The role of trade fairs in industrial marketing: a research on defence industry trade fairs

Year 2014, Volume: 1 Issue: 3, 156 - 172, 01.09.2014

Ruziye Cop Rifat Tekin Kara

Abstract

The  purpose  of  this  paper  is  to  explore  the  attitudes  towards  trade  fairs  that  are  the  most  important  marketing  tool  influencing  buying  decisions  in  industrial  markets  and  to  search  whether  or  not  these  attitudes  are  different  from  those  in  sub  sectors.    Since  trade  fairs  are   primary,   effective   and   common   marketing   activities   in   defence   industries,   this  industry   has   been   selected   as   a   research   area.   In   this   research   paper,   50   of   the   firms  which  operate  in  defence  industry  are  treated  as  population.    A  questionnaire  containing  51   questions   was   conducted   on   50   of   the   firms’   workers   in   business   development  department/section   managers/senior   managers   and   32   people   responded   to   the  questionnaire.   5   point   likert   scale   was   used.   The   respondents   were   asked   to   indicate  their  degree  of  agreement  with  the  statements  measured  by  a  five-­‐point  Likert  scale  (1  =  strongly  disagree  and  5  =  strongly  agree).  And  the  mean  values  of  each  response  were  calculated.  Ranking  means  in  a  descending  manner,  the  order  of  importance  was  listed  according  to  responses  under  each  title.  Additionally,  a  frequency  analysis  and  percent  of  frequency   were   figured   out.       Kruskal   Wallis   Test   is   used   to   understand   whether  differences   in   sub   sectors’   answers   to   the   survey   questions   are   significant   or   not.  According  to  responses  to  the  questionnaire,  the  purpose  of  trade  fair  participation  is  to  gather  information  about  rivals  as  well  as  to  create  country  and  product  image.  Nearly  all  Respondents   (%97)   considered   trade   fairs   as   the   most   important   marketing   tool   in  defence   Industry.     It   seems   that   there   is   no   significant   difference   in   responses   of   four  sub-­‐sectors  in  defense  industry.  The  research  is  limited  to  the  defense  industry.  Due  to  the  nature  of  defence  industry,  getting  general  judgment  from  findings  can  cause  fallacy  for  the  other  sectors.  The  cost  of  trade  fairs  seems  as  the  most  important  problem,  thus  state  support  for  cost  reduction  is  of  importance  and  the  persistence  of  this  support  is  required.   Participation   decisions   in   the   defense   industry   fair   are   taken   based   on  intergovernmental   relations,   strategic   partnerships   and   the   country's   overall   interests  rather   than   rationality.   Studies   concerning   trade   fair   is   limited   in   Turkey.   Exhibitors’  points  of  view  related  with  trade  fairs  are  revealed  for  the  first  time  in  defence  industry  with  this  study.          This  article  is  expanded  version  of  the  paper  presented  at  the  13rd  National  Congress  of  Business  Administration.   Year:  2014        Volume:  1        Issue:  3  1.  INTRODUCTION    In   intense   competition   environment   in   national   and   international   industrial   markets,  companies  use  various  marketing  tools  and  techniques  to  be  successful.  Firms  operating  in  industrial   markets   use     trade   fair   as   the   second   most   important   promotional   factor  influencing   buying   decisions   of   industrial   purchases   after   personal   selling   (Yüksel   and  Voola  2010:  293).    Trade   fairs   are,   in   some   ways,   the   ultimate   example   of   marketing   excellence.   All   the  interested  parties,  be  they  buyers,  sellers,  students,  designers,  influencers  in  the  buying  decision,  or  users  of  products  are  represented  under  one  roof  at  one  time  Each  has  come  to  trade  in  some  ways-­‐  each  has  needs  to  fulfill,  and  is  prepared  to  spend  time,  money,  and  effort  to  fulfill  those  needs  (Blythe,  2010:60).    Communication  covers  the  process  of  exchanging  information  and  news  between  parties  and  trade  fairs  is  one  of  the  tools  of  communication  (Aycı,  2011:163).    Literature  on  the  subject  devotes  considerable  attention  to  defining  trade  shows.  In  many  cases,   the   term   “trades   show”   is   regarded   as   a   synonym   for   fairs,   trade   fairs   and  expositions.    Trade  fairs  are  defined  as  regularly  scheduled  events  at  which  manufacturers  display  their  products  and  take  orders  (Kirchgeorg,  Springer  and  Kästner  (2010:63).    Among   whole   promotional   tools,   fair   and   exhibitions   are   the   only   distinctive   tools   that  bring  buyers  and  sellers  together  by  providing  a  commercial  environment  (Tek,  1999:790).  Trade  shows  rank  second  behind  only  personal  selling  in  influencing  buying  decisions  of  industrial   purchases   (Palumbo,   fred   and   O’hara,   Brad   and   Herbig,   Paul,   1998).   Industrial  Trade   Fairs   are   generally   international   trade-­‐oriented   events   where   parties   that   make  large-­‐scale   purchases   and   sales   are   brought   together   rather   than   end   users   (Ecer   and  Canıtez,  2005:304).  Trade  shows  &  exhibitions  provided  a  forum  for  companies  to  display  and  demonstrate  their  products  to  potential  buyers  who  had  a  special  interest  in  buying  those  products.  (Situma,  2012:221).    Fairs   could   be   described   in   a   more   comprehensive   and   extensive   way   as   follows:   Fairs  represent   events   that   aim   to   present   and   transfer   technological   developments,  information,   and   innovation   regarding   tradable   goods   and   services   through   the  establishment   of   booths,   they   denote   events   whose   organizer,   name,   type,   location,  subject,   date,   and   duration   are   determined   in   advance,   that   are   organized   in   fields   that  suit   qualifications   for   establishing   and   improving   information   transfer,   cooperation,   and  future  commercial  relations,  and  that  look  out  for  the  interest  of  the  field,  sector,  and  the  society  (Aycı,  2011:161).    It  was  believed  that  exhibitions  or  trade  fairs  began  almost  600  years  before  the  birth  of  Christ.  While  no  precise  record  was  available,  the  book  of  Ezekiel  (in  the  Bible)  written  in  588  BC,  contained  many  references  to  merchants  trading  in  a  “multitude  of  the  kinds  of  riches  with  silver,  iron,  tin  and  lead”.  Ezekiel  also  talked  about  the  city  of  Tyre  which  was  an  important  center  of  trade  and  commerce.  There  was  also  a  close  connection  between  fairs   and   religious   celebrations   and   holy   days.   The   word   “Feria”   came   from   the   Latin  meaning   “holy   day”   and   the   term   was   still   commonly   used   to   describe   what   we   might  otherwise  refer  to  as  an  exhibition  or  trade  fair.  (Situma,  2012:221).  It  is  proposed  that  the  first   fair   that   is   closest   to   our   understanding   of   fairs   today   was   established   by   King  Dagobert  in  France  (Akmankuy,  2006:185).  Fairs  could  be  classified  as:  • Local,  regional,  national,  and  international,  according  to  the  audience  addressed,  • Global  and  authentic,  according  to  their  content  and  scope,  • Exhibitions,  trade  fairs,  and  specific  fairs,  according  to  their  activities.      Recently,  the  concept  of  virtual  fairs  has  emerged  with  the  development  of  information  technologies   and   electronic   commerce.   It   is   possible   to   classify   fairs   in   two   groups  according  to  the  environment  it  takes  place.    When  we  take  the  virtual  fair  concept  into  account,  it  is  also  possible  to  classify  fairs  as  virtual   and   actual   according   to   the   environment   they   take   place.   Virtual   fairs   are   online  business  platforms  where  companies  have  the  opportunity  to  present  their  products  and  services,  reach  target  groups,  and  that  provide  a  means  for  advertising  in  order  to  direct  customers  to  the  website  (Çavuşoğlu,  2006:92).  Geigenmüller  (2010:286)  defined  virtual  trade   fairs   as   web-­‐based   platforms   where   customers,   suppliers   and   distributors   can   get  together   virtually   at   any   time   and   from   any   place.   Attendees   can   visit   virtual   halls   and  booths   online   to   obtain   information   about   a   company’s   profile,   its   products   and   its  services,   and   interactions   between   exhibitors   and   visitors   take   place   entirely   in   a  multimediabased  environment  comprised  of  textual,  visual,  and  acoustical  elements.  In   the   past   years,   the   importance   of   fairs   has   increased   and   it   is   predicted   that   this  increasing   trend   will   continue   in   the   coming   years.   According   to   the   CEIR   index   report  issued  by  the  Center  for  Exhibition  Industry  Research  (CEIR)  the  fair  industry  displayed  a  growth   of   1.5   %   in   2012.   No   significant   growth   is   expected   for   2013;   however,   a  substantial   growth   is   foreseen   for   2014   and   2015.   In   the   long   run,   the   growth   will  accelerate  (Retrieved  June  25,  2013,  from  http://www.ceir.org/articles/detail/2013/2012-­‐CEIR-­‐Index-­‐Results-­‐Released  ).  Also  in  the  same  report,  in  2012,  the  fair  area,  number  of  fair  participants,  the  number  of  visitors,  and  actual  income  increased  by  1.2  %,  0.5%,  2.5%,  and  1.6%,  respectively.         With   the   development   of   technology   and   transport,   the   commercial   function   of   fairs  became   prominent.   Regional   and   international   relations   acquired   new   dimensions  through   fairs   and   at   the   same   time,   fairs   also   contributed   to   the   development   of   world  trade  (Akmankuy,  2006:186).    The  advantages  which  trade  shows  carry  over  other  promotion  methods,  both  for  visitors  and   exhibitors,   include   the   possibility   of   immediate   follow-­‐up,   no   interruption   of   other  activities   (as   compared   to   sales   calls),   the   opportunity   for   hands-­‐on   experience   of   the  exhibits  and  one-­‐to-­‐one  exposure  of  buyer  to  seller.  (Fowdar,  2004:44).      According  to  Kotler  and  Armstrong  (2011:487)  vendors  receive  many  benefits  from  trade  fairs,   such   as   opportunities   to   find   new   sales   leads,   contact   customers,   introduce   new  products,  meet  new  customers,  sell  more  to  present  customers,  and  educate  customers

Keywords

Fairs, trade  fairs, defence  industry, marketing  mix.