May 19, 2003 Doctor of Business Admission The Hong Kong Polytechnic University MGT6011 Qualitative Research and Consultancy

Student Group Project : A Consultancy Report

Topic: Hong Kong Airport Exhibition Hall (HKAE) Marketing & Promotion

Host: The secretary general of HKECOSA Andrew Kay kay@cpexhibition.com

Consultants: Ms. Wang Wei Lawrence Yip Paul Liu Vincent Tam Kenneth Chu Pablo Chan

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TABLE OF CONTENTS: 1) Abstract 2) Keywords 3) Introduction 4) Methodology 5) The relationship of HKAE and HKCEC 6) The Competitive Edge among other halls in Mainland China and Singapore 7) Objective 8) Diagnosis and Design 9) Literature Review 10) Interview 11) Conceptual Frameworks - 5 forces and SWOT analysis 12) Intervention & Recommendation 13) Conclusion 14) Evaluation and Withdraw 15) References

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1) Abstract Hong Kong government has just decided to invest HK$2 billion in the building of Hong Kong Airport Exhibition Center (HKAE) with 60,000-100,000 square meter (sqm) exhibition hall near the Hong Kong Airport. Four international hall management and investment companies responded to the call for tender. The existing HK Convention and Exhibition Center (HKCEC) in Wanchai has only 65,000 sqm of space, and may expand to 90,000 sqm with the third phase. Hong Kong Exhibition & Convention Organizers and Suppliers Association (HKECOSA) which included nearly all major exhibition organizers; have commissioned a team of consultants to study the market niche of HKEA and to make sure that HKEA would not be a white elephant. The consultants identified the framework from the host (HKECOSA), the secondary sources and interviews, using (i) the 5 forces model; (ii) SWOT analysis to formulate a strategy recommendations on how to bring business to HKAE. The consultants recommended that a number of unique positioning should be included in the drafting of the marketing strategy to differentiate and to create its discernible competitive edge which includes (i) closeness to Chek Lap Kok Airport; (ii) extending and enlarging of the type of conferences and exhibitions that can be held in Hong Kong; (iii) cost effectiveness with regard to its location and ancillary facilities available compared with HKCEC; (iv) offering all-in-one exhibition and conference complex to serve the needs of the event visitors traveling with their families. Advertising and promotional plan were recommended on how to market and advertise HKEA. With proper strategies in place, the new HKAE would complement the existing HKCEC and would pay off in the long run.

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2) Keywords Hong Kong Convention Exhibition Center Airport Marketing Promotion Advertisement Consultancy

3) Introduction The convention and exhibition market creates major economic benefits for Hong Kong. It does not only generate employment opportunities and revenue within the conventions and exhibitions industries and other related industries but would also promote tourism business in Hong Kong and provide a new venue or market place to showcase Hong Kongs products and services. It also enhances the international image of Hong Kong as Asias center for business, finance and services. The government fully acknowledges these importance and is proposing the building of Hong Kong Airport Exhibition Center (HKAE) in Chek Lap Kok International Airport in which the majority will be funded by the government. HKAE, financially, may not bring good return to the investment of HK$2 billion from the government; but Hong Kong as a whole can benefit (BSG, 2002) from its leading position as Consumer Product Trade Center for China, and the hub of South East China. Without the new space, Hong Kong will lose out to Pearl River Delta and Singapore. Pearl River Delta now has over 800,000 sqm of exhibition space. Shanghai and Beijing each have 150,000 sqm. The HKECE is full during the peak months, which stopped new exhibition opportunity and growth. HKAE should not be in competition with HKCEC. It will be complementary to HKCEC. Venues in Pearl River Delta and Shanghai may be its threats.

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4) Consultancy Methodology: This report follows the method introduced by Dr David Thompson (Thompson, 2003). They are entry, contracting, data collection, diagnosis, design, intervention, evaluation and withdraw. The host of this consultancy is HK Exhibition & Convention Organizers and Suppliers Association (HKECOSA) Entry: The decision to construct the new HKEA is made. Now is the time to consider how to market the HKEA. Contracting: This report is to recommend method of marketing, advertising and promoting for this new HKAE, so that it will not be a white elephant. Data Collection: From the host (HKECOSA), the secondary sources and interviews with professionals Diagnosis: With the background of other exhibition centers in GPRD, then identified the frameworks. Frameworks: 5 Forces (competitors, suppliers, buyers, substitutes, barriers to entry) & SWOT analysis will be used. Recommendation will be on Marketing, Advertising & Promotion. Evaluation and withdraw for future follow up

5) The relationship of HKAE and HKCEC: The relationship between HKAE and HKCEC is not contradictory. The reason why HKAE should be built is as follows: firstly, some of Hong Kongs leading exhibitions are already exceeding maximum capacity. Secondly, demand growth for HKCEC space is likely to be steady. HKAE is unlikely to be a significant substitute as it addresses complementary exhibition categories. Because HK will make full use of HKAE to host large exhibitions such as international car and boat shows, construction and engineering equipment expos, and other major trade fairs. These kinds of exhibition are excluded in the categories of

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HKCEC. So the relationship between HKAE and HKCEC is not contradictory, but complementary.

6) The Competitive Edge among other halls in Mainland China and Singapore With the economy development of Mainland China and Chinas entering WTO, and Singapore has also focused on the development of exhibition and convention, they have competed with Hong Kong. In order to find Hong Kongs competitive edge, we should review the exhibition and convention of Hong Kong, Singapore and Mainland China.

a) Singapore a.1 The Background of Singapore Exhibition:

Singapore is the first introduction site of exhibition from Europe and USA to Asia. The exhibition and business service industries in Singapore accounted for the employment of 80,894 persons and value-added S$5.3 billion to the economy in 1999. According to the Singapore Tourism Board (STB), 880 conventions were held in Singapore in 2001. Until now, Singapore is still the most advanced in exhibition and convention. Like Hong Kong, Singapore was also trying to build a reputation as a convention and exhibition city. And Singapore also faced huge problems with its inadequate facilities. The new Sing-Expo, which cost the Government S$220 (around US$125 million) to build, has 60,000 sq. m. indoor exhibition space spread over six halls and another 25,000 sq. m. outdoor exhibition space. a.2 Advantages of Singapore:

Singapore retains its fifth position in the 2000 ranking of the worlds top convention cities, which was compiled by the Union of International Association (UIA). Already a choice locale, IE Singapores vision is for Singapore to be both a hub

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and a launch pad for exhibitions of international repute. IE Singapores blueprint is set out in the International Exhibition City (IEC) Program. Through this program, IE Singapore encourages new international trade fairs and conferences to situate in Singapore while grooming existing ones into leading industry events for expansion into the Asia Pacific region.

b) Mainland China: Three Important Exhibition Cities: In 2001, the GDP of Mainland China was RMB8900 billion, while the exhibition industry made a net direct contribution to the China economy of RMB4 billion. Compared with RMB8900 billion, the exhibition contribution to the whole economy is only 0.044%. However, this proportion in developed countries is 0.2%. According to this, China exhibition industry output value should be RMB17.8 billion. Thus, China exhibition industry still has very big room to develop. At present, China has developed three important exhibition cities: Beijing, Shanghai and Guangzhou. Beijing has positioned to be the capital of international exhibition. In 2002, the

exhibition space was less than 2 million sq. m, while the number of exhibition amounted to more than 200. The limited space restricted the development of exhibition industry in Beijing. Thus, the new CIEC will be built by 2006, which has 200 thousand sq. m. Shanghai is the biggest city in China. In 2001, the output value of exhibition and

convention was RMB1.8 billion, which was 45% of the whole country. In 2002, the number of exhibition held in Shanghai was 149, which was the biggest one, compared with Singapore, 102; Hong Kong, 90; Guangzhou, 46. Since the International Fair will be taken place in Shanghai in 2010, the development of exhibition industry will have very large room. Guangzhou has built the new exhibition center, which is the biggest one in Asia and7

the second biggest in the world. The government emphasizes the development of exhibition industry. Guangzhou has very good basis for developing exhibition industry. The famous China Export Commodities Fair (the Canton Fair) has being taken place in Guangzhou from 1957. Greater Pearl River Delta PRD includes the neighboring cities of Shenzhen, Dongguan, Guangzhou, Shunde, Zhongshan, Zhuhai - lining along both banks of the Pearl River. The delta has become the workshops of the world for light industrial goods. It has a population of 50 millions (including 25 million migrant workers), with a GDP of 836.4 billion yuan (US$ 101 billion). (or HK$4,040 per capita of permanent resident). Exports from the delta amounted to US $ 90.83 billion (about 30% of total China Export). The GDP in PRD growth rate was over 10% in 2002. Together with Hong Kong and Macau, we named this as Greater Pearl River Delta (GPRD). Hong Kong has 7 million populations, a GDP of HK$1,280 billion (US$164 billion) in 2001 (or HK$23,450 per capita -5.8 times more than PRD). Hong Kong can get to most cities in PRD within 3 hours by cars, trains or ferries. The Mainland Chinese government required its citizen to go to Hong Kong with an exit visa, which can take a few weeks to process with a proper business or personal reason. Tourist visa from China has to apply in-group through travel agent. This is the biggest obstacle for HK convention and exhibition to attract visitors from Mainland China. c) The weaknesses of HK exhibition and convention: The exhibition space and price are the weaknesses of Hong Kong. At present, Hong Kong has the smallest exhibition space, only 64,000 sq. m, which will amount to only 200,000 sq. m five years later. This number is only bigger than that of Singapore, 150,000 sq. m, and

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smaller than that of Beijing, Shanghai and Guangzhou PR Delta. In terms of price per sq. m, Hong Kong is the most expensive one, US$6-4. Guangzhou and PRD are the cheapest one, only US$3.8-1.0.

Beijing Shanghai Guangzhou and PR Delta Hong Kong Singapore

Hall 4 5 10 1 2

Size sqm 150,000 150,000 800,000 70,000 150,000

Price US$/sqm 3.8 3.8 3.8-1.0 6-4 3.5

d) Top Convention and Exhibition Centers in Greater Pearl River Delta GPRD Source: (DCOEM, 2003) Exhibition / Convention in square meters Guangzhou Intl Exhibition & Convention Ctr. Guangzhou Chinese Export Commodities Dongguan Modern Intl Exhibition Center Shenzhen Convention & Exhibition Center Hong Kong HKCEC Zhuhai - Intl Aviation & Aerospace Exhibition Shunde Intl Exhibition Center Shenzhen Hi-Tech Fair Exhibition Center Dongguan Intl Convention & Exhibition Ctr. Panyu Baiyue Exhibition Center Total square meter in major C&E Centers Top Nine C&E Centers not included HK in sqm 2002 186,000 170,000 130,000 103,109 64,000 50,000 40,000 36,000 25,540 16.000 820,649 756,649

e) Competition: Hong Kong is facing stiff competition from the Chinese Mainland in two areas: In events for industries in which there is no established tradition in Hong Kong. Events for which the main audience is manufacturing engineers and shop floor

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supervisors (e.g. machine tools and some other heavy industry events) are now largely taking place in Mainland China. f) The Weakness of Singapore and Mainland China: Singapore also faces the problem of limited exhibition space. The most important weakness to Singapore is that Malaysian and Indonesian are discouraged by their government to visit exhibitions in Singapore. This makes Hong Kong to have the chance to take the leader position in some extent. The nature of events in the Mainland China is different from those which take place in Hong Kong. Key characteristics which distinguish the majority of China events are: firstly, these events are primarily domestic in both exhibitor and visitor profile. With the exception of the Canton Fair, very few events in China have succeeded in attracting more than a very small portion of international buyers. Secondly, events in the Mainland China are clearly cheaper than those in Hong Kong and prices are falling. This is largely due to a proliferation of similar events driven in particular by the emergence of many new exhibition centers.

7) Objective of the consultancy Statistic revealed that exhibition business has been a growth area in Hong Kong. During the peak months in April/May and October/November the Hong Kong Convention and Exhibition Center is totally full. The limited exhibition space has stopped new exhibition business and growth in the industry. In order to address the present shortage in exhibition venue, the Hong Kong Trade Development Council asked A.T. Kearney to conduct a consultancy study in 2001 and their recommendation was to expand an additional 26,000 square meter of exhibition space by 2009. The presently proposed Hong Kong Airport Exhibition Hall will provide additional exhibition space to the territory. Because of its unique features, it will not compete directly

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with the existing HKCEC but provide alternatives for shows that would otherwise be considered not suitable for Hong Kong. The Hong Kong SAR government welcomes the economic return (estimated to be 3.6 times) and agreed to invest HK$ 2 billion in the construction of the HKEA. Private operators will be invited to invest an extra HK$0.4 billion into the project. To ensure that HKAE would not be a white elephant, HKECOSA hired consultants to study the market niche of HKEA.

8) Diagnosis and Design 1) The terms of reference of the consultants will assume that the HKAE will be constructed. From this basis the consultant will investigate the market potential of the proposed exhibition venue taking into consideration the unique features it can offer to the exhibitors. By reviewing currently available secondary data and conducting interviews with related parties, the consultants will ascertain the business potential profiles based on feedbacks in the following areas: Awareness of the construction and the special features of the HKAE and general reaction on the construction of the facilities in the industry Co-operation opportunities with Hong Kong Tourist Board Strategic partnership with major intermediaries Co-operation with travel operators Co-operation with HKECOSA Partnership with government and private bodies

Based on the findings from the above diagnosis, the consultant prepared a marketing plan for the consideration of the HKAE management in the SWOT and 5 Forces format.

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9) Literature Review Identified the frameworks from the information provided by the host (HKECOSA) and the secondary sources: Economic Service Bureau (HK-Government-Secretariat, 2000) initiated the idea of the second exhibition hall. HKTDC hired A.T.Kearney (Kearney, 2003) to conduct a consultancy to justify why an additional 26,000 sqm is needed in HKCEC by 2009 HKECOSA position paper (Feb.(HKECOSA, 2002) supported the HK government proposal telling why a new exhibition hall is needed for Hong Kong to stay in leading position over China and Singapore BSGAsia (BSG, 2002) hired by HKECOSA to study the economic impact of Hong Kong Exhibition Industry (MacLaurin & Leong, 2001) discussed the strategies for success in Singapore (Qu, Li, & Kei Tat Chu, 2000) talked about the comparative analysis of HK (Zhang & Go, 1999) talked about the problems & Strategies in Beijing

10) Interview From the information provided by the host (HKECOSA), conceptual frameworks and draft recommendation are made. To improve the accuracy, interviews from professionals, such as Ms. Mabel Hung, from HK Tourist Board, Ms Monica Lee from HKCEC and Mr. S. C. Tam from HKECOSA. Site visit to HKCEC was made. Interview results are listed in the appendix B.

11) Conceptual Frameworks - 5 forces and SWOT analysis To formulate strategy recommendations on how to bring business to HKAE the consultancy team first analyzed Hong Kong and HKAE competitive position. The first framework used

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is the Five-Forces analysis (potential entrants, buyers, industry competitors, suppliers and substitutes analysis). According to (Porter, 1980), the five forces jointly determine the intensity of industry competition and profitability, and the strongest force or forces are governing and become crucial from the point of view of strategy formulation. The second framework is SWOT analysis (strengths, weaknesses, opportunities and threats analysis).

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a) Macro Five-Forces Analysis (HK Verses Singapore and Mainland China for exhibition, conference, sport, concert and other events):

Macao is planning to build an 80,000 square

Potential Entrants

meters exhibition center; Also there will be new exhibition halls in Pearl River Delta,

Strong

Shanghai and Beijing are coming up in the next three years.

Weak SuppliersFreight forwarders, hotels, restaurants, transportation providers are the beneficiaries of the exhibition and conference industry so they give

Industry Medium Competitors Strong*

BuyersWhile there are a number of location

choices: Singapore and China, there are strengths and limitations of each location

WeakWhile there is possible competition from

Substitutes

the Internet and other alternative media, it will take a few years before the buyers will accept these products.

Rivalry among various South East Asia Countries is strong. Exhibition and conference business is a very profitable business and will bring a lot of addition business for the business.

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b) Micro Five-Forces Analysis (HKAE verses HKCEC, Kowloon Bay Exhibition Hall and Hunghom Stadium): Potential EntrantsThe investment for a new exhibition and conference center is large and takes a few years to build. However HKCEC is looking at

Medium

expanding its exhibition meterage from 65,000 square meter to 90,000 square meters.

Weak Suppliers

Industry Medium Competitors Strong*

Buyers

Freight forwarders, hotels, restaurants, transportation providers are the beneficiaries of the exhibition and conference industry so they give support to the industry.

Choice for the buyers is limited especially at peak season. However HKTDC and HKCEC have an agreement that limit HKTDC to organize exhibition in HKAE.

WeakWhile there is possible competition from

Substitutes

the Internet and other alternative media, it will take a few years before the buyers will accept these products.

* Rivalry among various exhibition and conference providers are strong as exhibition and conference is a very profitable business.

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c) Macro SWOT Analysis (HK Verses Singapore and Mainland China for exhibition, conference, sport, concert and other events): Strengths: Hong Kong is strategic located within five hours flight time from anywhere in Asia. Hong Kong International Airport at Chek Lap Kok links Hong Kong to 130 cities worldwide by some 3,500 passenger flights and 400 cargo flights weekly. Hong Kong offers visa free entry to citizens of 160 nations and attracts international attendees with its reputation as a safe, reliable and law-abiding place. Hong Kong is a free port with no trade license or tariff on most general merchandise to be exhibited. Hong Kong has a world-class transportation system and an excellent supporting infrastructure network of hotels and restaurants. Hong Kong offers a broad range of cultural and entertainment activities to visitors. Hong Kong has a large and readily available pool of experienced convention and exhibition professionals including booth designers, contractors, marketing experts and freight forwarders. Chinese exhibitors and buyers perceive Hong Kong events as being more international; and offer better quality and more reliable performance than those in China. Chinese exhibitors and buyers believe that there is a better protection of intellectual property in Hong Kong than in China. Compare to Singapore Hong Kong is close to China and is more convenient to Chinese exhibitors and buyers. Weaknesses: Exhibitors and visitors perceive Hong Kong as an expensive place to exhibit and visit. Average exhibition rental cost per square meter per day doubles that of Singapore and is three to five times more expensive than China.

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During the peak exhibition months, namely January, March to June, September to November, new exhibition has difficulty in booking venue in Hong Kong.

Due to the dominance by HKTDC, the growth of private companies in exhibition business in Hong Kong is slow and limited.

Opportunities: In the five years since 1996, visitor attendance to exhibition in Hong Kong has grown 93%. It is expected that this growing trend will continue in the future. In the five years since 1996, the number of exhibition companies for exhibition in Hong Kong has risen 70% and the net square meterage has risen 85%. It is expected that this growing trend will continue in the future. With Chinas entry into WTO, Hong Kong trade fairs and conventions are expected to become an important focal point for Mainland Chinese and international businessman seeking joint venture partners and business opportunities in China. With the opening of Hong Kong Disneyland in 2005, Hong Kong is expected to become an even greater draw for international visitors combining business and leisure in one trip. Threats: There are serious competitions from Mainland China - Events in Mainland China are clearly cheaper than those in Hong Kong and their prices are falling. There are substantial growths in exhibition space in Mainland China during the past three years. Macao is planning to build an exhibition center. There is possible erosion of the relevance of trade fairs from the Internet and other alternative media.

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d) Micro SWOT Analysis (HKAE verses HKCEC, Kowloon Bay Exhibition Hall and Hunghom Stadium): Strengths: There is a plan to bring Chinese visitors via ferry directly to the airport. This provides great convenient to Chinese exhibitors and visitors to join exhibition and other events staged at HKAE. There is a good probability that the rental fee of HKAE is cheaper than that of HKCEC. With a high-ceiling design, HKAEs single ground floor facility offers greater flexibility to satisfy exhibitors needs than HKCEC, Kowloon Bay exhibition hall and Hunghom Stadium. Being a new facility, HKAE can be equipped with state-of-the-art technological equipments and world-class safety standards. Weaknesses: Location of HKAE is relatively more remote, and is in general more expensive and more time consuming for local visitors to travel to. HKAEs 60,000 square meter facility is relatively small and gives constraints to hold big event. In general the travel time and cost for attendees to attend cultural and entertainment activities is more. Opportunities: During the peak exhibition months, namely January, March to June, September to November, new exhibition has difficulty in booking venue in HKCEC. HKAEs exhibition space can expand to 95,000 square meters as phase 2. HKAE facility can attract exhibition that requires a different type of facility to HKCEC, e.g.: machinery and manufacturing technology, automotive, wire and cable, environmental and water treatment.

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Threats: HKTDC and HKCEC had an agreement, which limited HKTDC to organize exhibition in HKAE. HKTDC owns 50% of all exhibition business. HKCEC has very good management and is well recognized internationally. HKCEC may expand its exhibition meterage from 65,000 square meters to 90,000 square meters as its third phase expansion in the future. A number of mega exhibition owners such as Kenfair are afraid to loose their prime HKCEC location during the peak season and thus may not want to use HKAE.

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11) Intervention & Recommendation - Advertising and Promotional Plan Intervention is limited to advisory and recommendation with data and information provided by the host HKECOSA. There are two major product/service lines offered by HKAE namely the exhibition and the conference services. The differences between the two are:

Exhibition Services

Raw rental space Rental space with standard booth set-up Affiliated services (bundled customized booth design and construction, telephone lines, internet connectivity, etc.)

Conference Services

Conference Rooms Affiliated services (tables & chairs, microphones, audio-visual aids, stationery, etc.)

The advertising and promotional plan would be divided into two parts plans for advertising and sales promotion. Each of the parts would be discussed on the tactical level in details before implementation and execution.

Overview of market positioning The upcoming Hong Kong Airport Exhibition Hall (HKAE) will be officially the third exhibition and conference center in Hong Kong, a number of unique positioning propositions have to be highlighted in the drafting of the market strategies in order to create discernible competitive edges:

Vicinity to the airport One of the most apparent advantages of HKAE is its proximity to the Hong Kong International Airport. This is a unique advantage when compared to its competitors, particularly for events with short duration, such as some international conference for government officials and top executives. It would also be a

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benefit for event participants and visitors whose stay is short.

Extending the coverage of exhibitions and conferences in Hong Kong Because of the traditional exposure of the past exhibitions and conferences being in the areas of finance, information technology, medicine, services and products of light industries with little exposure in such which requires extended, open-air exhibition venues, or ones with high floor loading, HKAE can be positioned to fill these gaps and penetrate particularly into the market of exhibition and conferences for such industries as electrical and mechanical, aerospace, agricultural, etc.

Leader in cost-effectiveness The cost-base of the venue of HKAE to exhibition and conference organizers would be substantially lower than its major competitor, Hong Kong Convention and Exhibition Centre. While it may not be all-time a lower-cost choice than the Hong Kong International Trade and Exhibition Centre (HKITEC), it would present a higher cost-effectiveness with regard to the convenience of its location and the affiliated facilities available when compared to HKITEC.

Secluded all-in-one exhibition and conference complex HKAE is also positioned to be a self-contained exhibition and conference complex, the visitors of which can enjoy a range of extra-event services and facilities. This positioning proposition has to be realized by the alliance with the nearby facilities and service providers, such as with the shopping arcades and Duty Free Shoppers in the airport for providing shopping facilities and hotel facilities for accommodation. This positioning can cater to the needs of event visitors traveling with their families.

Objectives of advertising With regard to the fact that the Hong Kong Airport Exhibition Hall (HKAE) will be a new convention and exhibition center in Hong Kong, it is thus of high importance that its positioning is to be reflected in a concise and easy-to-remember catchphrase in its external21

communications across different media as the very first step of building the brand equity of the center. With respect to the locality and the necessary differentiation against its competitors in Hong Kong and in the adjacent cities, a headline that is to be used in advertising and public relations would be Hong Kong Airport Exhibition Hall the Hong Kong exhibition and convention center closest to the World and China. Amongst the various objectives of advertising, the following are of the highest importance in the creation of the copy, creativity in advertisement and the message in the communications: a) Convey information about the presence of exhibition hall itself and its features such as the total space available, facilities, advantages, promotional offers, etc. b) Alter perceptions / attitudes reflected in the promotional catchphrase above, against the misconception over the proximity of its location c) Direct actions focused mainly on the sales promotion, if available d) Give reasons for buying emphasizing on its features and benefits e) Generate enquiries presenting details of contact correspondence

Analysis of Advertising Landscape and Pre-requisites

Target audience the foremost target audience of the advertisement is the exhibition organizers. Each of these exhibition organizers possesses the right of organizing a number of exhibitions, conferences, trade shows and fairs, and they are the ones which practically determine the location of the events. Amongst these exhibition organizers, it is the top management who are the major decision-makers behind the decision over the location of the events while the middle management is the influencer in the decisions. These target audience are focused the members of the 35 certain exhibition and conference organizers organization internationally such as the Union des Foires22

Internationales (Union of International Fair) (UFI), HKECOSA in Hong Kong, SACEOS in Singapore and CETRA in Taiwan. These target audience can then be grouped into several tiers of priority:

First-tier the exhibition and conference organizers in Hong Kong. They are the ones that are most familiar with the market situation in Hong Kong and well understand the concerns associated with organizing an event in competitive exhibition venues. The first-tier targets also include the conference organizers the events of which are secluded, such as the executive conference or leadership conference

Second-tier the organizers in other countries such as Malaysia and Indonesia which is targeted an international coverage enabled by the exposure of Hong Kongs convention and exhibition industries while avoiding politically-sensitive countries to them such as Singapore; as well as international exhibition organizers targeting visitors from the Mainland China, with a view to the limitations involved in organizing events in the Mainland China and the large number of visitors from the Mainland to Hong Kong

Response The short-term response from the advertising and promotion should be the resultant organization of events in the HKAE with accompanying booking of the venues. The message in the communication should correspond to the market positioning of HKAE

Creative Platform The creative platform of the advertisement should focus on the visuals of the HKAE premises with possible captures of the included and affiliated facilities. There should be at least two creative one for the exhibition facilities while another is dedicated for the conference facilities. The copy for the advertisement should focus on its positioning, as discussed above, and the major benefits as compared to its23

competitors in Hong Kong and within the region. The positioning propositions can be used interchangeably throughout the advertising calendar with alignment with the sale promotional calendar

Communication Platform In line with the focused target audience of HKAE, the media for the communication should be targeted and focused. The media mix should be trade-focused while a mass coverage of HKAE should be restricted to the early stage right before and after its inauguration or, in public relations perspective, for the purpose of brand building. The media platform, in descending order of priority, should include (i) direct mailing or e-mail marketing (ii) trade and technical press (iii) magazines and periodicals (iv) leaflets, fact sheets and brochures and (v) mass newspapers. The media owners of both the direct mailing and trade advertisement campaigns include such publications as the magazines for exhibitors, e.g. Marketing Event of the United Kingdom, Australian Conference and Exhibition Diary of Australia, Conference & Exhibition Fact Finder of the United States, etc. In the public relations campaigns, the message in the communications should be adjusted with respect to the nature of the events such as inauguration, testimonials, etc.

Advertising and Media Mix Because of the focused nature of the target audience, the advertisement for HKAE would be restricted to print ad with possibly two separate creative for the exhibition and conference facilities of HKAE. The media mix for the exhibition facilities include the followings:

The newsletter or magazines printed by the industrial organizations for exhibition organizers, such as HKECOSA in Hong Kong, SACEOS in Singapore and CETRA in Taiwan

Trade magazines for exhibition organizers, for example, Marketing Event, Australian Conference and Exhibition Diary, Conference & Exhibition Fact Finder24

Newsletter or magazines published by world-wide chambers of commerce General business-travelers-targeted materials such as the trade publications by Hong Kong Travel Bureau

The media mix for the conference facilities include the followings:

The publications by or direct mailing and e-mail database of international thirdparty conference organizers such as Economists Intelligence Unit, dnmStrategies, etc.

The publications by or direct mailing and e-mail database of international and local organizations or professional bodies, such as the organizations for bankers, publiccertified accountants

The publications with strong reach to the executives and planners in 4As public relations firms such as the Media, Adweek, etc.

The direct mailing or e-mail database of event and entertainment organizers (for the renting of the venues for entertainment programs such as music performances, concerts, etc.)

General business-travelers-targeted materials such as the trade publications by Hong Kong Travel Bureau

Public Relations Mix To ensure the building of brand equity for HKAE, a number of public relations mix is suggested. They include inauguration event with corresponding press release, press and industrial VIP group tour, one-to-one interviews with the executives of HKAE, seminars to the regional organizations for exhibition and conference organizers, sponsorship to the educational and industrial events by UFI and adver-torial in the trade press and possibly mass media.

Timeline the communications, no matter advertisement or public relations event or announcement should avoid clashes with some major or international events or exhibitions or conferences held in competitive venues. The best time for25

communications should be the low season, if not shoulder seasons for exhibitions. It is also notable that the decision on the location of exhibitions and conferences is usually made 15-18 months beforehand while the announcement is made 12 months before the events are held. Traditional avoidance from major festivals, start and end of a week also holds. The schedule for the advertising and public relations should start 18 months before the inauguration.

Results since HKAE will be a new venue to the exhibitors and organizers, the initial response from the advertisement can be measured in terms of the number of enquiries, site visits, quotations and, if best, reservations made after the start of the advertisement campaigns

Budget and Schedule The major tool for budget control would rely on the caliber of the marketing department in the implementation of the schedule, negotiation with the advertising and public relations agency on the creative and media booking. It is of utmost importance that the advertising and promotions should start 18 months before the HKAE is officially opened, corresponding to the lead-time in the preparation of any exhibitions

Promotional Plan Introduction and Background The sales promotions associated with the promotion of HKAE should be centered on three major aspects services, products and money. In face of the strong competition from the analogous venues in Hong Kong, the several positioning propositions should be highlighted in no matter the communication message in advertisements and public relations, or in sales promotions.

Promotional Offer Amongst the two areas of positioning, cost-effectiveness is the one, which is executable and26

realizable in sales promotion. The offer should be a mix of the products, services and money aspects which manifested itself as (I) a competitive pricing on the rental costs (ii) free trial periods and (iii) special partner programs and (iv) competitive discounts. This is understood as creating a competitive edge against its local competitors, and also possibly for competitors in other cities, with respect to the fact that the average pricing of rental costs of exhibition space is twice that of its closest competitors, Singapore, with even a higher percentage when compared to those offered in Beijing, Shanghai and Taiwan. The promotional offers should be scheduled to have intermission in place in order to strengthen the call for action. (i) A competitive pricing on the rental costs The averaged US$6.0 per square meter of rental costs of exhibition space in Hong Kong, as compared to the average US$3.0 in Singapore and even lower in other regional cities. A competitive pricing has to be reduced and held valid for a certain promotional period. The initially proposed offset of 15-20% from its major competitors may not be a sufficient incentive for luring existing exhibitors (ii) Free trial periods This is to be applicable during the very first stage after inauguration of HKAE. In order not to sacrifice overtly the revenue of HKAE, these trial periods should be limited to small-scale events such as conferences and certain deliverables of large-scale exhibitions, such as overtime charge, fees for telephone lines, networking, surcharges for over-limit structures, etc.(iii)

Special partner programs These are the services in affiliation with other allied service providers such as airlines, hotel accommodation and city-bound shuttle bus or MTR. These special services can be presented as special packages on traveling and accommodation for the visitors and can be presented by the exhibition or conference organizers as an added value to the event visitors27

(iv)

Competitive discounts As an extra incentive for exhibition organizers with exhibitions held previously in competitive venues, particularly those in Hong Kong

Eligibility and Timing The eligibility of the sales promotion is straightforward for HKAE any exhibition or conference organizations. Different tiers of promotion can be given to exhibitors the events of which are at present held in other competitive venues, exhibitions originally held in other regional cities or new exhibitions. The duration of each sales promotion should range from 8-12 weeks with 4-week intermission for the re-invocation of interest. For free trials and special partner programs, the duration should be 8 weeks to allow sufficient flexibility while that for competitive discount should last longer, 12 weeks, in order to cater to the possible longer decision-making lead-time at organizers. Date Plan The overall schedule of the sales promotion is given in the tentative advertising and promotion calendar in the following section. It is notable that taken into consideration of the 9-18 months lead-time before exhibitions and conferences are being held, the advertising and promotion plan has to be started beforehand with the same lead-time before HKAE is to be inaugurated in late 2005. Support In response to the three major types of sales promotion, corresponding sales promotions materials such as leaflets, direct mail, etc. should be produced. In advertising and public relations, certain specific creative, together with vehicles such as press release can also be prepared in line with the campaigns.

Sales-related Items On top of the sales promotional items themselves, corresponding items and workflow in the sales function should also be prepared. Such items include the communication of the sales28

promotion details to the sales, administration, finance and accounting departments. Certain training focusing on the major selling points should also be communicated with the sales team. For effective evaluation of the sales promotion, the reporting practice should also involve the marketing department for adjusting and refining the advertising and promotion plans thereafter. 13) Conclusions Hong Kong has developed to be one of the leading world-class destinations for MICE industry. With major commitment by the government and the private sector, another worldclass exhibition hall would greatly enhance Hong Kongs competitive position in hosting world-class events. The recent new developments- Chinas entry into WTO, relaxation of visa requirement for mainland Chinese visitors into Hong Kong, the 2005 opening of Hong Kong Disney land and the growing integration between the city and nearby Guangdong Provinces booming Pear River Delta - have greatly enhanced the prospects for trade fairs and conventions in Hong Kong. With proper strategies in place the new HKAE would complement the existing HKCEC and would pay off in the long run. 14) Evaluation and Withdraw Marketing strategies need constant review before opening date in 2005. Further evaluation will be necessary once the operation has been started after 2005, to continue upgrading the strategy and tactic. It is more efficient and cheaper for us (consultant for present report) to continue the research before or after 2005 15)

15) References: BSG. (2002). Economic Impact of Hong Kong Exhibitions Industry. Hong Kong: Business29

Strategies Group Ltd. www.bsgasia.com DCOEM. (2003). China Exhibition and Convention Center Directory. Beijing: Economic Daily Publishing House. HKECOSA. (2002). Position Paper of HKECOSA regarding the provision of another large scale exhibition facility in Hong Kong. www.exhibitions.org.hk HK-Government-Secretariat, E. S. B. (2000). Consultancy Study on the Provision of Additional Convention and Exhibition Facilities in Hong Kong. Kearney, A. T. (2003). Position Hong Kong as Asia's Exhibition Capital. Unpublished manuscript, Hong Kong: HKTDC. MacLaurin, D., & Leong, K. (2001). Strategies for success: How Singapore attracts and retains the convention and trade show industry. Unpublished manuscript, Singapore. Porter, M. E. (1980). Competitive Strategy: Techniques for analyzing industries and competitors. New York: The Free Press. Qu, H., Li, L., & Kei Tat Chu, G. (2000). The comparative analysis of Hong Kong as an international conference destination in Southeast Asia. Tourism Management, 21(6), pp643-648. Thompson, D. (2003). Consultancy Processes - Consultancy in Practice. Hong Kong: Unpublished manuscript, PolyU DBA class-note. Zhang, W., & Go, F. (1999). The meeting, conventions, and exposition industry in Beijing: Problem and Strategies. Journal of Travel & Tourism Marketing, 8(1), pp101-110.

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