Academic journal article
By Palumbo, Fred; O'Hara, Brad; Herbig, Paul
Academy of Marketing Studies Journal , Vol. 2, No. 2
TRADE SHOWS/FAIRS--A REVIEW
Trade shows, trade fairs, expositions, scientific/technical conferences, conventions. The name may vary but the basic function of the activity represents a major industry marketing event. They are "events that bring together, in a single location, a group of suppliers, distributors and related services who set up physical exhibits of their products and services from a given industry or discipline" (Black 1986). In 1988 in the United States alone, over 100,000 firms exhibited at some 11,000 business trade shows and spent over $9 billion. This must be compared to 1982's 91,000 firms which exhibited at some 8000 trade shows at cost of $7 billion. In ten year period 1980-1990, the number of trade shows went from 4500 to 10000. Show/fair attendance has reached at least 50 million and utilize the available 53 million square feet of space several times over every year. More than half of all industrial shows sold all available exhibit space--2 million square feet could not be accommodated. Demand for space is forecast to more than double over the next decade. Comdex 1990 with 118,000 attendees from over 100 countries and 1850 companies, 2.2 Million square feet of exhibit space with over 1900 accredited press from throughout the world in attendance versus Hanover Fair with over 400,000 attendees and nearly 5000 companies. The trade show medium plays much larger role in Europe and other foreign countries than in the United States. For example, average attendance at the top 100 events in Europe 77,000 visitors vs. about 22,000 in the U.S. (Trade Show Bureau Newsletter, June 1992).
Trade shows accounted for over 22-25% of the typical U.S. Business Market Promotional budget, second only to personal selling activity and ahead of print advertising and direct mail. American firms spend annually approximately $9 billion for exhibition travel and labor costs and $12 billion for exhibit costs (1984 U.S. only). Trade Show Bureau estimates that the trade show industry itself generates $50 billion a year. Industry estimates indicate that this figure is growing by almost $1 billion a year during late eighties. Growth of exhibit space has averaged nearly fifteen percent annually during the seventies, slowing down to a smaller but sustainable 7-8 percent during the eighties. However, the 1991 recession cut growth to 3 to 4%. According to Trade Show Week, the industry newsletter, number firms exhibiting at the 200 largest trade shows grew 7.7% between 1986 and 1987. During the seventies the number of new exhibitors increased at an average annual increase of 3-4% while in the eighties it has exceeded 7% annually (Mee, 1988). Show attendance at the major events increased at an average of 3% per year during the seventies, rising to more than 6% during the eighties. At the same time, the annual company budget allocation for trade show participation increased from $73,000 in 1978 to $212,000 by 1987.
ADVANTAGES OF TRADE EVENTS
Trade shows rank second behind only personal selling in influencing buying decisions of industrial purchases (Parasuraman 1981; O'Hara 1991). Nearly 44% of trade show visitors travel more than 400 miles to shows and spend more than $300 per person in transportation costs alone to attend the event. The average delegate spends nearly $1000 per visit. While 85% of all attendees have a key impact on the buying decision. The cost per contact at a show is one third that of a personal sales call (Trade Show Bureau 1986a). In 1988, average total costs per visitor (including space rental, construction costs, freight, booth personal travel, living expenses, and salaries) was $133, almost one third the cost of a personal sales call. It takes approximately 0.8 sales calls on average to close a sale initiated by a trade show lead while most estimates place the number required in the field to be five. Overall, the cost differential is about 3.5 to 1 in favor of trade shows.
Additional advantages of using a trade show include: promotional message is delivered to a large number of qualified interested people (86% of all show attendees represent a buying influence, are interested in a specific exhibited product or service and have not been called on by a sales rep recently); introduction of new products possible to large number of prospects; potential customers may be discovered; enhanced goodwill; free company publicity is possible; and gathering competitive information. …