Post on 11-May-2015
description
Museum Franchising February 17, 2010
Barcelona
Program MSc in Marketing Management 2009/2010 Research Project Master ThesisStudent Irene de Pedro LlorenteDirector/Advisor José María Álvarez de Lara Morel, CEIC Director
index
1. Executive Summary2. Goals of the master thesis3. Methodology4. Main learnings5. Further steps
index
1. Executive Summary2. Goals of the master thesis3. Methodology4. Main learnings5. Further steps
It is worth doing a master thesis on museum franchising because…
• The trend is becoming increasingly relevant but lacks of specific (scientific) studies
• As a helpful strategy for museums to build successful and/or sustainable businesses, as well as strong brands in a moment especially crucial for the sector
It contributes to museums with a guide & with reflections
• A guide of reference on museum franchising as a competitive advantage for museums: why, when & how, with recommendations & examples
• A series of reflections on the urgency of the introduction of managerial theories & practices in museums as a key for innovation, competitiveness & performance
Self-benefits of the conducted research
• Contribution to improve my knowledge of the museum sector, especially regarding the marketing & management disciplines
• Opportunity to develop a “consultancy project” in the museum field, which is the professional path I would like to follow in my career
Executive Summary
index
1. Executive Summary2. Goals of the master thesis3. Methodology4. Main learnings5. Further steps
The 3 big goals of the master thesis
1. Understand the reasoning behind the museum franchising trend
2. Understand the process and define a model for museum franchising
3. Analyze the suitability of the strategy in the Spanish museum sector
Analyze and define why, when and how is it recommendable to initiate a museum franchising strategy
index
1. Executive Summary2. Goals of the master thesis3. Methodology4. Main learnings5. Further steps
Literature Review
3 Case Studies
1 Model (Theoretical Framework)
Best Practices
Research topic
selection
Input Research & Analysis Output
Methodology
Literature Review
3 Case Studies
1 Model (Theoretical Framework)
Best Practices
Research topic
selection
Input Research & Analysis Output
Methodology
Methodology: Input
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Worth from a cultural perspective: + social impact + exploitation of museum assets
Research questions
? Is museum franchising worth, both from a business and a cultural perspective?? Might it become a key competitive advantage in the long-term?
? Might it be a suitable model in the Spanish museum network? Main hypotheisis
Franchising might become a key competitive advantage for museums in the long-term Might be a suitable model in the Spanish museum network
Secondary hypothesis
Worth from a business perspective: + branding+ economic performance
Literature Review
3 Case Studies
1 Model (Theoretical Framework)
Best Practices
Research topic
selection
Input Research & Analysis Output
Methodology
Methodology. Research & Analysis: Literature Review
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Perspective of the study form 3 academic disciplines…
Management Marketing Arts Management
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Main references are:
• Sandell, R. & Janes, R. R. (2007) Museum Management and Marketing
• Harvard Business Review & Harvard Marketing, Harvard Business School
• Kotler, N. G., Kotler, P. & Kotler, W. I. (2008) Museum Marketing and Strategy
• International Journal of Arts Managemet, HEC Montreal
…that are present in the main bibliography
Methodology. Research & Analysis: Literature Review
More than 70 bibliographic regerences in the form of:• Articles• Corporate papers• Reports• studies• Statistics• Etc.
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Structured in 5 groups of knowledge towards one objective
The Museum Sector
Museum Management
Museum Marketing
Museum Franchising
The Spanish Museum Sector
Methodology. Research & Analysis: Literature Review
Methodology. Research & Analysis: Literature Review
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Trends & Opportunities Challenges
Franchising as a harmeless way for cultural organizations to expand Use of (leisure) time has changed
Franchising as a source for income generation New museum function: entertainment vs. education
Museums as tourism attractions Increasing competition in the leisure arena
Relation between culture & consumption Need to introduce performance measurement
Architectural sensationalism (crisis!) Balance between business success & public service function
Branding to stand over competitors and gain long-term sustainability
High costs of museum franchising: economic investment, organizational culture, maintenance
Implement experience branding to increase attendance
This is a good moment in Spain (crisis!)
Main ideas from the literatue review
Literature Review
3 Case Studies
1 Model (Theoretical Framework)
Best Practices
Research topic
selection
Input Research & Analysis Output
Methodology
Methodology. Research & Analysis: 3 Cases Studies
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
3 case studies
Guggenheim Louvre CaixaForum
+10 projectsSince 1990s (1976)
INTERNATIONAL
+2 projectsSince 2003
INTERNATIONAL
+7 projectsSince 2002
SPAIN
Methodology. Research & Analysis: 3 Cases Studies
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
The Guggenheim as a referent
Guggenheim Louvre CaixaForum
+10 projectsSince 1990s (1976)
INTERNATIONAL
+2 projectsSince 2003
INTERNATIONAL
+7 projectsSince 2002
SPAIN
Methodology. Research & Analysis: 3 Cases Studies
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
The Guggenheim Bilbao Museum: a referent
The Bilbao Effect Culture + Bottom-line business techniques + Political support
OPPORTUNITY
Basque government:• Position he Basque region
internationally• Urban renewal project• Huge investment
SRGF:• Add exhibition space• Add financing sources
PROCESS
• 3 months negotiation• Frank Ghery• 6 years from negotiation to
opening
RESULTS
1 year after opening:• +1M visitors• 73% operating costs
covered• Reversed declining
economic activity• Basque region as a popular
tourist destination
Methodology. Research & Analysis: 3 Cases Studies
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
The Guggenheim Bilbao Museum: the deal
OPENING: October 1997
NEGTIATIONS: October-December 1991
BASQUE GOVERNMENT S.R.G.F.
FINANCING $326M• 100% construction &
operational costs ($256M)• Donation to develop a
Basque collection ($50M)• Franchise fee: 2 tax-free
donations ($10M each)
OPERATIONS & MANAGEMENT
BUILDING & FACILITIES SET-UP DIRECTION
STAFFPROFITS:
tickets & gift shop
BRANDPART OF COLLECTION
TEMPORARY & ITINERANT EXHIBITIONS
“ADVISORY CAPACITY ONLY”
Literature Review
3 Case Studies
1 Model (Theoretical Framework)
Best Practices
Research topic
selection
Input Research & Analysis Output
Methodology
Methodology. Output: A Theoretical Framework of Museum Franchising
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Literature Review
1 model for Musem Franchising
Case Studies Triangular Analysis
WHY? HOW?WHEN?
Methodology. Output: A Theoretical Framework of Museum Franchising
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Advantages & Disadvantages of Museum Franchising
Advantages Disadvantages
Economic effectiveness
• Reach economies of scale
• Reduce maintenance & storage costs
• Increase earned income
• New sources of income & financing
• Better results thanks to major flexibility
• Increased market share
• Better image, reputation & trust
• Impact of increased tourism flows
• Major benefits, in general, for the museum and its environment
• High economic investment required
• High maintenance costs
• Loads of visitors are required
• Numerous employees required
• Difficulty to measure and demonstrate results
Social effectiveness
Better fulfillment of public service function:
• Better use of museum’s resources
• Reach larger audiencesWHY?
4 elements are key in a museum franchising strategy…
Methodology. Output: A Theoretical Framework of Museum Franchising
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
TRADEMARK
the museum brand name
PRODUCT
part of the collection, assets & products
KNOW HOW
staff
ASSISTANCE
pre-opening , acquisitions,
partnerships,
etc.
1 2 3 4
HOW?
…and, although some limitations must be considered,…
Methodology. Output: A Theoretical Framework of Museum Franchising
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
DIMENSIONS of the museum:
Large museums
Power of the museum BRAND:
Strong brand image & notoriety
WHEN?
…the strategy can easily be implemented it in 5 steps
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Methodology. Output: A Theoretical Framework of Museum Franchising
1The right
place
2The right
franchisee
3Negotiating
financing
4The
agreement
5Inauguration & follow-up
• Measure demand levels & typologies and adapt with marketing
• Find urban renovation areas and estimate urgency
Non classic guidelines. Go for public entities + help of local consulting firm
4 sources: • Government
funding• Earned income• Private or donor
giving • Investment
income
Carefully regard: • duration of
contract• shared assets
(especially: coporate image)
• distribution of rights
• obligations & revenues
• royalty & license fees
• relationship regulation
Opening with blockbuster exhibition of permanent collection
HOW?
Methodology. Output: A Theoretical Framework of Museum Franchising
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
Public franchisee vs private franchisee
Public franchisee Private franchisee
Advantages Long-term sustainability Easier & faster negotiation
Disadvantages Complex & time-consuming negotiation Risk of earlier break down
How to sell to the franhisee?
Communicate all potential benefits :
• anchors for development areas• establishes new channels for economic
development• generates direct & indirect jobs &
income for residents• contributes to improve the quality of life
of the community• positions the city as a cultural referent• positions the city as a tourist destination
(impact on tourism industries, taxes, etc.)
Communicate quick, concrete & measurable results• Stress quick wins
HOW?
Literature Review
3 Case Studies
1 Model (Theoretical Framework)
Best Practices
Research topic
selection
Input Research & Analysis Output
Methodology
Methodology. Output: Best Practices identified
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
4 GENERAL
10 MUSUEM MANAGEMENT 5 MUSEUM MARKETING
8 BRANDING
13 EXPERIENCE BRANDING
40 Best Practices identified
GENERAL RECOMMENDATIONSTo help museums anticipate and adapt to consumers needs and preferences and they can attract and maintain them, it is recommendable that those museums: • Position themselves as institutions that provide society with meaning by paying special attention to
the following areas: service quality differentiation and positioning, personnel differentiation and technological differentiation.218
• Expand and diversify audiences to reach broader community support and use it as a source of revenues and a justification for funding
• Develop a performance management and development system (based both in collective and individual work)
• Promote collective leadership (a group of people is at the top of the organization, they share responsibilities and clear accountabilities to develop strategies together and reach decisions by consensus). However, it is worth noting that it is useful to select one single leader among all (primus inter pares).
Methodology. Output: Best Practices identified
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
GENERAL RECOMMENDATIONS
MUSEUM MANAGEMENT• Self-organization, flexible position descriptions, democratic & non-hierarchical committees with rotating
chairs in order to avoid a common risk: narrow mind/view and to promote creativity • Multidisciplinary, multi-functional and cross-departmental teams to cross fertilizing the rich storehouse of
knowledge, skills and experience inherent in museums. To develop programs, exhibitions, enhance general level of creativity, innovation and problem solving
• Avoid business tribalism • Leadership to cope with organizational change • Second curve thinking to avoid decline. Requires: question, scenario planning, be skeptical, curious and
inventive, ask front-line staff • Self-reference as a foundation for change. A clear sense of identity -values, traditions, aspirations,
competencies and culture- that guide the operations (self-reference) helps in sensible change in turbulent environment
• CSR consciousness: museums‟ functions are beyond entertainment and education. Therefore, they must adopt a new sense of accountability and seek long-term sustainability
• Especially in the case of public museums, governing authorities must get better at defining strategic futures for their museums & ensure that their boards are representative of the community diversity and aspirations
• Adopt some performance measurement tool to keep public trust and better justify the need of the museum of further financing
• Never lay-off the organization’s knowledge-owners.
Methodology. Output: Best Practices identified
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
MUSEUM MANAGEMENT
MUSEUM MARKETING• Develop branding on these three key issues: reputation (brand image), recognition (brand
awareness/notoriety) and trust of visitors and supporters. • Success: offer unique and distinctive value to consumers and capture their attention, commitment, and
purchasing behavior.• Transform exchanges as transactions (Single-time exchange) into relationships (long-lasting relationships =
profit & stability) • Ideally: Holistic marketing: 4 elements: INTEGRATED MKG (5ps mkg plan), RELATIONSHIP MKG (building
mutually satisfying long-term relationships among stakeholders; 3 forces: consumers, society, competitive pressures), INTERNAL MKG (consumer-orient the whole organization) and SOCIALLY RESPONSIBLE/CAUSE MKG (the org embodies a commitment to the community & the society as a whole)
• An internal market orientation and inter-functional coordination applied to museums have both a direct and a moderating effect on effectiveness
Methodology. Output: Best Practices identified
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
MUSEUM MARKETING
• Branding should be applied extensively in the following areas of the museum activity: • Use exhibitions to communicate brand identity, mission, vision,… • Use museum boards to further communicate the brand message and the brand promise as they normally
have high visibility and credibility • Use the education department as a guard of one of the museums‟ core function: education. Use the
store(s) as a space for extending this function • Staff (volunteers) are the most relevant touch point: keep them motivated. • Fund raising activities are a good place to brand the museum as well. • Membership actions and/or activities should also be related to branding as the most important source for
brand building, reinforcement and loyalty.
• The expansion/renovation project: • Must be in line with the institution‟s renewal marketing strategies • Can take 8 years approximately • Spaces must be: dynamic. audacious, multi-functional and capable to integrate peripheral activities,
natural light is important, welcoming, accessible and of varying sizes to welcome venues. also facilities for revenue, relaxation and enjoyment: coffee-shops, casual family restaurants and fine-dining rest, … they further enhance the museum experience.
Methodology. Output: Best Practices identified
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
BRANDING
EXPERIENCE BRANDING: ICON BUILDINGS
• Make the building a must-see • The design must transmit the museum brand identity • Involve the state and local tourism groups early and often. • Integrate the architect’s thoughts so that he/she articulates the museums image/identity and
mission creatively • Exhibit maps and miniatures of the new building and new location in the other museums and send
preview brochures to members and donors (mailing list). This way, the new branch will be related to the mother brand creating an umbrella brand architecture. Consequently, brand visibility and brand image will increase potentially in a few time.
• Make the new space part of the community by inviting locals to opine on the appearance, types of activities there, etc. and invite the local orchestra to perform in the lobby, or the city council to meet there.
• Anniversaries: celebrate every commemoration you can • Street signage: “a large surface to display the museum name and logo”
Methodology. Output: Best Practices identified
Research Topic Selection > Literature Review Research + 3 Case Studies Analysis = A theoretical Framework + Best Practices
index
1. Executive Summary2. Goals of the master thesis3. Methodology4. Main learnings5. Further steps
Main learnings on museums & museum networks
Museums potentiality
Museums can be magnets of economic development & urban renewal1
Networks can help a museum to fulfill its objectives and reach social impact in a cost-effective manner2
Networks can help a museum to multiply social and economic effectiveness3
Networks can help a museum to strengthen the museum brand name, its brand image and brand equity4
Main learnings: Why to implement a museum franchising strategy?
5 learnings about the trend
Alive & relevant worlwide: growth strategy chosen by leading institutions (national & international levels). Impact in the market, society and local economies.1
Improves museum productivity. Better results in social and economic dimensions 2
Profitable strategy in the long-term. Contributes to sustainability3
Confirms a change in attitude in the museum sector, more market-oriented4
Contributes to change the perception and relatonship of museums with stakeholders5
Main learnings: when & how to implement it?
5 determinant factors to develop a museum franchising project:
Create strong museum brands and effective marketing (and management) programs1
Tourist location: settle the new museum branch in places with tourism potential2
Spectacular architecture: raise iconic buildings that work as an attraction themselves3
Be open-minded and collaborative regarding franchisees4
Respond to the leisure nature of the demand with a competitive offer, the proper management attitude, and the correct communication strategies5
index
1. Executive Summary2. Goals of the master thesis3. Methodology4. Main learnings5. Further steps
Further steps
Improving the master thesis & going further
Ways to improve
Measure & balance of variables. Criteria: weight in the process (time & resources) & impact on results (ROI, brand image, revenues, etc.)
Fine-tuning, simplification & overall consistency
Next steps
Put in practice the strategy, track the evolution & measure results
Elaborate a definitive model for museum franchising
Develop a museum franchising project for a Spanish museum (Prado museum)
&
Further research in the area of museum branding
Museum Franchising February 17, 2010
Barcelona
Program MSc in Marketing Management 2009/2010 Research Project Master ThesisStudent Irene de Pedro LlorenteDirector/Advisor José María Álvarez de Lara Morel, CEIC Director