For the companies who exhibit, having a presence at an exhibition seldom comes cheap. The stand - or 'booth' in the USA - has to be hired or bought and set up. It has to be manned by staff, whose travel and accommodation costs have to be paid. Nevertheless, the advantages to exhibitors are clearly considered to be worth the investment. Klein (1999; p. 1) describes those advantages:
In many industries, the trade show has become a must-seize market opportunity. It's a time to meet prospective customers, get valuable feedback on your product or service, and close sales. A trade show enables you to develop trust and rapport with your customers. Once you have that, you can leave voice-mails and e-mails with a face behind them.
Despite the outlay of time and money, a trade show is still a very economical way to build your business. A national survey done by Data & Strategies Group Inc. showed that closing a sale with an exhibition lead costs an average of $625 and takes 1.3 follow-up calls. Compare that with the average $1,117 cost and 3.7 phone calls needed to close a sale otherwise. And... you see immediately what customers think of your product.
It is this cost-effectiveness and the opportunity that exhibitions give companies [o actually meet their customers or potential customers face to face that explain partly the ongoing appeal of trade fairs as a marketing and sales technique. But there are other advantages. Beyond actual sales or generating potential leads, these events also provide companies with the opportunity to increase their visibility in the market, to improve their image, and to gain immediate feedback on new products or services.
Further reasons for companies spending so much on attending these events year after year are linked to the fact that trade fairs are places where competing companies and organisations can also meet each other face to face. This means that exhibitions give exhibitors an ideal opportunity to analyse the competition, which they often do by visiting each others' stands as 'mystery shoppers', to take note of new products, staff knowledge and behaviour, etc.
Secondly, as Klein (1999; p.l) points out, exhibitors tempted to cut costs by staying away from these events do so at their own risk: 'If you think you can skip the whole affair because all your deals are done elsewhere, think again. Trade shows become a gossipy society unto themselves, where your competitors might float rumours in your absence that your company is ready to bite the dust.' This suggests that simply by being there, companies are able to defend themselves against rumours of their being in such financially dire straights that they cannot afford to attend - les absents ont tonjours tort !
Advantages to destinations
Whatever the reasons behind the popularity of exhibitions, the economic benefits generated by these events for the places where they take place are considerable. Many of these benefits arise from the spending of the exhibition organisers, visitors and exhibitors on'*avel, accommodation, recreation and entertainment at the destination. National or international exhibitions, in particular, may have considerable impact on the host economy through the number of visitors and exhibitors staying in serviced accommodation for several days. As we also saw in the case of travel for conferences and other types of meetings (Chapter 3), the ancillary spending on this form of business tourism brings benefits to a wide range of suppliers operating at (he destination. In addition, cities often use the hosting of large international exhibitions as a way of creating for themselves the image of a centre of industrial or commercial expertise.
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Contemporary trade fairs
Trade fairs often involve a considerable marketing investment by participating companies. Costs include space rental, design and construction of trade show displays, telecommunications and networking, travel, accommodations, and promotional literature and items to give to attendees. In addition, costs are incurred at the show for services such as electrical, booth cleaning, internet services, and drayage (also known as material handling). Consequently, cities often promote trade shows as a means of economic development.
Exhibitors attending the event are required to use an exhibitor manual or online exhibitor manual to order their required services and complete any necessary paperwork such as health and safety declarations. An increasing number of trade fairs are happening online, and these events are called virtual tradeshows. They are increasing in popularity due to their relatively low cost and because there is no need to travel whether you are attending or exhibiting.