-topics, in order to attract the right targets (exhibitors, visitors) and differentiate the fair from possible competitive events of the same branch;
  • the frequency of the event (every year, every two years, twice a year…), depending on the frequency of the innovations of the developed products/services (this varies from branch to branch). If the frequency is too long (every three years for instance), it might happen that a competitive fair fills the gap;
  • the date and duration of the event;
  • the location of the event;
  • the target groups of exhibitors and visitors;
  • possible meetings to be linked to the event;
  • the terms and conditions for exhibiting (opening hours, set-up and dismantling times, terms of payment, general information on security, liability, insurance, cancellation, etc).

2.5. Attracting Exhibitors and Visitors

According to the concept of the fair/exhibition and the defined product groups, the acquisition of exhibitors can start with the full range of instruments of the marketing-mix (product/offer, price/conditions, distribution, communication).

Attracting visitors starts long before the fair. As a first step, the organizer can communicate on general information about the fair (name, subject, city and venue, dates and opening hours, entrance fees, linked meetings and other complementary programmes). Later, when a significant number of exhibitors have signed their participation contracts, information about them can be added.

The organizer can provide the exhibitors with necessary advertising and promotion materials to be distributed to their own customers they would like to welcome on their stand.

Another important activity for exhibitors' and visitors' acquisition is the communication and PR campaign towards the press.

2.6. Analysing the Exhibition Results

At the end of a fair/exhibition, visitors' and exhibitors' opinion polls should be carried out to evaluate the success of the event. It is indeed of the utmost importance for the fair organizer to assess the success of the fair by analyzing if the set objectives have been reached. If some of the objectives have not been reached, it is important to impartially analyze the reasons and to develop a strategy to avoid replicatingthese mistakes for the next event.

The quantitative criteria for defining the success of a fair are based on:

  • the revenue;
  • the rented area;
  • the amount of sold tickets;
  • the amount of sold catalogues;
  • the revenues generated from services;
  • the number of exhibitors;
  • the number of visitors. The qualitative criteria for defining the success of a fair are based on:
  • the types of exhibitors;
  • the types of visitors
  • the media response to the fair;
  • the "climate" or ambiance felt during the fair.

The types of visitors can be known and analyzed via opinion polls carried out during face-to-face interviews with a representative sample of visitors at the fair. These visitors' opinion polls should take into account the following criteria:

  • the origin of the visitors (international, national, regional);
  • their position in their companies;
  • the business sector they represent;
  • the duration of their visit;
  • the frequency of their visits to this fair or to other fairs of the same kind.

These visitors' information are usually published by the organizer, as it is a good way to convince exhibitors of the quality of the event.

Besides visitors' analyses, it is also important for the fair organizer to survey the exhibitors´ opinions, wishes and feelings about the event, through interviews with a few selected people. The results can be used to improve the fair concept, provide better services and enhance the relationships with the exhibitors. They can also be communicated to the press.

2.7. Calculating the Exhibition Profitability

The Contribution Margin calculation is a short-term controlling instrument, which suits well for calculating the profitability of a trade fair/exhibition. It clearly separates variable costs (which can be influenced on a short-term basis) from fixed costs (which can not be influenced on a short-term basis).

The advantages of the Contribution Margin calculation are as follows:

  • The evaluation of variable costs is the basis for the internal allocation of costs per task;
  • Strict separation of variable and fixed costs enables a clear allocation of costs per task;
  • It facilitates the management by objectives, because a cost is allocated to each task. Costs can be better planned, analysed, and controlled;
  • When calculating the profitability of a fair, the general expenses and overheads of the organizing company must be taken into consideration.

The Contribution Margin calculation answers the needs of different hierarchy levels:

  • For the project manager of the fair, the relevant controlling instrument is the Contribution Margin 1, which is calculated from the fair revenues - (minus) the fixed and variable costs directly related to the fair;
  • For the head of the Division, the relevant controlling instrument is the Contribution Margin 2, which is calculated as the Contribution Margin 1 including the fixed costs of the Division;
  • For the Executive Board, the relevant controlling instrument is the Contribution Margin 3, which is calculated as the Contribution Margin 2 including the company-related fixed costs. The Contribution Margin 3 finally gives a response on the profit or loss of a fair.

The Return On Investment (ROI) is the product of two indices ("Turnover Profitability" and "Capital Turnover"), and describes the annual profitability of the invested capital:

  • the "Turnover Profitability" analyzes the profit in relation to the turnover.
  • the "Capital Turnover" analyzes the turnover in relation to the invested capital.

The "Payback Period" is the necessary time to gain back the capital invested into a fair. The Payback Period should not exceed three years.

In many companies, the claimed minimum profitability is between 10% and 20%.

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