Chapter II: Literature
Review
Etymologically,
the word fair comes from the Latin fair, which has survived in Spanish. Some
authors also propose a history of this word related to the term forum,
including infomercial (Lacour-Gayet, 1958) (Postan, 1972), referring to the
concept of solemnity or pilgrimage. Gradually, these parties are linked to
commercial practices and, consequently, the commercial transactions take
precedence over religious aspects. The concepts of fair, as well as its
elements have evolved throughout history. In regards to the place where the
medieval fairs took place, history identifies a few, confined mostly to France.
Sidonie Apollinaire notes the existence and any fair celebrity already in the
5th century. The fair of Saint Denis enjoyed great attendance in the seventh
century (Postan, 1972) organized in October to dispense wine and honey to
cities located more to the North, which lacked of beekeeping and vineyards. Most
important, perhaps, are the Saint Germain and Champagne, replaced in the 14th
century by witches, Cologne, Frankfurt, Geneva and Lyon. In 1084 an
international character, “The nundina fair” took place for the first time in “Thourout.”
Numerous
exhibitions were created by the 12th century. Four large calls took place in
England in the 13th century: Saint Ives, Boston, Northampton, and Winchester.
There were others of the same type in the countries of Western Europe. However,
none equals six large Champagne fairs: Lagny, bar-sur - Aube, Provins, two
annual, and Troyes, many others, as well as of the Brie. Italian merchants sold
them products of the Mediterranean and Arab countries and bought goods from
Northern Europe, especially clothing, and wool for export to the South. For a
long time, these six shows were the backbone of all international trade.
Recreational and cultural elements to which we alluded before have not
disappeared. On the other hand, the effects that trade created throughout the Middle
Ages in the context of the fairs have not only passed to posterity but play a
very important role in our current civilization and are present in our daily
lives.
Trade Fairs as Marketing Tool
The difference
between the two is less to do with the discipline itself or the techniques used
as to its application. Webster (1994) stated that the distinction between both
branches of the marketing is given by the different nature of the buyer and the
use that you will give to the product.
The distinctive
features of the Industrial marketing, against the consumer or services can be
summarized in four main areas, (a) greater technical complexity of products, (b)
functional interdependence, (c) greater interdependence buyer and seller, and
(d) greater complexity of the buying process. In this situation, trade fairs
play an important role in the strategy of industrial marketing that:
1. Facilitates
the presentation of equipment technically complex
2. It
is a social event that serves as a meeting point for members of the company
3. A
social event serves as a meeting point for suppliers and customers.
4. It
can also speed up the sale process, since it brings together marketing tools
that facilitate the fulfillment of the objectives of each of the stages of the
selling process.
The frame of the
fair, in industrial marketing policy, is under discussion. However, the most
widespread opinion is considering the fair as a marketing tool available to the
company for the achievement of their business objectives. Their application
requires the use of other tools such as market research, communication, and
sales force. On the other hand, the participation in the fair means for the exhibitor
decisions relating to the elements of the marketing mix. With respect to the
product, it is necessary to consider the range of product to expose, the
maintenance or not of a common brand policy, what should be the design of the
product. As part of the mix of prices and conditions of payment, the
participation in the fair allowed to negotiate pricing policies taking into
account costs arising from freight and insurance to, packing. From the point of
view of the distribution mix, the fairs highlight the need to reorganize the
structure of sales or the management of storage and transport. Finally, and in
terms of communication, the fair is the meeting point between bidders and
applicants, where there is an exchange of information. According to some
authors, the communication is precisely the most important role played by the
trade fairs.
In this way, we
could characterize the fairs as a marketing tool available to the company for
the achievement of their business objectives, which main function, are
communication, and transmitting information between supply and demand flows.
The planning of the fair program is, in turn, a combination of very different
instruments at the disposal of enterprises such as the sales network, the
communication policy, market research, or distribution policy. The main
advantage that fair represents, as marketing tool, is the existence of a target
audience of high quality, which shows a predisposition towards the products
presented there. The cost of sales is less than other commercial forms, unlike
other commercial fair tools allow three-dimensional exposure of the products to
see, hear, and manipulate. Likewise, there is a personal contact between
suppliers, customers, and users.
Fairs are the medium that enables
simultaneously a combination of functions as diverse as, commercial promotion,
advertising, sale actions, public relations, and market research. Fairs facilitate the observation of the
performance of competitors as well as obtaining information about them. Fairs allow
perform products demonstration. Fairs are an opportunity of establishing
relationships with key decision makers among buyers. A fair facilitates the
increase of the number of contacts. Fairs improve the process of introduction
of new products on the market. From the point of view of international
marketing, fairs facilitate the introduction to new foreign markets. Fair gives
the possibility to small competing companies "on equal terms" with
much larger firms. Fairs allow acting on different stages of the buying cycle,
helping to generate awareness among potential customers, serving as a tool to
strengthen relationships with current clients, facilitating the evaluation of
the product through demonstrations, and serving to close sales.
However, and
despite the benefits, some companies are reluctant to participate as exhibitors
at these events. Reasons for non-participation in fairs include managers who assume
the participation as one obligation rather than as an opportunity that should
be exploited. Participation in such events tends to be expensive, in both time,
human, and financial resources. Profitability is difficult to measure. Both
buyers and sellers have to compete in a very small space and period. Given the
typical crowds of the fairs, the communication process can be affected as well
as the details of the negotiations. There is a growing difficulty to select the
appropriate events, given the atomization of the exhibition offer. As it has
been highlighted, one of the most important brakes to the use of the
traditional fair is the cost of participation.
Likewise, the
absence of systems to determine their effectiveness in the whole of the
commercial program is a major limitation. Times have changed since the middle
years to the 19th century and to the development of new technologies, changing
the way of doing business and facilitating commercial exchanges. New
technologies mainly refer to how Internet is changing the way of doing business
and facilitating exchanges by businesses. In this context, we will try to
answer questions such as, are the fairs still an effective instrument to
communicate the commercial offer of the company (Molina, Castillo, & Diaz,
2008). It has decreased its power to establish new relationships in favor of
new technologies. We will try to give answers to these and other questions of
similar characteristics.
Relational Character of Fairs and E-marketing
If we notice the
relational nature of the fairs, we realize how fairs allow you to communicate
face-to-face with the customer that goes beyond the direct sale (Godar & O'Connor,
2001). It allows a more relaxed contact personal selling because both agents
found in an open space that also facilitates the interaction with other
suppliers and claimants simultaneously (Munuera & Ruiz, 1993). However,
fairs have a short duration and a very seasonal nature, showing an impact on
its level of impact on customers. Unlike the fairs, using e-marketing
techniques operators already do not interact intermittently on a particular
geographic market, they do so through a globalized and continuous flow
(Rodriguez, 2002).
In addition,
through the Internet and other electronic media, companies have access to a
greater number of suppliers, from anywhere in the world. In addition, as pointed
out by Mummalaneni (2005), for the visitor, it is much faster the product
information: features, prices, delivery times and terms of payment, among
others. However, the social nature enjoyed in fairs cannot change to the
digital market that makes it harder to encourage the interdependencies between
buyers and sellers, exhibitors and visitors. On the other hand, we can find a
common trait of the fairs and electronic marketing in the need to capture the
attention of the public in a previous phase. Thus, as he Miller (2003) pointed out
fairs require the use of other means of communication to ensure the attendance
of a larger target audience. Similarly, e-marketing requires other trade
instruments to ensure the visit to the web site (Coupey, 2001) and will be even
greater dependence on other media when the penetration of information
technologies and the communication spasm in that market is reduced, as our
contact with the Internet is more limited and the commercial offer available
through this means they therefore unknown.
As regards to the
relationship of the offering firm with other competing events, we observe that
fairs and e marketing allow visitors to compare the competitive offering
available (Munuera, 1995). However, there are important differences that need
to be too calculated. Fairs have an advantage over the e- promotion, it is, the
easily set agreements with rival companies. Obviously, as shown by Gopalakrishna
and Williams (1992), vertical fairs focused on a sector could facilitate the
establishment of these trade agreements between competing actions. Contrasting
e marketing fairs do not offer this possibility, or rather, are more
complicated to implement. This is because of the the intrinsic insecurity of
electronic media (Hanson, 2000), which create distrust among the companies
competing on the appropriateness of sharing information because it could filter
to other competing tasks.
Additional significant point, directed out by
Blythe (2002), is professional visitors; attending exhibitions contribute to
their purchase decision, but they also have other objectives. Additional goals
for visiting fairs are, (a) the opportunity to establish and maintain contacts
with other companies, (b) other products and information technology, (c) search
and compare new suppliers, and (d) access to new ideas of development of new
products (Munuera & Ruiz, 1999). Altogether are possible via e marketing.
Promotional capacity of the fairs and electronic marketing from another point
of view is that there are numerous advantages shared by fairs and e marketing
to promote the supply of products. Both tools have the ability to accelerate
the sale of products thanks to their skills to communicate the virtues of
products (Calvo & Reinares, 2001) and demonstrate their functioning. In
consequence, the ability of the fairs is no doubt for displaying complex
computers and resolve doubts on-site. However, is true that electronic
marketing suffers from a major limitation since it requires specific expertise
by clients to interact with the environment (Read & Read, 2004). In
addition, from the point of view of demand, both fairs and e-marketing offer
advantages to the customer when planning the acquisition of new products.
One of the main
advantages of both promotional tools resides in the convenience when it comes
to consult information about the procurement of products or services, it is
possible to know the characteristics of the products and compare with the
competition. However, trade fairs have a fundamental advantage over e-marketing
tools. Fairs allow customers to test and handling products in situ in order to
know their features and applications, clarifying doubts immediately. On the
other hand, e marketing presents a significant disadvantage, despite advances
in this field still cannot offer handling products physically This brings with
it the introduction of new products is complicated in the digital market,
despite the attraction that can generate its promotion through this medium
(Rao, 2007).
Comparing Fairs with other Marketing Tools
Fairs have been a
tool of unquestionable value to drive a company commercial offer; its activity
has slowed at a moderate pace. Thus, according to a study conducted over 250
members of the Association of American Marketing Professional Business
Marketing Association Survey (2003). The study noted that was invested 18.6% of
the trade marketing budget to support the sales of its products. The reality is
that this percentage is the highest of all promotional actions considered, for
example, investment in specialized press with 13.8% of the budget, and investment
on Internet and other electronic media 13.5%, highlights the importance granted
by these managers to trade fairs. However, trade fairs are one of the tools
with less business efficiency, because its impact cost is very high in relation
with other marketing instruments. Far ahead, we are going to discuss
peculiarities on the efficiency and effectiveness of the trade fairs analyzing
their costs of implementation. It is important to be aware that not all forms
of trade fairs are helpfulness. Therefore, it is vital to respond to other
types of indicators in terms of profitability of the investment or subjective
opinion of managers to assess if the fairs remain its validity in the current
business reality
According to a
study carried out by the Association of professional American, trade fairs,
vertical and horizontal fairs are, by more than 50% of the interviewees, such
as those that provide a greater return on investment. This position of
leadership with respect to other trade fairs is also clear when considering the
subjective evaluation of most experienced marketing managers. Thus according to
this survey, vertical and horizontal fairs are valued 56% and 40% respectively among
managers, with the activities that produce the best economic results remain as
the most interesting mode. The last in the list it holds corporate events
private because of their limited influence on other economic agents.
Corresponding to a
recent study on the profitability of the actions of marketing (“Marketing News,”
2006), the fairs were valued by employers above other promotional tools. The
same study, prepared on the basis of the opinion of 700 executives from
marketing of United States, Europe, and Asia, reflected that the trade fair
activity is the tool to greater profitability offered nowadays, displacing
other instruments of promotion, such as trademark policies or the direction of
sales tools that led this list in the past. In fact, according to this survey,
96% of managers consulted used fairs as a key element in their marketing
actions and 93% of them stated that the importance of the fairs increases
continuously every year. However, these data validate to assess the suitability
of the fairs in North America. For this reason, we will study the economic
reality of the fairs by geographical area. Thus, we see how the supremacy of
the fairs over other marketing tools is not only superior on global terms, but
that same thing happens also to analyze each of the geographic areas studied
separately. However, it is in Asia where we see that 32% of respondents valued
the fairs as the element that offered greater profitability in the promotion
decisions, rather far from the figures provided by the United States and
Europe. These data are consistent with what expressed Godard and O'Connor (2001)
that industrial buyers prefer the fairs to other tools of commercial
communication such as print advertising to make their business decisions.
Another
significant fact is that e-marketing is considered as a fundamental tool for marketing
managers in areas such United States and Europe, in which 17% and 12%
respectively of respondents claimed to be the instrument with greater
profitability; in the Asiatic continent, figure drop to 5% and is considered
the last in terms of profitability. One possible explanation that for this
result we can find is deficient infrastructure that the economies of these
countries have, which a limited access to electronic promotion practices.
However, the differences between geographical areas also can obey to the
characteristics of each marketing instrument.
Marketing Fairs via Internet
As we considered at
the introduction, the basic purpose of this study is to compare trade fairs
with the e commerce. While e commerce, also known as "cyber-marketing",
electronic sales, or Internet marketing, the phrase e commerce, has had a
greater acceptance in the economic world. E commerce is defined as, “new
commercial way using the technologies of the information and communications or
ICT;” allowing customers to perform the query, selection, and acquisition of a
distributor thru a terminal in real time, and from home (Rodriguez, 2002). Therefore,
two basic characteristics define this alternative marketing channel. First, the
buyer has control over the information accessed and the time devoted to the
purchase. Second, the user transmits the purchase decision through a
communications network. This last point is the best Internet communications
network because it facilitates the expansion of electronic commerce around the
world. In fact, the rapid penetration of the Internet at all levels is causing
important changes in the functioning of the markets to alter the way to
communicate and interact between the various participants, in the case of
companies, suppliers, distributors, or customers, to name a few of them.
Currently, the
Internet has more than two billion users worldwide, according to statistical
data provided by, "Exporting success" on their website Www.exitoexportador.com.
(2013). That is, almost the 32.7% of the world's population work through this
network of information and communication. As you can see, the growth that the
Internet has experienced in the last seven years has been truly spectacular. In
particular, the figures speak of increases above 100% in most countries, even
to reach 643% for idle East figures. However, these data can lead to deception,
since most of the users are concentrated in the three major commercial areas
worldwide, such as America, Asia, and Europe with more than 971 million users,
representing nearly 85% of consumers. The advance of Internet and other
electronic media such as cell phone, has favored the emergence of new business
models, called "digital market" or "digital economy", which
endanger the survival of the most traditional (Gupta, 2004), to completely
transform the relationship between economic operators.
We can deduce that
the implementation of the information technology and communications (ICT) in
the major world economies is a reality, reaching figures close to the 800 millions
of euros in Europe and North America, rounding the quantity of 300 million in
Japan. More surprising is that the rates of variation are between 12% and 15%
in more developed economies, but 41% in the rest of the world. This is, in some
economies playing a key role for economic growth. In the environment of this
research, looking at how the Internet marketing, thanks to the development of
this digital economy, supposed an interesting alternative to the trade fairs,
because it allows to effectively combine elements of the process of buying and
selling with the elements of the traditional commercial communication. Both
tools facilitate the sale and to transmit valuable information for future
operations.
We looked at the
revenue information posted by e-commerce internationally; and everything
presage that e marketing is planting face to other promotion instruments. In consequence,
we consider that in North America and Europe e-commerce, the commerce between
companies and individuals, or "B2C", and its acronym is "Business
to Customers" reached in the year 2006 $151 and $133 millions of American currency,
respectively. At the Asia-Pacific area, for the same period it reached $51
million, but it is surprising that the growth experienced in the Asia-Pacific area
touched 650%, compared to the period between the periods of the years since 2000
to 2006. Although these figures might give the impression to be high, are even
more in the case of trade between companies or B2B, for its acronym
"Business to Business,” where the income reached $3 trillion dollars in
2005 only in the United States, and $0.9 trillion in Europe (Emarketer.com,
2007). Although these data obtained in business between companies and consumers,
appear as surprising, as defending (Innkeeper & Garmendia, 2004).
Virtual Fairs
In recent years,
there have appeared some initiatives carried out to try to get simultaneous
benefits of fairs and new technologies. In particular, Internet has been the
foundation to become a fair because the enclosure, in other words, has
"Virtual space" and has tools to perform a good marketing. Along
these lines, virtual fairs take advantage of correlations between both tools
overcoming the limitations presented separately. A virtual fair aims for trying
to play a fair but all through the elements that has Internet. It is a new form
e-fairs do not substitute the traditional but relatively complement them
overcoming their limitations. In fact, the trend through having traditional
fairs associated with virtual fairs. One of the biggest advantages of the
virtual fairs over traditional fairs is its ability to eliminate the
disadvantages of their limited duration in time and geographical space. That
is, virtual fairs are open all year round, and allow visitors to meet the
exhibitors before the traditional physical fair. Fairs online helps visitors to
plan their visit to the physical event, which has previously been able to
navigate through the different booths and if we want we can, contact exhibitors
before attending the event. By the other side exhibitor has the additional advantage
of secure an interview with the visitor, better optimize the details, such as
the physical fair face time, and plan the schedule of interviews, among others.
Also for the fair organizers is an improvement in the promotion of the event by
multiplying the possibilities of it dissemination. An example that a fair web
allows we to share the same additional activities, such as cultural shows in the
city in which the fair is held, so that visitors have a more advance
information prior to attending the event. All this assumes that the image of
the fair extends in time and its effects are visible by it different
participants. As well is very important to emphasize that the cost of a virtual
fair, such as, mounting, maintenance of the stands, displacement of commercial
and booklet printing is much smaller than the traditional one. This is because
expenses are mainly limited to the recruitment of staff with experience in the
sector of information technologies and communications, or "TIC" that
ensures a professional virtual fair and impact. In short, all the above exposed,
makes us to think in what manner trade fairs are a traditional, simple, and an
extremely appreciated instrument by a large target audience.
It is necessary to
pay special attention to the costs of launching each one of the two tools. One
of the major disadvantages of the fairs is it is their high cost. For this
reason, if we examine at the cost impact of the fairs over other channels of
communication, we can perceive how one of the highest is. Thus, in terms of
efficiency, fairs are an important weakness with other commercial tools. From
the analysis of the contributions in this field, we can see some indicators are
looking for exhibition ROI or return on investment, and cost, by contact or
fee. However, as defended by other scholars (Ling-Yee, 2006), one of the most
important indicators to assess the effectiveness of a fair go by the number of
visitors who have been going to, and the relations established between the
exhibitor and visitor.
In any case, how
to measure results will depend largely on the objectives. Savings involving
electronic marketing versus other commercial techniques such as the fairs are
unquestionable. In fact, this has favored that many companies were take part in
the virtual world becoming an alternative commercial channel (Standifird,
2001). In this way, the organizations have succeeded in reducing its physical
presence in offices and other facilities, which has resulted in a significant
savings in costs and marketing budgets. In addition, the lower cost of
opportunity offered by the digital market for the customer when purchasing a
product or service because of the savings in time and travel, among others is
clear.
However, for the
correct development of the e marketing in a company, it is necessary experts in
information technology. This is a limitation added and associated costs to
consider, that it is obviously not present in the development of the trade
fair. Levels of penetration from the point of view of the e-marketing offer, we
could precise that his continued presence in the time and access to a global
market, are beyond any other marketing tool and in particular fairs (Rodriguez,
2002). However, the fairs have the unattainable capability of transmitting an
image for the exhibiting company as any other means of communication. On the
contrary, from the point of view of demand, electronic marketing does not have
the typical problems of the agenda of those who suffer the fairs, which are
limited to specific geographical areas, dates, and other restrictions. In this
regard, as they point (Berne & Garcia, 2007), the abundance of fairs on the
international scene further increases the difficulty of the exhibitors when
choosing the most suitable for your company event. Another noteworthy aspect is
the ability of the fairs has a contact person to assist in the process of
decision of purchase, something hardly moved into the realm of the digital
market.
We might conclude that
fairs remain as an instrument of unquestionable significance for companies. According
to Stevens (2005), there are five major scenarios evidenced at the trade fairs:
(a) promote products to a professional audience, (b) retain and loyalty to
current customers, (c) promote cross-selling of products, (d) know the reality
of business and the competitive position of the exhibitor from the rest, and (e)
encourage the introduction of new products and new markets. Additionally consulted
studies make us deduce that bigger clients are preferably to be treated at
fairs while e-marketing tends to be more used to manage small accounts or to
keep informed on the latest advances and the company launches customer. Secondly,
both e marketing and trade fairs have specific characteristics that reflect its
suitability with respect the other, depending on the promotion objectives depending
on the moment and the situation. Fairs are incomparable instruments for
establishing business relations with other companies or clients, despite its
high cost; e marketing, instead, less cost to the company obtaining greater
penetration not sensitive to seasonality you have fairs. In fact, according to
a report by Yankelovixh/Harris Interactive in 2001 (as in Stevens, 2005), the
fairs were valued by employers over other tools such as e-commerce marketing.
The study stated that 64% of those attending to the fairs would recommend a
product promoted in this event, compared to 50%, which would only do so after
visiting a web page. As a result, the study also follows that commercial
instruments, trade fairs, and electronic marketing, are complementary and not
alternative tools that enhances the unquestionable validity of the fairs in the
era of new technologies of information and communications. All this implies
adopting a multidisciplinary vision to the fairs, always, whereas the
correlative affects that might achieve in comparison to other tools of
marketing (Zikmund & D'Amico, 2001). As we have seen, the technological
development has allowed exploiting complementarities between trade fairs and e
marketing. Thus emerged the virtual fairs that have managed to combine the
virtues of trade fairs and electronic marketing and overcome its limitations.
The future of the virtual fairs will probably progress around the virtual
worlds, in which companies and consumers are living in an alternate here and
now.
A clear example of
the development of these virtual worlds is found in “Life which today,” which already
has more than eight million members. Today, there are companies that already are
organizing advertising campaigns for real products “Second Life” whose cost is
determined by the number of times that these ads appear in the virtual
buildings or other visible elements of this "new world.” For example, a
brand of power could use the same formats and advertising media in “Second Life”
than in a real retailer. Some brands such Adidas, Mercedes-Benz, and the Reuter
Agency, have already begun to make events, presentations, seminars, press
conferences, and interviews. Other companies such IBM even have a specific
place for employees and customers that genuinely recreate the actual
facilities. Thus, everything seems to prophesy that the trade fairs could be
soon the alternative marketing channel
By now, we have
seen many reports on how small businesses can use the Internet for business
development. In general, these reports focus on how small businesses can set up
Web pages for advertising and marketing, sharing information with customers,
distributing software and documents, and receiving customer responses. Others
also mention the use of Usenet newsgroups and e-mail lists for expertise
exchange and indirect advertising. However, not many are reporting empirical
studies on how much benefit small businesses actually derive from the Internet
and in what way. Questions about what small businesses are using the Internet,
what is driving them to use the technology, and how business relationships are
being supported by the use of Internet are still lacking. In this paper, we
report on the results of a study of small business use of the Internet both in
Australia and in the United Kingdom. Our intention is to present evidence on
the status of Internet use among small businesses and to provide some answers
to the above questions. We hope that the findings are of interest to both the
information technology (IT) and the business communities that engage in small
business research. Human communication is the main usage although many small
businesses started using the Internet believing its value to be in advertising
and marketing. Many small businesses do not have quantifiable data showing they
have gained competitive advantage and have based their belief of having done so
on perceived benefits. However, all feel despite the lack of immediate direct
financial returns from using the Internet, they will not disconnect their
Internet services as long as they can afford to pay for them. The Internet has
been helpful to develop and support business relationships between business
partners. How much the Internet is used depends on the different stages of the
development business relationship.
No comments:
Post a Comment