Lessons from Melbourne Fiasco

By Pramod Khatiwada

The recently concluded Himalayan Expo-2000 (held in Melbourne, Australia) was a fiasco for the 32 exhibitors from Nepal. The organizers DSL-Australia Pty. Ltd., a company owned by some Devendra Karki, had promised them 20,000 visitors and a business in the range of millions.

The participants say, they believed on the promise because the event was supported by Nepal’s ministries of commerce, industry and foreign affairs as well as by Trade Promotion Center (TPC). Coming back home after the disappointment in Australia, they circulated to the press a complaint letter that they said they have presented to the organizer as well to the ministries and TPC. But the authorities say they have not received the document. Pramod Khatiwada, a student pursuing business management (marketing) course in RMIT, Australia, has prepared this article for Business Age analyzing the situation, and suggesting precautionary measures for the participants of such events.

In the context of a one-country trade exhibition just taken place in the beautiful city of Melbourne, it is the best time to learn few things about trade exhibitions. The output of The Himalayan Expo’ 2000 organized by DSL Australia Pty. Ltd. has necessitated to deal with questions like what and how much to expect from an exhibition, how to evaluate the capability of an organiser, what would be your part as an exhibitor to get most out of an exhibition in a foreign land and how to measure outcome of an exhibition.

Promotion by Exhibition

Exhibition is an interactive form of marketing, which brings your target customers face to face with you. One of the benefit of exhibition is that it offers a detailed product demonstration and a hands-on element so that people can actually touch, see and hear the product without having pressure to buy.

Talking about The Himalayan Expo’ 2000 that took place in Melbourne from 28th March to 1st of April 2000, the exhibitors well knew the benefits of an exhibition in promoting their trades in a foreign land. A questionnaire was designed to survey the attitude of the exhibitors towards such exhibitions. Most of them answered that they would participate in such exhibition in future even though they were very dissatisfied with the outcome of the present event. Most of the exhibitors agreed that such exhibitions are rare opportunities for Nepali businesses to promote their products in overseas market. This belief holds true to a great extent as

• No other method of marketing has been adopted so far in an effective way by Nepali exporters.

• Other traditional methods of promotion could be very expensive for Nepali.

• Easier way to get access to overseas market for promotion which would give additional benefits to personally understand and explore the market.

What does the survey say?

The survey further showed that about 65% of the exhibitors in the event had also taken part in other international trade shows, held in USA, Canada, Germany, France and Hong Kong most of which had multi-national participation. They were hosted by professional organisers and had been very effective in terms of output generation. Few of the exhibitors had organized one company/one product trade exhibition by themselves in few of above countries and they think that it is a more effective way of exhibiting overseas. However, most of the exhibitors thought that participating in a multi-national exhibition organised by professional bodies in this field would give the best outcome.

This result of the survey clearly indicates a threat for Nepali organizers in the future in wining exhibitor’s confidence in a one-nation exhibition in overseas market. Here, the point suggestive to the exhibitors is that an exhibition would fail to give an expected outcome - most likely because of poor promotion, not because it is just one nation exhibition.

About 90% of the participants said that there is a potential market for Nepali export trade overseas. Most optimistic ones were the traders of jewellery, fashion garment, shawls and carpets as they

• Could supply the products in bulk in a short period of time since the labour is relatively more readily/cheaply available

• Have relatively low risk of product damage while transporting the products overseas

Other trade, which is sure of tremendous market potential, is tourism.

Outcome of the 'Himalayan Expo’ 2000

Despite above mentioned facts and other saleable attributes of Nepali goods (for example, they are handmade, have fine quality, unique design and colour, and are low priced) the Expo’ 2000 could not generate a satisfactory outcome. More than 20,000 visitors and million dollar worth of trade were assured by the organiser to the exhibitors. Those became just sweet dreams made of air bubbles. Just about 400 people visited the exhibition in all four days. Sales figures were not disclosed but it is not hard to make a guess how small would have become the face of the exhibitors at the end of the event. Traders of tourism experienced the worst result. They could not give away a single business card to any visitor.

How can the situation be improved in the future?

Rather than blaming a particular party, the best idea would be for the exhibitors themselves to become educated and use the prevention method to stop anyone exploit them. Some suggestions:

a) Setting the objective

Although this sounds simple and obvious, a few minutes spent on working out the objective of the participation would make many other tasks easier.

This exhibition was a first of its kind in Melbourne. So, the prime objective would have been to understand the market, meet local tradespeople. The secondary objective would have been to generate sales. In other cases, generating sales might be the primary objective.

b) Working out minimum level of sales expected

First, work out the budget for all components of the event, then set a minimum level of expected sales. This figure can then be used as a benchmark to compare with the result generated after the show. You might have to set a trade-off of the profit with the opportunity to meet local traders and promote your products as a long-term benefit.

c) Asking the organiser to show the trade-visitors profile

The promotion of exhibition is done through direct marketing, trade press editorial, advertising and consumer press. In promoting Nepali products, the most effective method would be the modern direct marketing technique. To use direct marketing, the organizer develops a profile of all prospective trade-customers who would be interested in the exhibition and informs them about the event and its benefits by sending direct mail.

Now, this profile would help an exhibitor to know how many traders of their particular business are informed about the event and how many can be expected in the event. This profile would also help to evaluate the organiser. If the organiser has not got this profile, forget about taking part in the event. The further assurance of the quality of the profite can be obtained by checking if it is complemented by industry association members from the place where the event is taking place.

d) Preparing yourself

You should not just rely on the organizer to do everything for you. It is your part to think how you can attract the visitors of the exhibition to your stall, qualify them for sale and then follow up. Post-show follow up of the qualified trade customers is the most important task of an exhibitor which helps to generate maximum number of sales or get valuable supply contracts. Therefore, always arrange few days stay after the event to do the follow-up on the lead.

Minor things exhibitors often overlook are the effort given to the presentation of the stall and the attendance and appearance of the sales person.

e) Asking the organiser how they are measuring the success of the event.

The organiser has to be able to present a thoroughly worked out plan on how to measure the outcome. The organiser should not be trusted unless this measurement is convincing.

Measurement is done according to the objective of participation in the event which is mentioned in the first step. The measure of success would be the number of orders placed, number of inquires taken or amount of goodwill generated.

The success of exhibition can also be measured by assessing the organizer. This could be done by observing how effectively they generated traffic at the event, how many from this traffic were the genuine customers and how were the services offered to the exhibitors.

f) Insist for risk-sharing mechanism

You should ask the organizer to show a mechanism, which ensures that the organiser also bears certain risk that is attached with the outcome of the event. Given the outcome of the last exhibition, this may be an effective way of avoiding the black cloud between the exhibitors and organisers. Sales are not necessarily what organisers can generate. The risk can be directly attached to number of visitors to the event and the degree of those visitors being prospective customers. The instrument can be a legal contract which guarantees certain percentage of money back to the exhibitor if a minimum number of visitors do not attend the show, or paying certain amount of money only after the event. It can also be that a part of the payment is a percentage of sales generated at the event.

For organizers

Organizers of such events overseas in the future have to work hard to clear the negative image generated among the exhibitors. The better-educated exhibitors are not the threats but the assets to the organisers. The organisers can prepare themselves professionally and show reasons why exhibitors should trust them. The effective exhibitors in the future will clear the doubt among exhibitors and also develop more professional culture in the market of this promotional technique.

Organizers can also focus on adding value to the service offered. In the Expo’ 2000, the organiser arranged attractive value added services, which has pre-exhibition importance like freight forwarding, clearance, visa and special travel fare. Other Additional value-added services would be

• Providing short training on ‘effective presentation of the stall’

• Issuing questionnaires to exhibitors to let them evaluate you as an organiser.

• Set up a mechanism for collecting feedback from visitors

• Offering better lead management. Providing the exhibitors the list of direct mail, giving them information on demographic and psychographic profile of the prospective customers and providing guidance on how to prepare for follow-up on leads generated at the event.

• Following up important visitors from the direct mail list to make sure they visit the event.

There is no doubt about the market opportunity in Australia for Nepali exports. Equally doubtless is that exhibition would be a good marketing tool to promote those products in any overseas market. But, more has to be done to achieve a great exposure and market opportunity in a foreign land for those trades through exhibition. Also, Nepali traders should look for many other marketing avenues besides exhibition in order to explore and exploit market overseas.

CFC and Fridges

The residents of Kathmandu are known to have better awareness and knowledge of their environment as compared to their counterparts living in this region. Unfortunately, weak economic conditions do little to help maintain this standard.

A resident of ward No. 17, Thapathali, Kathmandu and working as an officer in a government organization, Biswamani Acharya bought an environment-friendly refrigerator known not to have Hydrogen based chloro-fluorocarbon (HCFC). Well-informed and educated, Acharya was taken aback when a year later he had to transport the fridge to a workshop for repairs and was informed by the mechanic that the CFC free gas (HCFCR-134a) in his fridge had been used out and that such gas was in fact three times more expensive than the gas with CFC (CFCR-24,12,113) used in other refrigerators. The mechanic, however, put him at ease by informing that the common gas with CFC could be used to replace the expensive but environment-friendly alternative. So, Acharya gave his consent to replace HCFC by CFC, considering the amount available in his purse.

CFC is regarded a strong destroyer of environment. It damages the ozone layer of the earth, thus exposing the earth to direct rays of the sun which is not only harmful to human and animal life but also to natural vegetation, making them susceptible to skin problems, cancer and other diseases. Scientists also point out the dangers to genes and their natural growth.

CFC gas is also present in air-conditioners and it is an essential industrial gas to produce foam and sponge. Although no study has been conducted on the scale of consumption of items with CFC, businessmen roughly put the yearly demand for refrigerators to 10,000 units and foam and sponges to one million kg. And what is more, the demand is ever-growing, according to M. K. Singh, the proprietor of Seesam Enterprises that deals in consumer durable and furnishing material.

Refrigerators using CFC gas are also preferred since they are a good deal (Rs. 10,000 - Rs, 15,000) cheaper than the HCFC gas refrigerators. Although the Nepali market is flooded with international brand fridges from India, Malaysia, China and Korea, the Indian brands are less popular in Kathmandu. The picture is entirely different in the terai region where Indian fridges have hogged the market. M. P. Singh estimates that 99% of the households have fridges that use CFC gas.

The environment-related NGOs within the Kathmandu valley could add little information to this report. The businessmen concerned were also found ignorant. The booklets that accompany refrigerators and air-conditioners also have no information on the subject. Rakesh Kumar Sanghai, general manager of Mahesh Overseas, the Kathmandu-based distributor of LG refrigerators, admits that he himself has little technical knowledge about it. He further adds that both CFC free and CFC gas bearing LG refrigerators are available in the market.

Says lecturer of Engineering Campus, Pulchowk, Prajwal Dhital (a mechanical engineer), "CFCR-24,12,113 and HCFC - R134a gas have great industrial importance since they are characterized by having cooling effect and having properties to expand foam and sponges that are good insulators of electricity. However", he adds, "while HCFC-134a does not spread in the environment and dissolves in the earth, thus being environment friendly, CFCR-24,12,113 is light and tends to spread in the environment and destroy the ozone layer." Dhital also revealed that while HCFC gas could not be used to replace CFC, the latter can easily replace the former gas in refrigerators.

Aamod Pokharel, General Secretary of Leaders Nepal, an NGO, feels that customers should be provided complete knowledge on this aspect, and distributors of CFC items should help in flow of information. He also opines that the government should come forward with a strong hand and put a stop to activities favouring destruction of the environment.

 The Fifth P

By Anooz

One day a customer told me that Gill Marry (a liquor brand) was selling very well, even without any special effort from the company. I immediately countered him and said, such a perception was because we couldn’t see through our normal eyes how much the company has done to make the brand successful. In fact if we go into the depth and analyze their job, creativity, investment, vision, and also the risk they took while launching the brand, we can see that their efforts have been enormous. One knows each and everything he has done about his products, but the people outside will know only a certain percentage of that.

What I have found in the success of Gill Marry is the packaging. Though it may be only one out of many success factors, it is the most outstanding one. They used guala cap for the first time in a 40° UP brand in Nepal and used specific bottle manufactured by an automatic plant for the exclusive use of this company. They spent a big amount of money on advertisement and publicity with sufficient selling and distribution activities. These all are very expensive and creative efforts. Being a 40º UP brand, it carries a high image competing with premium quality brands of 25º UP. It has been accepted as prestige drink by its consumers and known as whisky though it has not been labeled a whisky, because that is not allowed by the government rule. The brand has earned lot of reputation in the market, attracted lot of consumers and is enjoying good sales. Yes, there are a lot of factors working in a combined manner, and out of them, one is the packaging - the fifth P.

Packaging is comparatively very new element in marketing. It was not considered a basic component of marketing in the yesteryears, because only the other four components (product, price, place, and promotion) were considered the basic element of marketing. Those were the days when the competition was less and the demand was greater than supply. The number of manufacturers could be counted in one's fingertips. There was not much choice for the consumers. Packaging was only in the form of packing and was done for the purpose of storing and carrying the product. Now, it has been one of the basic components of marketing due to which the customers or consumers are attracted towards the products or the brands. The market has become much competitive. One can find it difficult to choose the brand. There are numerous brands available in the market in the same line of product. These days, the competition is neither between the best and the better nor with the worst. It is among the bests. Every manufacturer is facing a problem of how to differentiate his own products from those of the others. One of the easier ways to differentiate a product is packaging. It is quite simple to understand that a good packaging always attracts the buyers and persuades them to buy the product. Customers do not go for a bad looking pack because that makes the consumers think the product quality also to be bad.

We have got lot of examples of change in packaging in the recent times to give the brand a good look and a high image to attract the customers. Not long ago, Star beer used to be packed in jute sacks. Now we can’t see any beer brand packed like that and we can’t even imagine so. Carlsberg sales were so nominal before changing its bottles into green. This brand now is doing well day by day after the packaging change.

We are fortunate or unfortunate that we didn’t see the old packaging of McDowell’s premium which was changed a few years back. It came into Nepal in the new improved version of packaging. Likewise, the other brand of the same company, Bagpiper has come out with a separate and improved get-up recently. Company has changed the bottle design, the label as well as the monocarton. What they have felt is that existing packaging standard is not sufficient to fight with the competitors where Jawalakhel Distillery is coming out with ‘Royal Stag’, Sharda Distillery with ‘Aristocrat’ and Golden Globe with ‘8 pm’. All these brands are supported by Indian companies.

A typical example of the benefit of packaging is giving by one recent development in cola business in Nepal. Previously Coca-Cola and Pepsi-Cola both had 250-ml bottle. After sometimes Pepsi-Cola introduced 300-ml bottle in Kathmandu, then started importing 1.5 ltr. and 500 ml pet bottles from India. Pepsi-Cola got a positive response for its pet bottle and erected its own pet bottle-manufacturing unit in its factory in Nepal making a huge investment. No doubt they have got good response from their move. Recently, the same company has launched 200-ml bottle (Phuchche Pepsi) in Kathmandu and getting tremendous response. If it is not interacted by the competitor, Pepsi- Cola will definitely gain a good market share in the future. Why is Phuchche Pepsi doing so good? Is it because of the taste of the product or any other promotional campaign? No, it is because of packaging that is accepted by the prospects, and also because of the price, which has come down proportionately.

Packaging doesn’t mean only good looking. It means right quantity, good shape, easy to handle and easy to carry, too. Marketing is a combination of different factors, which are equally important. We can never avoid any one of the factors while doing a business. We have to keep in track with the time. Packaging is an emerging factor of successful business. We can say ‘Good packaging is not the only solution, but one of the basic elements for the success."