INTRODUCTION

Andrew, thanks for that introduction. I should perhaps add that when I worked for Computer Associates it was out of Geneva in Switzerland and for Micro Focus I re-located to Palo Alto, down the road. ... Thinking about working for companies in America led me to look at the entirely different role that trade shows play in Europe and US.

Let me put it this way, if I had a European client wishing to enter the American market then trade shows would probably be pivotal, but if it's the other way round, if it's an American client wishing to enter the European market then exhibitions generally play a lesser role in the marketing mix. We can talk about the reasons for these differences more fully during questions.

It's important I mention this because some American companies have exhibited in Europe and have been disappointed because they haven't done the business that they might expect to do at an American show.

And that's a shame because the European software market is worth over $70 billion and it's set to grow at around l0% percent per annum during 1996 to l998. We are used to buying American software. And we like buying American software.

So, what I'd like out of this session is to alert you to the different role that exhibitions and events have in the European marketing mix and indicate some of the problems that you might like to avoid and what solutions have worked.

HOW DO WE GO ABOUT SELECTING THE RIGHT EUROPEAN SHOW?

Because of the complexity of Europe there is no pan-European show and some people believe that this will never be possible. We can discuss the reasons for this in questions.

What I find works best is holding your own company seminar - which most of you already do. In addition, rather than letting each subsidiary or reseller try and put a presentation together I work with my clients to develop either a specific European presentation or adapt the existing American one ... always being careful to take input from local people in Europe. The benefit of these seminars is control, they are tightly focused, size is manageable, you have a qualified audience that you 'own' for the time of the event and they cost less than the trade shows.

Having a centralised presentation that is modified for local use means that resources are saved as you don't have people developing different and incompatible presentations in various countries, and the corporate image and standards are maintained.

For example, one communications company held a Financial Services seminar which cost $23,000, at Queen Elizabeth II Centre in London, and this brought sales of $l.5 million with 50 - 60% gross margin. Maybe he should be giving seminars on gross margins!

Watch costs, one client who holds a quarterly event which is paid for by attendees found that he saved $.5 million per annum by being choosy about which speakers he would pay, not outsourcing the video recording - using in house resources, and by asking speakers to standardise on the presentation equipment they used. Still produced a very professional conference but with half a million extra profit.

Company conferences are not just for customers. Hewlett-Packard recently ran a very successful 2-week road show with 3rd party vendors in Europe using key presenters from their European headquarters in Stuttgart and covered 10,000 miles with l7 destinations from Madrid in Spain to Warsaw in Poland. They achieved this tight schedule by doubling up on trucks and running the seminars concurrently.

These seminars are often organised under the aegis of hardware and software partners such as IBM, Oracle etc. Many of you may be asked by your resellers to support such events either by material or money and I would recommend that you give this serious consideration - particularly if there is evidence that they are handling the database well.

Of course, if you're Microsoft then you can actually charge your resellers. Microsoft's 'Start it Up' roll out was done in partnership with its biggest dealers in Britain. Involved 26 shows held in 30 days from Scotland to the South West of England. First was in London where Bill Gates made the key note address. And as it toured round, while Microsoft did the Windows sell the local distributor was able to push his training and support.

The good news is that these events are very straightforward to organise. And although I wouldn't always recommend that these events should replace shows they undoubtedly have in a number of cases, and with great success - particularly if a lot of effort is put into developing and maintaining the mailing list and then following up phoning. In this aspect of marketing there are few differences between America and Europe - as you know - it's down to hard work.

WHAT ARE THE COMPLEXITIES IN EUROPE?

When I talk about Europe I'm thinking about countries such as France, Germany, Britain, Holland, Belgium, Switzerland, Italy, and the Scandinavian countries. This makes up a complex continent. For example, there are 4 languages in Switzerland, 3 they share with neighbouring countries and one they invented for themselves. And there are different currencies.

None of these problems are insurmountable but we have to accept them, there are also cultural differences. The Image Management Conference has attempted to produce the ultimate pan-European show by holding it in different countries. It was held in Holland last time and this was excellent, it was very international. But this year it's being held in another country and everyone - except the people in that country - is very concerned that it will become too parochial, because of the way that people operate there.

IS CE-BIT A PAN-EUROPEAN SHOW?

CeBit comes closest to being a pan European show and with over 600,000 visitors with 6500 exhibitors from 66 countries it is THE major international showcase. Many visitors make an annual pilgrimage to Hannover because it's such an ideal way to see what is happening in European, American, Taiwanese and Japanese companies. SICOB in Paris and Systems in Germany are probably the next best European shows.

However, these are not the equivalent of a European Comdex so please don't see them as a universal panacea and they do need careful assessment.

It can be expensive. A $60 million Swedish manufacturing software company, reports that the style is very old fashioned ... "an old fashioned way of loosing money". And will not be re-booking. He also criticised the show as being too German in its approach. Too technical a sell.

For this reason, the European director of a US communications business cancelled because he calculated that he was spending half a million $ (that figure again) for what he called "a North German show".

• My experience is that even some Germans don't see CeBit as the great European, or even German solution - because it is SO international, the Germans find it too unfocused. Let me explain, if you were a German company selling in Germany you would not limit your exposure to CeBit, you would also exhibit in all the major federations. Because, for example, CeBit has very few attendees from Southern Germany.

• That's the reason some sales managers feel that Systems in Munich in the south is a better indigenous show for Germany and it has the benefit of attracting people from Northern Italy, Switzerland and France - areas where there is quite a lot of spending power.

• You probably saw the Wall Street Journal's coverage of CeBIT with Mauritius advertising itself as "Your right information-technology location". This may be very valid but with 6,000 exhibitors making similar claims you can see that messages can get lost.

• Also, attendance at CeBit is dropping, in l996 there were less attendees from other European countries at any time since l990. (There are reason for that which we can discuss in questions if anyone is interested)

But the main point is that trying to assess the value of an exhibition as a pan European solution is quite complicated.

If you do go to CeBit - and a lot of companies find it very successful - then look at booking direct or through an independent contractor such as Trade Fair Support Limited - rather than being part of the American pavilion because this could reduce your costs by 50% - 75%.

IS IT POSSIBLE TO CALCULATE RETURN ON INVESTMENT?

It's complicated, for example be wary of the Comdex brand once it leaves American shores. Comdex Singapore, for example, is good but Comdex UK was a failure and the word is that it lost $.5 million to $.75million. CA spent $l50,000 at Comdex UK and $20,000 on a more focused event, and immediately re-booked the latter. It's obviously easier to calculate the ROI for company events and niched shows. However, once you get into the larger - more generic shows then it is much more difficult to assess the ROI because of the soft factors. If you're only interested in image and positioning then the larger shows are fine so long as you don't expect to always do deals on the booth as you might in America. I should mention that this is changing. Jerry Kallman Snr. who takes US exhibitors to 40 European shows a year tells me that companies can be caught out with attendees increasingly coming to make final or preliminary decisions at shows like Systems in Germany. He points out that attendees can be very specific about delivery dates etc.

WHAT DO YOU RECOMMEND?

Personally, I think the emphasis should be on effectiveness rather than effect - on educating and persuading your audience rather than dazzling it.

What I do for my clients is to find those rare events where the organisers put a lot of effort into getting quality audiences along and recognise that top IT buyers don't like going to exhibitions, they don't have the time, they want to meet with high level people within the supplier organisation because they want to talk about strategies, they don't want yet another demo.

One organisation that has recognised this is the Richmond Group and what they do is to take the Oriana cruise ship for 3 days and fill it with highly qualified users - 460 high level IT directors from such companies as Levi Strauss, 3M, DHL, BMW - each with an average budget of $l8 million. And there are 70 supplier companies available to have a series of meetings with them over the three days. One IT director I spoke to, at Jaeger stores, was raving about the efficient scheduling of the meetings which means that he can speak to all the suppliers he wants to in 3 days and then return to a work schedule unbroken by supplier meetings.

The Richmond group is also replicating the formula in Italy and trying to break the stronghold of SMAU, and I believe they are planning to bring it to the US in l997.

But you have to seek out these jewels, probably with local help as they are not the norm.

Organisers are learning to listen to the exhibitors and visitors. And to give better value for money. Prices are increasingly bundled and Softworld a British specialist show, which is now over here, for HR, Accountancy and Supply Chain suppliers also includes a dedicated conference room which exhibitors use for ongoing seminars. They also run a master class in advance of the show and supply comprehensive information in advance for the visitors so that they can really maximise their time there. All of which helps suppliers move customers rapidly through the buying cycle from information collection to really understanding the product and its benefits.

DO NICHED SHOWS HAVE A ROLE?

Like the States, events and exhibitions are increasingly niched - HR, computers in manufacturing, banking. These can be far more effective than the generic national shows because there is greater control, they are tightly focused, size is manageable, a qualified audience. One client, a reseller for Intrix software in Sacramento, regularly gets sales of $l50,000 as a result of being at Clo-Tech the textiles show and Computers In Manufacturing at a cost of $l5,000 each.

ANDY GROVE RECENTLY SAID OF SHOWS 'I NEED MORE OF THESE, THEY DRIVE MY MARKETING'. WHAT DO YOU THINK ABOUT THE UNFORGIVING DEADLINE?

I'm always surprised that companies can find $.5 million for a trade show that is so transitory, but do not invest in a corporate presentation that can be used time and again for actually selling round the world on a daily basis. I guess it's the unforgiving deadline that makes trade shows so compelling - or maybe the trade show sales people are just very persuasive?

WHAT DO YOU FEEL ABOUT MIXING CUSTOMERS AND PROSPECTS AND PRESS?

I suspect that we all ask customers for help in selling in the same way, so I'll focus on the press :

One needs to pay attention to the press. Suggest that you never mix press and prospects and be careful with press and users.

One of the reasons that European shows don't have the buzz that American ones do is that despite our best endeavours - and with some glowing exceptions - most software is developed here and because you have access to R&D you are more able to show something brand new.

Once an announcement has been made at a show in the US then it will be covered by US press and, if it's important enough, by the European press. So it's no longer news. That's why the press don't attend European shows in hordes and our shows don't produce the same buzz. If an American company announces a new product in Europe the first question will be - has this already been announced in the US? I recommend that clients always give an honest answer and I work with them to put a European spin on the announcement for them.

Major shows like CeBit do attract the press but don't expect to just bump into them touring the 26 exhibition halls. Most are too busy attending pre-arranged meetings in hospitality suites.

I often advise clients to launch a new product before the show and then announce that the show will be the 'first time for viewing'. So you get two bites of the cherry.

Can announce concurrently, X/Open have done this successfully with a video link between New York and London but it's really where the top honcho is that is the main point of interest. Until we invent the virtual CEO it will stay that way!.

ARE US SHOWS THE BEST WAY TO ANNOUNCE TO INTERNATIONAL COMMUNITY OR ARE INTERNATIONAL SHOWS?

This question is academic. We all want to announce something new on our own territory so that we can test the market and make any adjustments to the product and the marketing materials while we are on home ground. So there is little chance that an American company will make a major announcement in Europe first. Having said that, European clients operating in US have often put such considerations to one side because - bottom line - the US is the largest and most important market and this is where they generally make their major announcements.

CONCLUSION

I think the acid test when comparing American and European exhibitions is that when funds are low - and we've all had that experience over the last few years - exhibitions are the last budget item that American companies will drop and with European companies - when times get difficult - trade shows are generally the first item to be cut.

Although trade shows are one of the more complicated aspects of the European marketing mix - especially if you're looking for a pan- European solution - most European marketing is straightforward and it's very worthwhile taking the other routes - the niched shows, those events where the organisers take the trouble to get the right audience along.

And finally, investing in your own company events - either run as a touring road show organised centrally so that you can keep control of it - or a first class presentation that is shipped to all your offices for local modification.

And if you're into beating records, take a look at PT Telecom from Indonesia who split their presentation team into two and visited 32 cities on 4 continents in l9 days giving 20 formal presentations and holding ll7 one-to-one meetings.

There is a handout with all the main European exhibitions listed and this will be regularly updated on my web site. If you have any questions then I am happy to help you.

WHY IS A PAN-EUROPEAN STRATEGY IMPORTANT?

Please be aware that you probably need to develop a pan-European strategy even if you are only selling into one European country. This is because all companies are getting global - so as to increase their markets or production capability they have to expand and that expansion increasingly involves another European country. So you will undoubtedly be asked about your pan European plans.

WHAT ARE THE REASONS WHY EUROPEAN SHOWS ARE LESS SUCCESSFUL THAN AMERICAN ONES?

This is not a recent phenomena, it has always been the case and shows no sign of changing.

Why are European shows less important and how does it manifest itself?

There is a chicken and egg / Catch 22 situation :

European exhibitions generally have less pulling power so less people attend so companies put in less commitment.

Why do they have less pulling power?

Because most software is developed in America, European companies don't generally have ready access to THE CORPORATE RESOURCES that make exhibitions a success. For example, the major CEOs, the Bill Gates, the Larry Ellisons, the crowd pullers, turning up to keynote a show conference.

As the CEOs of supplier companies don't attend, Guess What? Customer CEOs and IT directors don't attend.

We don't have such ready access to the R&D department so we are less inclined to show white heat technology. In general, products exhibited at European shows have already been announced in the US, covered by the US press and even the European press. So, although European journalists attend shows, there's rarely that buzz that I've experienced at shows over here and show press conferences are less well attended.

Finally, budget. Because our shows don't produce the ROI for the reasons listed above we can't make the investment to make them major events and so the spiral continues.

ARE THERE ANY DIFFERENCES BETWEEN BRITISH AND EUROPEAN SHOWS?

Germany's exhibition centres are generally owned by the city and state governments. This means that the city and state carry the property costs and employ their own fair organisers. This means that the centres are not under pressure to reap rewards from ticket sales or the amount of space they rent. Instead, they are recognised as important instruments for boosting the local economy. Last year, German trade fairs generated DM3.2 billion and another DMll billion in local business, according to the Association of German Fairs.

In addition, the centres are subsidised by a local hotel room tax, as local authorities recognise the value of the business they bring. This can make them more cosseted.

Why are there more exhibitions in the UK. 1. More knowledge and experiences of running shows and 2. UK is very entrepreneurial by nature and is the spawning ground for new shows in all areas, not just IT. On the continent shows are often run by local trade associations and if they don't work then they continue. In the UK, if they don't work they are dropped so there is a continual re-assessment of what works.

WHAT ARE THE RECENT CHANGES AT CeBIT?

Much of the drop in CeBit's figures is due to their management. Because of the large number of SOHO visitors, the organisers have hived off this aspect into a new show (much as Hannover was separated from Hannover Fair ten years ago) and increased the price to discourage local consumer visitors. It's been very effective, the attendees dropped to below l992's figures and anyone who has visited or exhibited at CeBit will be encouraged by this. However, it is worrying that the foreign visitors dropped to 88,800, below the l99l figure because I find it hard to believe that these people are in the 'consumer' bracket. And while CeBit steams on to be a major show its claims of addressing the needs of international audiences continue to need assessment.

Anyone who's visited CeBIT will be happy to tell you their war stories with you but let me share the following with you from this year, courtesy of APT Data Services :

"One IBM marketing executive, who broke down in tears in front of a press party after a series of mix-ups over the travel arrangements, won't be looking forward to going again. Nor will two executives who, in a desperate bid to find their minibus, were forced to scale a fence and do a commando style roll down a snowy bank in their business suits. The tens of thousands of delegates who were forced to spend hours travelling the fair each day were only slightly less disillusioned ... IBM put up delegates in Hamburg, l00 miles away, while invitees to Fujitsu's launch endured a two and a half hour bus journey through Frankfurt's clogged up streets."

I am sure that you, like the business delegate - who had to take a taxi, four trains, a plane and helicopter just to get to the show from another European city - will want to give CeBit some earnest consideration.

WHAT IS IT THAT MAKES EUROPE SO COMPLEX?

Each country - perhaps each region - does have a different culture. In Germany it's a very technical sell and people like to touch and see the product. You have to really show the differential that will be achieved by investing in a new product. In Italy it's more intuitive, a feeling that the supplier shares the same values and goals and the customer. In France, users like to have special development so that a software package is tailored to their particular needs. And in Britain it's increasingly a group decision so you have to sell to a variety of people with different job functions and responsibilities.

In Spain a Swedish client with a Spanish subsidiary was able to beat the competition because his sales manager was from Barcelona, and the customer was a Catalan. The competitor's sales manager was from Madrid the capital of Spain, a logical choice - but not the right politics. OK, the software has to be right but we have to be aware of these nuances.

Thank you!