José Navarro
Director General
E.J. Krause de México
/
Insight

Trade Shows Good Marketing for Auto Firms

Mon, 09/01/2014 - 13:09

For industries like automotive and manufacturing, trade shows have shown themselves to be particularly beneficial as tools for procurement and marketing strategies. E.J. Krause, a global company organizing 40 events worldwide, has identified in recent years an interest in emerging markets such as Mexico for the staging of trade exhibitions. “The idea is to create a marketplace that can provide all the required help to companies and our events can help improve business models and provide solutions to specific industry problems,” says José Navarro, Director General of E.J. Krause de México. Trade shows are naturally a chance to discover the latest trends and developments within the automotive industry. For example, E.J. Krause’s Expo Manufactura has been present in the northern part of Mexico for 18 years and has acted as a diary of the industry’s advances over that time. Navarro states that Expo Manufactura has seen a marked shift in demand in recent editions, with visitors from the manufacturing segment looking for more specialized machinery to cater to new processes. Another interesting development has been the rise of IT-related technology that assists manufacturing processes. “For example, automotive engineers have turned their attention to more automation and robotics, and trade shows reflect that change,” says Navarro. The entry of more transnational companies into the Mexican automotive industry has also been reflected in the exhibitions. According to Navarro, at least 40% of companies attending E.J. Krause events come from overseas. The financial crisis also changed the expo game somewhat. Prior to the 2008 meltdown, Navarro says Mexico was the sixth most popular country for trade shows. “Other countries like China were seen as more important for certain events, but with Mexico’s positive performance of late, there has been a far larger spotlight on us,” he explains. He adds that trade shows in Mexico now benefit from the country’s efforts to shift its previous reputation as a low-cost manufacturer. “Trade shows help companies understand and penetrate unknown markets, and offer them the opportunity to reach potential buyers, create synergies, meet specialised media, and forge alliances.

When compared to other comparable outlets, trade shows can seem a lot more expensive as they demand travelling, product transfer, and booth development. The high costs associated with exhibitions can therefore exclude some SMEs, but nonetheless, Navarro says that E.J. Krause allows companies to tailor participation according to their marketing budget size. For example, the smallest space at Expo Manufactura of 9m2 can go for between US$3,500 and US$3,700. As a rule of thumb, this represents 50% of the total investment required to exhibit. For some SMEs, this still represents a large investment, but Navarro contends that is is virtually impossible to find other marketing media offerings that provide the same exposure for that price level. “An added value that many exhibitors do not take full advantage of is the presence of related business and specific media. These media outlets seek information about the industry and can give companies additional exposure.”

E.J. Krause compiles analysis of all its events held to evaluate the return on investment, including key metrics such as deals done, contacts obtained, and press coverage generated. Since trade shows represent a strong investment commitment from automotive companies, Navarro points out the importance of working alongside exhibitors to clearly identify goals and assist them in effectively reaching their targeted market. He argues that trade shows are clearly beneficial for the procurement strategies of automotive firms. Clients can test out the products or get a demonstration of how they work, increasing the chances of a sales order. Navarro says that the targeted clientele of auto parts manufacturers is why products are displayed so openly. “Experts like automotive engineers are not satisfied with seeing a product on a pamphlet or online. They want to physically evaluate it.” Having the product present offers companies the chance to evaluate quality, time of manufacturing, and even the place of origin. These are important factors when considering purchasing expensive new machinery, as a company has to be certain the equipment is the best choice for its production line. New machinery can represent a hefty six-figure investment, so it is no surprise that strategies should vary from company to company. “A large automotive firm will see more people involved in the decision-making process, whereas in a smaller firm, it is likely that the CEO will weigh heavily on the purchasing decision,” states Navarro. His team visits manufacturing plants and speaks to engineers to identify the types of machinery they are looking for and obtain indepth information on product acquisition strategies. “The automotive industry sees companies from all over the world offering the same kinds of equipment. Expos like ours cut through the fog, allowing companies to stand out and promote their brands face-to-face with potential customers that will make educated comparisons before purchasing.”