PRODUCT LIFECYCLEwww.exhibition-world.net Issue 8 | 201123VNU EXHIBITIONS EUROPE OPERATES 53 TRADE AND CONSUMER SHOWS IN 20 MARKETS, RUNS NINE ONLINE PRODUCTS AND EIGHT SUMMITS. HOW DOES IT KEEP ITS PORTFOLIO HEALTHY? 2010. Even more astonishing - in relation to this topic - is that 70 per cent of those revenues did not even exist in 2001. As organisers we're never going to be in the position Apple was in. But by looking at new business models and combining them with new technology, we have a lot more potential for growth in the early phases of the lifecycle." Product lifecycleIn a bid to understand what it needed to do with each of its products, VNU looked at its offerings through the fi lter of proven product assessment matrices, such as the Boston Consulting Group Matrix, McKinsey Matrix and ADL Matrix (if you don't know them, you should do) and decided to manage each one accordingly. Crucially, VNU assessed which stage of product lifecycle each show was in: Introduction, growth, maturity or decline."We assigned project managers to those shows we decided were in a stage of maturity or decline. very product or service has a limited life. Some exist for decades as market leaders. Others, like cellphones or computers, might only manage a couple of months. Like any other product, exhibitions fi nd their feet in a market, then enter growth and climb to maturity before other events needle away at their market share and the show's profi ts decline. At this point an organiser is forced to readjust or consign the event to the annals of history. What is misunderstood, according to John van der Valk, MD of exhibitions and cross media at VNU Exhibitions Europe, is that the lifecycle of your exhibition can be prolonged. The offering can be improved, the life span extended through promotion and marketing. It often yields revenue streams that were not previously considered. "Let's take an extreme example," says van der Valk. "Apple was at only US$5bn in revenues in 2001. The company grew its revenues to $65bn in ARE WE DONE YET?
PRODUCT LIFECYCLEIssue 8 | 2011 www.24exhibition-world.netPRODUCT LIFE CYCLEIntroductionGrowthMaturityDeclineRevenue / profitTimeRevenueProfit"We decided to go niche. We made a specifi c brand for only jewels and watches. And we increased the price for exhibitors, using that money for a common marketing budget," says van der Valk. "This made exhibitors a lot more involved, thinking about initiatives we could use to attract visitors - and high-quality visitors - and that really worked. It garnered a lot of trust among exhibitors and 80 per cent of the major exhibitors signed on for three years. If you look at numbers, we were growing exhibitors by 40 per cent and visitors by 10 per cent. We extended the life and profi tability of that event by going niche."Turning insights into action What's key is to be aware of change, registering your products' progression through the cycle. "You need to talk to visitors and exhibitors and get a real sense of where your events are," says van der Valk. "You have to be early in detecting change because once an event starts slipping to the next stage in the lifecycle then obviously you have to act on it. Sit with your exhibitors, with your own teams, and make plans to inject new life into it." Organisers must be mindful of the long term, he adds. "It is always easy to stick your head in the sand, accept the profi ts of an event and hope you can sit it out for one more edition. But make sure you're not going to be paralysed by short-term profi ts and look at the long term. Make changes before it's too late."In all this it's important to remember that events don't operate in isolation. Portfolio assessment on the basis of profi t is all very well for arranging your products into matrices, but it largely excludes the events of your competition. You need to do your research. The decision of whether or not to invest in one of your shows can be made only after understanding the shows you're up against. These guys were asked to come up with a plan to reinvent them, put those plans into action and inject new life into the products," says van der Valk. "We've got a couple of industrial trade shows that were in the mature phase and started looking at their visitor base, their profi les and whether we had exhibitions with more or less matching profi les or could fi nd partners that did. In co-locating with those shows we were able to provide stronger arguments for visitors to come back to the show, spending longer once they were there. "As a consequence, exhibitors found a lot more quality, and that was a good move in the mature phase to make sure the visitors felt there was a good concept at those shows once again." Another method for extending the life of a mature product is geocloning, or taking the event into a new territory. VNU runs an international agricultural brand titled VIV, dedicated to the feed and meat industry. "In Europe VIV was entering a mature phase, because the market in Europe was entering a mature phase. It was diffi cult to take advantage of the growth rates in Asia. So we launched similar shows in China and Thailand," says van der Valk. "In turn those events - because we were able to attract new exhibitors and visitors - made our events in Europe stronger as well. It's a good example of where geocloning supplied new events while making the original one stronger." Decline and fallThe fi nal phase of any product is decline, and there are several ways to deal with that when it happens. Perhaps most obviously you can change the frequency of the show and take it from an annual to a biennial. But once the return on investment from your exhibitors is under fi re, or the level of innovation is going down in a market, it's time to look at what your show really brings to the market."Most strategy consultants give two methods," says van der Valk. "Either you standardise your product quickly and compete on a base of low cost, or you modify your product continuously and you compete on the basis of product uniqueness, hoping to charge premium prices. In most cases that second one is the model we are following."In the case of retail fashion event Trade Mart Utrecht, VNU found a niche and focused exclusively on that. The event spanned two fl oors, one of which was centred around the high-end jewellery segment. When the show came under pressure, with both exhibitor and visitor numbers in decline, VNU sought a solution.Above:VNU Exhibitions Europe Business 101. The product lifecycle - but does it need to end?is launching a new horticultural event in Bangkok with local Thai operator NCC.Horti Asia 2012 is being developed with support from the Ministry of Agriculture and Cooperatives, as well as the Thailand Convention and Exhibition Bureau (TCEB). The event will take place at the Bangkok International Trade and Exhibition Centre (BITEC) from 9 until 11 May 2012.The show has been created to support the current fast-growing horticulture and fl oriculture industries fl ourishing across the ASEAN region, as well as to promote buyers and sellers creating awareness of - and providing education to - the growing horticultural industry.The event is expected to cover 9,000sqm (gross), targeting exhibitors in breeding, seeds, planting and cultivation, as well as monitoring technologies and greenhouse equipment and technologies.VNU IN THAILAND