Event Management and Marketing

This article will define and discuss event management and marketing within the diverse hospitality industry. Events, classified by size and type, and the structure of participating stakeholders within events, including the importance of the integration of basic marketing principles, will create an overview with a stylistic approach, blending events and the importance of marketing within them.

Definition and Overview

Events can be defined as one off, big budget occasions. They can be once in a lifetime events such as weddings, or more common functions such as book launches or Christmas parties. Events require long, careful, intensive planning and they generally only take place once. Event managers are solely responsible for the smooth running of the event and there is a lot of safety and financial risk involved.

Event management and hospitality are both hugely competitive growth industries. Theorists suggest that hospitality comprises many input industries. Key among them are event management, and under the wider umbrella, marketing, which gives event managers a competitive edge. This is directly related to Reichhelds Loyalty Effect (Tepeci, 1999, p.223). Event managers need to adopt the theory that is it far more costly and time consuming to gain new customers than it is to retain old ones. Event managers need to have an attractive point of difference and focus on retaining repeat, loyal customers so as to increase profits and reduce costs.

MICE is an anagram for Meetings, Incentives, Conferences and Exhibitions. This is a huge growth sector in the events industry and according to McCabe (2000), it provides both a “high delegate spend and a high yield.” (McCabe, 2000, p.38). The MICE sector is now becoming very popular among graduate students, says Lawrence (2000) and many tertiary institutes are providing courses in MICE and events management, for example the Events Diploma at AUT. This new emerging growth area has been recognised by the university and the New Zealand Government.

As an industry, MICE generates $82.8 billion per year in income. (Tourism Research 2007). Regions in New Zealand such as Rotorua and Queenstown attract hundreds of people each year for conferences and meetings. It is evident that the MICE industry generates a lot of revenue for the country by bringing people to New Zealand from overseas. The MICE industry is highly lucrative and is considered to be at the blue chip end of the tourism industry. (Lawrence, 2000, p.204)

Event Structure, Classification and Operation

The structure of events and their operation varies in this diverse industry. Each event is a one off, unique occurrence for the client, therefore being a very important occasion, which rests on the shoulders of the event planner. The client is known as the ‘primary stakeholder’ and their wants, needs and budget are all variable. From the wants, needs and budget of the client; a “needs analysis” (L.Boone, D. Kurtz, 2004, p62) is conducted by the event planner. The two will then engage in a series of meetings and conversations to organise the event, and from that, a finalised event will emerge. This event will be set out in a written contract or memorandum of understanding. This works to protect both the client and the event manager, and to out rule any misunderstandings concerning the formalities of the event. These written contracts may vary but will be universal in the underlying structure. The details of the final contract, including any changes, are then converted into a run sheet, detailing the list of occurrences for the event. This is presented in a formal way for the event co ordinator or manager to run the event. The run sheet reflects the base contract and it is a tabulated version of the plan, in hard copy.

Events are classified by size and type. Size includes hallmark events, mega events, major events and minor events. Hallmark events are designed to promote a specific region or tourist destination. A New Zealand example of this is the appeal the Viaduct Harbour gained during the Americas Cup in 2003. Mega events are the largest events of all. These events will generally have a much longer time span than other events, and can go on for several weeks. According to the New Zealand Tourism Research Institute; “New Zealand is about to enter an unprecedented phase of mega-event activity”. (Troels Troelsen, 2007). Troelsen states that New Zealand is hosting the Rugby World Cup in 2011, which will be a major factor for “increased tourism, media coverage, and economic impact.” (Allen, O’Toole, McDonald, Harris, 2003, p.5). According to Allen et al. major events are classified as “attracting significant local interest and large numbers of participants”. In April 2007, the Red Hot Chili Peppers came to Auckland for two shows, which sold out in minutes, before the tickets had even been printed. (View Auckland 2007). These concerts attracted fans from all over the country and sold over twenty thousand tickets for the two shows. Minor events are “where most event managers gain their experience.” (Allen et al. 2003, p7). Minor events are more common, such as product launches, for example the launch of the new X5 BMW at Team McMillan, Auckland in early May 2007.

Events can also be classified by type. These include sporting, special events, entertainment, art and cultural, commercial, marketing and promotional events, and meetings conventions and exhibitions. Sporting events are those that attract sportsmen and women from the highest levels from all over the world, like the Olympic Games. (Van Der Wagen 2001, p.7). For example the ASB Classic and Heineken Open, which has put Auckland City on the map as a serious participant in international sporting tournaments. (Auckland City Council 2007). Special events are classified as being unique and, for the client, “an opportunity for a leisure, social or cultural experience outside the normal range of choices or beyond everyday experience.“ (Getz, 1997, p.5). Special events are those such as weddings. Festivals, including entertainment, cultural and arts, are usually community events and can attract any number of people from 50 to 500,000. In 2005, the Auckland Viaduct Harbour hosted the Dragon Boat Festival over a weekend in March. This attracted thousands from schools and corporates alike. (Auckland City Council 2007). Commercial, marketing and promotional events tend to have high budgets and high profiles. (Allen et al, 2003, p.9). Allen et al. explains that success is vital because the company wants to market their product to the consumer and differentiate it from its competitors. The largest sector is the MICE industry or the “blue chip” of the tourism industry. (Lawrence, 2000, p.204). In 2005 alone, over six thousand people came to New Zealand from overseas for a conference or convention. (Tourism Research 2007). It is obvious that the MICE industry is fast becoming a very dominating part of the hospitality sector. Hotels are in a period of decline concerning market share, where they are having difficulty raising theirs. (Tepeci, 1999, p223). This contrasts directly with the MICE industry, which is ever expanding. This shows how two sectors of the same industry are can be at opposite ends of the spectrum.

Relationship Between Event Managers and Stakeholders

A stakeholder is classified as anyone who holds interest in the event. They contribute to the success of an event and are vital components at every function. They are participating in the event directly or indirectly, either by supplying goods and services, or marketing the event. (Refer figure 1.) Obviously the primary stakeholder is the client, but the number of stakeholder types vary because of the diverse nature of the events industry. Common examples include the caterers, the florist, bar staff, local city council, security companies, and the band. (Allen et al. 2003, p12). An event manager relies on the assistance of these stakeholders for the planning, the set up, and the running of the event. Due to the diversity inherent within each event, stakeholders are constantly changing, but the relationship they hold with the event co ordinator is critical and should represent a win-win mentality for both groups. (Allen et al. 2003, p12). They rely on each other for business and success.

Primary Functional Areas of Events

The mentality of the relationship that stakeholders have with the event planner embraces direct benefits for all, especially the client. When selecting stakeholders; the event manager should be cognisant of the ability of stakeholders to meet and exceed not only their expectations, but those of the client and the guests at the event. Often well established event companies will have a huge stakeholder base and they will work with those same companies continually, having built a reputable relationship with them, where both parties benefit. For example special events such as weddings often require the same stakeholder base, such as the celebrant, the florist, the caterer, the venue. This is why an important relationship between the stakeholders and the event planner is essential and beneficial. The event company can use these stakeholder companies for each wedding event, thus saving time and money. The relationship between the event planner and the primary stakeholder; the client is vital. This is supported in Reichhelds Loyalty Effect (Tepeci, 1999, p223). “The advantages of customer loyalty are long term and cumulative. Businesses have to invest money to attract new customers, but for loyal customers, these costs are eliminated or minimalised.” (Tepeci, 1999, p.224).

Marketing

Event management and hospitality are highly competitive, growth industries. Marketing can give event managers a competitive edge or strategic advantage over competitors. “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives.” (American Marketing Association, 1985, p.2). The principle element of marketing relates to the “Marketing Mix” (Dan and Dan, 2004, p19), a well known prototype in marketing and it’s operations. The mix includes the four “P’s”:
Product
Price
Promotion
People
These can be controlled by the marketing practitioner; the event manager, through their organisational efforts. The product is the tangible and intangible elements of the event, including the stakeholders, for example the food as a tangible element, and the service of the wait staff as an intangible element. Price is the cost of the event for the client. It covers elements such as wholesale discounts and seasonal pricing. Promotion includes brands, which introduce stability into businesses. (Tepeci, 1999, p.223). A well recognised brand will offer security to the client and minimalise risk. By providing a big brand to the client the event manager is offering credibility and for this the client is usually prepared to pay a premium. People represent the role of the consumer and the event manager, including anyone else who contributes to the event, such as the stakeholders. It is vital that event managers know about demographics and the clients view of the basic “marketing principles” (Dan et al. 2004. p.19) so they can make broad generalised claims as to what suits the consumer. According to Reichheld (Allen et al, Reichheld 1996) it costs approximately five times the amount to gain a new customer as it does to retain a previous one. A study conducted by McDonalds found that it costs them nearly nine American dollars to attract each new customer. That customer must then visit five and a half times before McDonalds gains from their business. This supports Reichhelds Loyalty theory and in an ever expanding and competitive industry such as events management, customer loyalty is essential. The event manager must provide a point of difference through marketing strategies to give themselves a competitive advantage. It is in the interest of an event manager to also build up brand awareness, which is good for customers and positive for the events business. (Tepeci, 1999, p.223).


The events industry, along with the MICE sector are both growing and developing rapidly. There are many different sizes and classifications of events, which differ from customer to customer. Event managers must be highly skilled and have knowledge of demographics and different customer types so they can provide the best customer service and retain those customers. Customer retention has become very important in todays society and as a result, the need to build strong relationships with customers has arisen. Relationships need to be formed between event managers and stakeholders because it is beneficial for all involved. The relationships are win-win. The loyalty effect and marketing principles, coupled with demographic and target market profile insights enable a professional event manager to develop a competitive advantage over other industry players.



 

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