Germany vs South Korea: Trade Show Industry Compared

Introduction: Trade as Marketing and Communication

To achieve the aims of local and international trade, it is vital to make use of the functions of marketing and communication. Trade involves the profitable exchange of value between seller and buyer. Both parties benefit from trade by obtaining goods, services, or satisfaction of some other need that would not have been possible without trade. This may be due to resource scarcity, inadequate means of production, limited technological expertise, and so on. This maximization of utility increases with reduced barriers to trade across countries. To increase the profitability of trade, traders need to find new buyers or markets for their goods and services. The search for markets becomes an even more sophisticated and strategic process when traders identify market needs and then source goods and services to satisfy those needs. The trader ensures that he is able to source goods and services at the lowest possible cost to provide the best value and utility maximization to the buyer. In this way, marketing enables traders to increase the number of buyers, resulting in an increase in revenues through lower economies of scale. It is essential that demand and supply for each commodity be equal (Hunt & Lautzenheiser, 2011, p. 138). To alleviate widespread poverty during the sixteenth century, the government of England established standards for production and marketing to increase trade.

While it is important to identify new buyers and markets to expand trade, it is also necessary for buyers to be aware of the availability of goods and services. Marketing communication plays an important role in informing the market and realizing the scope for trade. The quality, accuracy, and reach of marketing communications shape the perceptions and attitudes of buyers regarding goods and services and affect the volume of trade.

Growth and expansion of trade depends on successful marketing and communication activities. The marketing and communication activities typically employed at the international level include meetings and conferences of the chambers of commerce of the countries involved, as well as meetings between trade ministers. At the private level, trade shows have been a popular and effective means of finding new markets and increasing awareness of goods and services available. International trade shows such as world's fairs have been in existence for centuries and are still organized today. With globalization, competition has increased and trade shows are a good way to get close to the market and promote goods and services. For this reason, greater amounts are being invested in international trade shows. The Expo 2010 Shanghai trade fair attracted 246 participants and 73 million tourists from all over the world (Expo 2010, 2010). Germany has been a star performer in the trade show industry and is known as the global leader in the field. Other countries are also expanding their trade show industries in line with their economic growth.

This study focuses on the trade show industry as a means of facilitating growth in trade through the exploration of new international markets. In particular, the trade show industries in Germany and South Korea will be examined. The study describes the state of the trade show industry in the two countries, discusses the unique national economic environments in which they operate, and explores the historical evolution of the trade show industry in each country to account for Germany's leading position and South Korea's growth trends.

This study was undertaken after reviewing the factors affecting trade internationally. With the advent of globalization and trade alliances like the WTO, European Union, and ASEAN, countries have become ever more economically interdependent. Developments in communication technologies have also made it easier for trade to take place between countries in increasing volumes. The extent and consequences of this interdependence are visible in the dramatic effects of the United States subprime mortgage crisis on economies around the world, demonstrating that countries depend on markets beyond their national borders for growth and trading opportunities.

Trade fairs have become increasingly common as a means to access new markets internationally. Starting with the guild fairs of the medieval period, trade fairs have taken on a sophisticated form and have increased dramatically in scope. The trade show industry has also become specialized in recent years, with trade fairs pertaining to specific industries and sectors. Germany is the world leader in the trade fair industry, for historical, political, and economic reasons. The location of Germany at the crossroads of eastern and western Europe makes it an ideal meeting place for traders to display their wares. The country's economic leadership following the Second World War has also made it an attractive market for international traders. Around 30% of companies exhibiting at German trade fairs intended to increase their budgets in 2012–2013 (Expodatabase, 2012). South Korea has also made great economic progress, as witnessed by the rise of excellent manufacturing companies such as Samsung, Daihatsu, and LG, and as a result the trade show industry there is also growing rapidly. The present study follows the growth of the industry in both countries using information from trade industry associations, economic data, and published research from online and print sources.

This study is significant because it sheds light on a very important contributor to local and international trade. Trade fairs have a long history of providing a meeting place for buyers and sellers and represent a significant channel of communication for B2B buyers and sellers. This area merits study because channels of communication between B2B buyers and sellers are limited. B2B buyers and sellers cannot use mass channels such as television or newspaper advertising; instead, personal visits and demonstrations are the common channels of marketing and communication. B2B selling and marketing activities are less highlighted in research than B2C activities. This study therefore explores a very important channel of marketing and communication in the B2B market.

The study is important for a second reason: international trade has become a cause for concern following the global recession. The economies of various countries have been affected by a decline in purchasing power. Economic recovery is said to be possible through an increase in trade and the opening up of markets (OECD, 2009). Governments are trying to find new ways of stimulating trade to increase demand in national economies and create more jobs. Trade shows can be an effective means of stimulating trade activity by bringing together buyers and sellers in a single location. This study will be useful for governments because it will help them identify the economic, regulatory, legal, and logistical issues that need to be managed to organize successful trade shows, and by using this information they will be able to promote economic growth through increased local and international trade.

This comparative study on the trade show industries in Germany and South Korea follows a systematic analysis of the most significant aspects affecting the industry in each country. The study begins with a historical analysis of the evolution of trade from the local to the international level, then discusses how trade shows evolved to facilitate growing trade between countries. It goes on to examine the dynamics of the trade show industry in modern times, including political, legal, economic, and regulatory issues. An analysis of the issues involved in organizing successful trade fairs follows, including the issue of effective booth management. The study then addresses how these dynamics affect the German trade show industry specifically, followed by a parallel discussion of the South Korean industry.

The aim of this study is to present a comparative analysis of the trade show industries in Germany and South Korea. Such an analysis would be of use to governments in both developed and developing countries seeking to enhance their capacity in developing the trade show industry. The study does not aim to provide a prescriptive guide to conducting a successful international trade show; rather, it provides a discussion of the various factors that enable the growth of the trade show industry in the two countries under study. This information can be adapted to the local environment of individual countries so that local concerns are addressed in support of developing a national trade show industry.

Literature Review: History and Theory of Trade Shows

The earliest form of international trade was probably carried out by travelling along rivers on rafts. The objects of trade were minerals available only in certain regions, which could be used to make protective headgear and tools for farming and hunting. Farming produce began to be traded later. The regions comprising Mesopotamia and the Indus Valley were important centers of trade during prehistoric times. There is written evidence from just before 3000 BC indicating that an enormous copper and grain trade flourished through these routes (Bernstein, 2009, p. 26). Trade thus became a means of cultural and diplomatic exchange between communities.

However, trade also became a cause of war in some cases. The Peloponnesian War between Athens and Sicily was motivated by a desire to expand trading posts in the Mediterranean to control the grain trade, an essential commodity that was extremely scarce in the mountainous terrain of Greece. In this way, trade played an important part in shaping the history of the world (Bernstein, 2009, p. 25).

During the Middle Ages, Western Europe became a bastion of Christianity against the intrusions of Muslims from the east. The Crusades of the tenth and eleventh centuries resulted in violent conflict, but also in increased trade between the two regions as people came into greater contact with one another. Through such international trade, communities learned to coexist in peace. The greatest impetus to international trade came during the seventeenth and eighteenth centuries when western European powers entered the age of industrialization. Along with industrialization, strong naval and seafaring traditions enabled these powers to discover new markets for manufactured goods and new sources of raw materials, beginning the age of colonization and western imperialism. This increase in economic activity stimulated intellectual thought about international trade and commerce, and thinkers like Adam Smith, Ricardo, and Keynes presented their models of national economies and theories of international trade.

Communism emerged as a major force in the twentieth century and came into direct conflict with the capitalist model of international trade. However, the power of communism waned toward the end of the twentieth century, paving the way for globalization through international and regional trade agreements like GATT, WTO, the European Union, ASEAN, NAFTA, MERCOSUR, and SAARC. Globalization encouraged the reduction of national barriers to international trade such as tariffs, quotas, and import duties, creating some tension between developed and developing countries because developed countries enjoyed technological advantages in manufacturing efficiency.

The close integration of international markets also brought about the financial integration of market economies. The industrial progress of Great Britain, which took shape during the technical changes of the Industrial Revolution (1760–1830) (Shafaeddin, 1998, p. 2), benefited from trade protection and government intervention through the Navigation Act and political command. This close integration resulted in a serious blow to the global economy when in 2008 a mortgage crisis in the United States caused a ripple effect across economies worldwide, bringing international trade to a minimum. Governments are now increasing attempts to encourage international trade through stimulating demand in order to recover from the recession.

Trade shows are also known as trade exhibitions or trade fairs, yet each embraces the same basic function of providing meeting and interaction opportunities to buyers and sellers. It is considered that exhibitions or trade fairs began 600 years before the birth of Christ. A trade show depicts "events that bring together, in a single location, a group of suppliers who set up physical exhibits of their products and services from a given industry or discipline" (Evers and Knight, 2008, p. 544). Trade fairs have a continuous history spanning long periods and dating to biblical times. In the Bible, particularly in the book of Ezekiel written in 588 BC, merchants' trading activities are highly highlighted. Some sources assert that merchants began hosting exhibitions that might be described as the predecessors of modern-day trade fairs on special religious days. The word "feria" originates from the Latin meaning "holy day" and is still commonly used to describe what we might otherwise call an exhibition or trade fair (Karan, 2008). From the time of the trade fair held reportedly in 629 AD at the Abbey of St. Denis in France, traders have enjoyed the right to levy customs and special protection from the king (UFI, 2010, p. 20).

Although trade shows go back to ancient times, the idea of the modern trade show developed from European fairs. Starting in the 1600s, unions were formed in England to train apprentices in specific industries. As unions spread across America in the 1800s, they formed the foundation of trade associations, which predictably became the architects of trade shows. It was not until 1851 that the modern international trade exhibition was first organized at the Crystal Palace in England; a similar format also evolved around the same time in Germany (Seringhaus & Rosson, 1994, p. 311). From then onward, trade shows and exhibitions have been organized on a large scale and have gone through a number of evolutionary phases to transition into their contemporary role as a marketing and communication tool.

At the start of the evolution of the trade show as a strategic marketing tool, some companies did not fully comprehend its potential. Instead of realizing the marketing opportunities a trade show offered, many companies simply followed the lead of others and exhibited at national trade shows. As the trade show industry grew, companies began to understand that trade shows facilitate open communication and enable direct interaction between companies and their customers. As stated by Kim, "the trade show industry has transformed into an international multi-billion dollar business" (Kim, 2008, p. 2). Through strategic networking, trade shows help a company identify and develop a network of potential buyer contacts and strengthen relationships, increasing potential sales opportunities.

With the global expansion of the trade show industry and ensuing international interest, trade shows have not only proliferated but have matured into specialized events with an emphasis on both quality and quantity. Pitta et al. (2006, p. 159) stress that understanding trade shows potentially enhances the success of a company's promotional efforts. In the past, however, exhibitors merely took part in trade fairs without having in place a specific strategy or goals for promoting their business.

The purpose of participating in a trade show is not to make sales, but to create sales leads. This is why it is critical to arrange a trade show strategy before the event, including a plan for following up on leads afterward. Key planning steps include organizing a pre-show promotion — letting existing and prospective customers know how to find the company's booth through direct mail, participation in the host organization's promotional efforts, or advertising — and setting a budget that covers booth space, phone and electricity costs, and staff time (Edwards, n.d.).

Trade show expenses are the second largest item in the business marketing communications budget after advertising, accounting for nearly one-fifth of the total budget for U.S. firms and approximately one-quarter of the budget for European firms (Gopalakrishna et al., 1995, p. 75). Over the years, trade shows have evolved from local events to international and global events, and there has been a great deal of specialization in the trade shows being organized.

Many trade shows are focused events catering only to traders in a limited geographical area. These firms are typically small or medium-sized B2B companies that need such events to make new contacts and expand their business. These focused events are usually one-off stand-alone events rather than recurring features of a country's trade show calendar. The firms that participate in them benefit from making an initial set of contacts that can be developed and nurtured for the future. Some trade shows cater to the marketing and promotion needs of just one company — a novel concept illustrated by the Apple Expo organized by Apple Computers to promote its new products (Viardot, 2004, p. 224).

Some trade fairs take place at the industry level. These are usually annual events at which large and small B2B firms relating to a specific industry — such as construction or automobiles — can come together and interact. These trade fairs also receive media coverage, which expands their reach to customers and international trading partners. Participants benefit from maintaining contact with existing business partners as well as making new ones, and can learn about the offerings of their competitors.

Along another dimension, trade fairs may be organized nationally or internationally. Some even take the form of a town fair, combining cultural events, religious ceremonies, and trade promotion into a single community activity. On a national scale, the trade show provides larger opportunities for members of an industry to display their products to the public and their customers. On an international scale, trade fairs offer the most attractive opportunities for growth in the era of globalization. These international trade fairs are hosted by a home country that arranges the venue and logistical facilities. Seminars by international guest speakers update participants from different countries on global industry challenges, and a much larger number of visitors attend, contributing to the development of both tourism and the trade show industry (Hiller, 1995).

A number of marketing theories can be applied to the trade show industry to describe how the objectives of trade shows can be met successfully. Some of the most relevant are internet marketing, guerrilla marketing, and experiential marketing.

The internet has made it extremely easy for trade show participants to reach wider audiences. Once connected, it is easy to guide a prospect through an online presentation or colloquium (Silverstein, 2002, p. 323). The online trade show can be a way of reaching customers who have not been able to attend because of time constraints or geographical distances. The show can be streamed over the internet, and a video of the trade show can later be played on the organizer's website so that online visitors may access the trade show at their convenience. Organizers can also benefit from online advertisements placed by companies wishing to advertise their services to online visitors, and communication links can be provided to facilitate interaction between exhibitors and virtual visitors.

Guerrilla marketing involves coming up with innovative and interesting ways to communicate the message to customers. Most trade exhibitors follow traditional modes of communication and marketing at trade shows, which is a poor response to the increasing power of customers and competitors. It is common for guerrilla marketers to work extra hard to achieve marketing results while spending less money (Levinson, 2007). Recent developments in communications technology have made social media communications instantaneous and more personal, helping companies differentiate themselves from competitors and assuring customers of constant access to the company at all times.

Experiential marketing is a novel approach to making memorable impressions on consumers. Modern consumers are less trustworthy of printed promotional materials and verbal claims made by exhibitors, and are less convinced by advertising. What today's customers seek is an experience in which they can try a product or service before deciding to purchase it. Instead of a display area, they prefer a demonstration or hands-on experience that allows them to see, hear, feel, and taste a product (Allen, 2005). Experiential marketing at trade shows enables visitors to interact with the product instead of relying on printed promotional material, with booth personnel playing a facilitating rather than instructional role. The visitors enjoy the autonomy that experiential marketing gives them, and the scope for the use of technology at trade shows is increased as exhibitors develop innovative modes of interaction.

With increased globalization, companies cannot grow without influencing or being influenced by companies from other countries. For any business looking to expand internationally, the first option is usually exporting products to a foreign market. This is the safest option because the company retains its manufacturing operations locally, reducing the risk of capital loss in a foreign country. Participating in trade shows in the foreign country is a good way to test the waters before making a large investment in developing export facilities. Firms usually consult with people who have exhibited at previous trade shows about the usefulness of participating in the show (Miller, 1999). Selected merchandise can be taken to the trade show so that visitor responses can be gauged and incorporated into product design.

According to Czinkota and Ronkainen (2007, p. 217), it is essential for the organization to have a marketing orientation in order to exploit the opportunity of participating in international trade shows. Simply stocking a trade booth with merchandise reflects a sales approach and may not result in a successful export strategy.

The trade show industry is undergoing major innovations as companies have recognized its importance as a strategic tool. The trade show industry started to develop from the biblical era (Hanlon, 1977), when farmers and traders would gather at religious fairs to offer their merchandise to visitors. When this activity resulted in increased business for traders, strategic locations were selected so that traders from different areas could access the fair. This gave rise to the trade fairs of the Medieval period, held at Brie and Champagne in France, where traders came from across Western Europe to display their merchandise and take advantage of France's growing economic and political power.

With the growth of industrialization in the seventeenth and eighteenth centuries, the trade show industry assumed great importance as an opportunity to display new inventions and technological innovations. Trade shows allowed exhibitors to display manufactured products and industrial equipment to farmers and manufacturers. James Kay's invention of the flying shuttle revolutionized the weaving industry, and new farming machines — including threshers, harvesters, and combine harvesters — were also developed. Trade shows provided inventors of the Industrial Age an opportunity to find investors and buyers for their inventions, encouraging the development of technology.

Trade shows continued to be organized regularly across Europe and North America during the nineteenth and twentieth centuries. The Crystal Palace trade fair in London and the Chicago World's Fair were notable events in the international development of the trade fair industry. The development of modern means of transport played a vital role in bringing about the internationalization of the trade show industry and provided opportunities to develop tourism and promote cultural exchange.

With time, the importance of the trade show industry in the eyes of exhibitors diminished. Advertising through print, radio, and television made participation in trade shows seem redundant. Yeshin (2006, p. 216) states that only 23 percent of executives find trade shows effective. Traders typically set up a stall and distributed printed brochures, samples, and giveaways — an approach that prevented them from exploiting the unique opportunity of face-to-face interaction. In 1980, the United States economy went into decline, reflected in low participation rates, and the trade show industry went into a corresponding decline.

In recent times, globalization has renewed interest in trade shows as businesses aggressively explore every possible opportunity to communicate and promote their merchandise to prospective customers. This has led to novel approaches to exhibitor–visitor interaction, such as those described in the sections on guerrilla marketing and experiential marketing. Businesses have discarded the traditional sales outlook in favor of a more proactive marketing approach toward participation in trade fairs.

The trade show industry has made significant contributions to the development of international trade. It provides a cost-effective way of establishing relationships with new clients and maintaining relationships with existing ones, and has allowed traders to seek opportunities for international collaboration through exports, mergers, and joint ventures. Geigenmuller (2008) states the importance of virtual trade fairs by explaining that they are highly effective in creating value for participating organizations because they enable building relationships and networks with a larger number of people than a live event could accommodate.

Methodology

At the same time, the contribution of live trade shows has not declined. Schuldt and Bathelt (2011) use the term "global buzz" to describe the rich nature of information exchange that takes place among the large number of buyers and sellers gathered at a trade fair. This exchange is an enriching experience for both parties because it helps them improve their relationship networks and solve problems.

Trade shows offer a very important benefit to small and start-up companies. They offer a good opportunity to make new contacts, obtain market information, make sales, and gain visibility (Hultsman, 2001). Evers and Knight (2008) describe the benefits that small firms can enjoy through participation in the trade show industry, which acts as a link between small firms and possible international business partners. Small firms are exposed to greater environmental risk and uncertainty than larger, more mature firms, and the support offered by reliable networks formed through trade fair participation can enable small firms to participate in international trade.

The trade show industry also contributes to the development of the local tourism industry. More than 73 million people visited Shanghai to attend the Expo 2010 Shanghai trade fair, giving a boost to the tourism industry. The government spent $700 million on renovating the Bund riverfront and $45 billion on upgrading infrastructure (China Daily, 2010).

The trade show industry plays a very important role in the marketing strategy of any business, offering a unique platform to pursue marketing objectives aligned with the marketing mix — product, price, promotion, and placement. The exhibitor can use trade shows to promote any kind of product, from automobiles and construction equipment to banking, computing, and educational services. Trade fairs also allow exhibitors and visitors to compare prices with companies manufacturing similar products in different countries, enabling improvements in manufacturing and selling processes.

Within the trade show industry, marketing activities are geared toward securing increased participation from the maximum number of participants. For regular annual trade fairs, the event is promoted through a number of media channels throughout the year, with a theme communicated through a slogan or logo. If the trade fair is related to a particular industry, the call for registration is sent out along with an overview of the year's theme and the profile of likely participants. Marketing decisions center around the theme, the profile of attendants, the price charged for booths, and the location of the fair.

A great deal of planning also goes into managing the exhibitors' own participation. Exhibitors have to determine their goals — which may include acquiring new customers, touching base with existing ones, creating awareness about new products, conducting market research, improving company image, developing new distribution channels, or expanding into international markets (AUMA, 2008, p. 11). The budget for the exhibition must be set, the type of stand chosen (row, corner, end, or block), the selection of products to promote decided, and logistics for transporting merchandise arranged. The selection of personnel to represent the company is equally important; the booth staff should be presentable, motivated, courteous, and technically knowledgeable, with adequate training provided before the trade fair. Exhibitor teams also need in place a mechanism for evaluating performance, with appropriate measures of success chosen — for instance, evaluating success solely by the number of brochures given out does not provide a valid assessment of the participation effort.

The research conducted for this paper is designed to address the question of identifying the similarities and differences between the trade show industries of Germany and South Korea. The trade show industry is an area of marketing strategy that has not received much attention in academic research, creating a dearth of academic literature on the subject. As a result, the research makes use of available literature from scholarly databases including EBSCO and Emerald. This exploratory research provides the literature review and guides the direction of research on the topic. During this phase, the research focuses on obtaining information about international trade and the role of trade shows in its growth, as well as the historical evolution of the trade show industry.

In the next phase, information about the trade show industries of Germany and South Korea is obtained from electronic sources, including the websites of trade show associations in the two countries, websites of popular and successful trade shows hosted in these countries, and online newspapers and magazines. Data about the economic environment has also been obtained from online sources to analyze the factors affecting the growth of the two trade show industries. Because of the need for credibility, care has been taken to use only reliable and authentic information from online sources.

The Global Trade Show Market and Germany's Trade Show Industry

Because the trade show industry has largely been ignored in academic literature, updated quantitative data for the industry is not readily available. Academic research on the trade show industry in South Korea is negligible and poorly available. This study is therefore based on a qualitative exploratory approach using a variety of secondary sources including books and official websites. The qualitative information used will be obtained from credible official resources such as the Association of the German Trade Fair Industry (AUMA, 2010, p. 2). The interpretation of information and the recommendations proposed will be based on logical analysis.

In this paper, the terms "trade show" and "trade fair" are used but should not be confused, as they have different meanings. A trade show is an event where buyers and sellers related to a specific industry interact to increase product awareness and expand their networks — for example, information technology trade shows or construction industry trade shows. Trade fairs are wider and more generalized in scope. Trade fairs may also be specific to an industry but are open to the general public and have entertainment programs as part of their itinerary (Bly, 1998, p. 359).

The definition of the trade fair's purpose forms the basis for subsequent measurement of success. Quantitative trade fair objectives (such as trade fair sales) as well as qualitative trade fair objectives (such as information procurement and image cultivation) should be defined prior to the fair. Quantitative research generates data in the form of numbers while qualitative research tends to generate data stated in prose or textual form (Garbarino & Holland, 2009, p. 7). Quantitative trade fair objectives are analyzed by measuring the increase in the number of sales concluded or the increase in turnover through sales volume growth or the realization of new price conditions.

Qualitative trade fair objectives include making contacts and collecting market information. These procedures include making contact with local and foreign clients, acquiring new clients, strengthening and cultivating existing client relations, reactivating inactive clients, cultivating press contacts, and acquiring partners, distributors, and suppliers.

The data used in this study are obtained from a number of online and print sources. The data consists of conclusions arrived at by researchers in their studies on the trade show industry, data about the trade show industry in specific countries from official websites and reliable online news sources, and economic and national data from online sources. Books on the subject are also consulted to broaden understanding of the contextual factors affecting the growth of the two industries.

The data will be analyzed in the light of research findings. The data obtained for each country will be compared with the conclusions arrived at by researchers, and any deviations will be discussed. The information about the specific industry will then be compared in the light of data available about the economic and business environment of the individual countries. This will help determine how the trade show industry is influenced by government policies and the financial performance of various industries. The information about the two industries will then be compared to identify common as well as distinguishing features.

Germany is the leader in the global trade show market and has shown remarkable growth in the past few decades. A major setback came after the terrorist attacks on the World Trade Center in 2001, after which the global trade show industry — including the German trade show industry — went into a decline. However, this decline lasted only a few years and the global trade show market started showing signs of recovery in 2003. The total revenue earned by the German trade show industry in 2000 was 2.49 billion Euros, which had dropped to 2.20 billion Euros by 2003. Recovery was shown in 2008 when total revenues from both local and foreign trade shows amounted to 2.89 billion Euros (Roland Berger, 2009).

In 2008, the global trade show market was hit by another setback: the global financial crisis originating in the United States had a domino effect on virtually every developed economy. The decline in the trade show market during this period can be illustrated by the Society of Motor Manufacturers and Traders' cancellation of its participation in the 2010 British International Motor Show, shortly after which the show itself was cancelled due to widespread participant withdrawals (Roland Berger, 2009). The World Trade Organization described the global decline in international trade as the biggest contraction in trade after the Second World War. In 2008, the exhibition industry in the United States contracted by 3.1%, whereas it had been growing at an annual CAGR of 1.8% since 2000 (Roland Berger, 2009).

Some recovery was witnessed from 2010 onward, but the areas of growth were different from traditional players. Countries like China, India, South Korea, and the United Arab Emirates showed increased trade show activity because of their vibrant economic growth and abundant resources. The share of Germany in the global trade show market was 17% in 2007 and was expected to reach 21% in 2012 because of hosting a large number of trade show events throughout the year. The share of Western Europe and North America was expected to decrease from 35% and 23% in 2007 to 32% and 21% in 2012 respectively, while the share of Asia was expected to increase from 17% to 18% (Roland Berger, 2009).

The industry showed an overall CAGR of 3.1% from 2000 to 2012. Asian trade show markets grew at an average rate of 5.3% per annum. The United Arab Emirates showed the most dramatic growth in hall capacity between 2006 and 2010 at 115%. Hall capacity in South Korea grew by 41%, in India by 33%, and in China by 18%, while Germany as a mature market showed a 5% growth (Roland Berger, 2009). There was also increased consolidation through mergers and acquisitions, with around eight to twelve of the largest players controlling the global trade show market. The largest, Reed Exhibitions, employs more than 3,000 people, operates through a network of 33 offices worldwide, organizes events for around 44 different industries, and organized 500 events in 39 countries during 2011 in which more than 6 million participants attended (Reed Exhibitions, 2011).

Trade shows facilitate interaction between buyers and sellers (Morrow, 1997). Marketing at trade shows is aimed at reaching buyers who cannot be reached by other marketing tools (Bello, 1992), and at achieving a variety of selling and non-selling targets (Bonoma, 1983). Trade shows offer opportunities for companies to go beyond transactional selling, but these opportunities are seldom pursued as aggressively as they should be (Blythe, 2002). Most exhibitors confine their trade show marketing activities to selling — personal selling and sales promotions by way of discounts — and fail to exploit the full potential of the trade show. Companies also do not have adequate ways of assessing trade show effectiveness (Herbig et al., 1994), particularly in non-selling activities. This has been described as the problem of "investment accountability" (Gopalakrishna et al., 1995). In addition to selling activities, providing a high quality of service based on interactivity, physical environment, and outcomes is also important (Brady, Cronin, & Brand, 2002).

Most non-selling activities involve interpersonal communication between the exhibitor and the visitor. Hansen (1999) has stressed the importance of relationship marketing in trade shows. Trade shows, in fact, provide a much better opportunity to communicate with prospective customers than television or print advertising because visitors are in a receptive frame of mind. Moreover, the communication model proposed by Blythe (2002) involves active participation from both parties rather than a one-way transfer of information from exhibitor to visitor.

Successful trade show marketing needs careful planning and systematic execution. Lee and Kim (2008) categorize the marketing activities of the exhibitor into three stages: pre-show, at-show, and post-show activities. The pre-show marketing activities relate to the preparation and promotion that put both the exhibitor and visitor in a receptive frame of mind before actual interaction takes place, including "quantifying show objectives, pre-show promotion, and booth staff training." The at-show activities include "size and location of the booth along with the density of the booth staff personnel." The post-show marketing activities include assessment of trade show performance and follow-up with prospective customers. Lee and Kim (2008) identify four main marketing objectives of trade show exhibitors: "sales activities, image building activities, information gathering activities, and relationship maintenance activities." They found that pre-show, at-show, and post-show marketing activities help exhibitors achieve their marketing objectives in a reliable way.

Trade shows need certain essential components to be successful. Given that German business culture places a high value on thoroughness, directness, and detail, it is essential that German trade fairs be organized with the utmost care for all of these components.

The first component is the location and timing of the trade show. For annual events like CeBIT in Hanover, the timing is known well in advance. In terms of location, the trade show should be organized at a venue close to the airport so that foreign exhibitors and visitors can access it easily, and it should have cargo handling facilities and access to ports and railway stations. In Germany, the Hamburg port has 880 connection points linking it to the railway network (Hamburg Port Authority, 2010). The most popular trade show venues in Germany are at Hanover, Frankfurt, Düsseldorf, and Cologne because of their modern facilities and well-developed infrastructure.

Exhibitors follow a registration process by submitting a form on the organizer's website. The people attending the trade show are also important; Kijewski et al. (1993) state that firms think about the quality of attendance at trade shows when deciding whether to participate. The exhibition booth is another key component. When registering, exhibitors may either rent or buy a booth; the location of the booth within the hall is a crucial aspect of success. According to Kirchgeorg, Springer, and Kastner (2009), trade shows are opportunities to communicate with visitors, so the booth should reflect the exhibitor's communication strategies. Ideally, the booth should be placed close to the entrance and exit points of the exhibition hall, and selecting a booth near the refreshments area is also a good strategy for attracting maximum visitors.

An essential component of German trade fairs is pre-show marketing. American businesses spend around two-thirds of their marketing budgets on direct mail and email promotion of their trade show participation to prospective and existing customers, with average attendee marketing expenditure of $247,000 (CEIR, 2009). This shows the importance of direct marketing for German companies who perceive the United States trade show industry as an important competitor. The effectiveness of pre-show marketing determines the extent to which an exhibitor meets quantifiable objectives. Many German companies are making use of technology, including social media platforms such as Facebook, Twitter, and LinkedIn, to announce their participation and inform visitors of their preparations. Signage — including banners, displays, and stands — is another very important component, as it helps visitors identify the presence and location of the booth. German firms are also making use of the Internet to reach a larger number of visitors from all parts of the world, and the popularity of virtual trade fairs is enabling many exhibitors to expand into the international market.

Germany is one of the leading economies and one of the largest trading nations of the world. The country was the world's largest exporter from 2003 to 2008, when it lost that position to China (Economic Intelligence Unit, 2010). In 2009, because of the global economic recession, the value of German exports was 808.2 billion Euros, a decline of 17.9% from the previous year; imports similarly declined by 16.4% to 674 billion Euros. Three-quarters of Germany's exports went to European countries in 2009, while 14% went to Asian countries and 10% to the United States. Exports to France, worth 81.9 billion Euros, were the largest for any single country, while exports to China grew by 7% to reach 36.5 billion Euros (Economic Intelligence Unit, 2010).

Free trade is the cornerstone of Germany's trade policy. The country abides by import restrictions imposed by the European Union but applies few restrictions on imports itself, monitoring closely only the import of sensitive goods such as nuclear material and armaments. The government supports international trade by offering export credit and insurance facilities. Germany follows the European Union policy on tariffs, applying ad valorem taxes on the c.i.f value of imports from outside the EU, while no duties are applied on goods from EU member countries or from countries in the wider European Economic Community, including Iceland, Liechtenstein, Norway, and Switzerland (Economic Intelligence Unit, 2010).

In 2003, Germany placed restrictions on the import of textiles from China to protect its own textile industry, but following successful negotiations the restriction was limited to a few textile products and fully lifted in 2009. There are also regulations governing the import of steel from outside the EU, which requires a special import license from the German Federal Office of Economics and Export Control. In an unusual case of restrictions, Germany banned the import of genetically modified crops from the United States in 1999, lifting the ban four years later in 2003 (Economic Intelligence Unit, 2010).

The export policy of Germany is relatively relaxed. All exports are exempt from taxes, although there is a restriction on the export of "dual use" goods to countries where they may be used in acts of terrorism or to disrupt security. The government operates the Hermes program to offer export credit and insurance to exporters in two arrangements — public-buyer and private-buyer — providing coverage for exports to a certain country for a specified time period (Economic Intelligence Unit, 2010). To facilitate free trade, the government has established eight duty-free ports in the country. The largest are situated at Hamburg, covering 102 hectares, and at Bremen, covering 45 hectares. These ports are equipped with modern facilities for loading, discharging, and storing cargo. The Hamburg port, established in 2005, connects to 950 ports in 178 countries and is ranked third among European ports, handling around 12,000 vessels per year (Hamburg Port Authority, 2010).

The German trade show industry possesses a unique blend of features that together contribute to making it the leading trade show industry in the world (AUMA, 2007, p. 24). Germany is a market economy where private enterprise is encouraged and the government does not interfere excessively, fostering a competition-oriented business environment. There are around 59,000 B2B exhibitors in Germany, generating a turnover of 3 billion Euros every year. The presence of a vibrant Association of the German Trade Fair Industry (AUMA) helps to facilitate and organize the activities of various trade show organizers, and because of the enabling environment it provides, organizers and exhibitors in Germany enjoy a healthier relationship than in any other country in the world.

The German trade show industry is also special because it organizes the largest number of trade shows annually — around 150 per year by AUMA members (AUMA, 2011). Because of the volume of trade shows organized each year, trade show professionals in Germany are the most experienced in the world, possessing high levels of analytical and organizational skills and specialization in areas such as marketing, financial planning, execution, sales, and technology management. This is why many international exhibitors prefer holding their promotional events at German trade shows.

The German trade show industry has a noticeable presence in other countries as well. AUMA has around 450 information offices in several countries and maintains representatives in 150 countries (AUMA, 2011), enabling it to secure the highest levels of international participation in its trade shows. Around 50% of the participants at German trade shows are international exhibitors, and around 30% of visitors are international (AUMA, 2011). Another special feature is that German trade show organizers collaborate closely with exhibitors in a long-term relationship orientation (AUMA, 2011) and provide a number of support services including travel booking, public relations, and pre-show promotional activities (AUMA, 2007, p. 25).

Various geographical and economic factors converge to create a favorable situation for the German trade show industry. Germany is located in the center of one of the largest single markets in the world, providing access to 450 million consumers (AUMA, 2011). Germany boasts 22 trade show venues with a total hall space of 2.7 million square meters. Some of the largest by internal hall capacity are: Hanover at 466,765 square meters; Cologne at 284,000 square meters; Frankfurt at 255,678 square meters; Düsseldorf at 262,704 square meters; Munich at 180,000 square meters; and Berlin at 160,000 square meters (AUMA, 2011).

According to the Association of the German Trade Fair Industry (AUMA, 2011, p. 16), the German trade show industry is the largest in the world. Around 150 international trade shows are organized in Germany each year, attended by around 160,000 to 180,000 exhibitors and 9 to 10 million visitors annually. More than 50% of the annual trade fair exhibitors come from outside Germany, and 75% of these international exhibitors come from countries outside Europe (AUMA, 2007, p. 55). More than a quarter of visitors are from outside Germany, and 20% of these international visitors come from beyond European borders (AUMA, 2007, p. 56).

Trade show organizers in Germany enjoy an annual turnover of more than 3 billion Euros (AUMA, 2011, p. 17). In addition to the 150 international trade fairs, a large number of regional trade fairs also take place within Germany, with around 50,000 exhibitors and 6 to 7 million visitors attending these regional trade shows each year (AUMA, 2011, p. 16). Out of Germany's 22 trade show venues offering 2.75 million square meters of floor space, 10 venues offer more than 100,000 square meters of floor space, making them highly appropriate for large international exhibitions, while around 7 venues offer floor space within 50,000 square meters for smaller trade shows (AUMA, 2011, p. 16).

German businesses spend around 12 billion Euros every year on trade shows (AUMA, 2011, p. 16) and allocate around 40% of their communications budgets to them (AUMA, 2011, p. 17). This investment stimulates the local economy and increases economic output by 23.5 billion Euros (AUMA, 2011, p. 16). The trade show industry in Germany currently supports 226,000 jobs.

The contemporary German trade show has come a long way from its medieval origins, having evolved in line with the growth of German industry into one of the most developed in the world (AUMA, 2007, p. 24). Contemporary German trade shows are extremely specialized, featuring well-known events in industrial products such as production machinery, printing equipment, automobiles, and office equipment. They are international events, with recent years showing increased participation from Asian countries. Contemporary German trade shows have also embraced technology, with virtual or online trade shows becoming common, allowing them to reach audiences unable to attend the live show because of distance or busy schedules. They typically span almost a week to allow a greater number of exhibitors and visitors to engage in profitable interactions, and are organized in well-designed, state-of-the-art venues that set the standard for the global trade show industry. Germany is a business-friendly country, and foreign firms find it easy to participate with almost no regulatory barriers to the smooth flow of the proceedings.

Germany enjoys a leading position in the global trade show industry. Even after the decline following the global financial crisis, the German trade show industry recovered quickly within two years, which is evidence of the strength and resilience of the industry. Part of Germany's success lies in the strategic location of the country, situated in the middle of the European market and easily accessible by exhibitors from Asia, Africa, and America as well as from all over Europe (AUMA, 2007, p. 20). Germany's role as the power center of the European Union also makes it an attractive trade show destination for international businesses looking to enter the European market.

In 2010, a total of 2.5 million foreign visitors came to participate in trade shows in Germany, almost the same as the 2.6 million international visitors in 2008 — proof that the German trade show industry has successfully recovered from the decline in global economic activity (AUMA, 2010). Around 500,000 of these visitors came from outside Europe, representing around 20% of all foreign visitors. Around 175,000 visitors came from South Asia, East Asia, and Central Asia (AUMA, 2007, pp. 22–23). Country-wise, the largest participation in 2010 was from the Netherlands at 250,000 visitors, followed by Australia at 200,000, and Italy at 180,000 (AUMA, 2010).

In terms of hall space, 2.7 million square meters was rented out to national and international exhibitors in 2011, still an improvement over 2009, when the space rented declined by 4% over the previous year. For the coming years, ambitious plans include adding about 22,000 square meters of hall space by 2013, with 180 million Euros spent on expansion in 2009 and another 60 million Euros invested in 2010 (AUMA, 2010). In 2010, the German trade show industry hosted around 145 events with a 3.7% growth in the number of visitors compared with 2009. The German trade show industry also organized 226 trade fairs in foreign countries in 2010 — an increase from 211 in 2009 — involving around 2 million square meters of hall space and 86,000 exhibitors (AUMA, 2010).

The Frankfurt Book Fair is the largest book fair in the world. Every year in October, publishers, retailers, authors, and literary agents come to Frankfurt to take part in the oldest trade show relating to the publishing world, with origins dating back to the fifteenth century. The book fair was revived in 1949 and has since become a major event of the global publishing industry. According to the official website (Buchmesse, 2012), the annual event is attended by 7,400 exhibitors from more than 100 countries and around 280,194 visitors from all over the world. Publishers find this the ideal event to expand their markets and learn about the latest industry trends, such as digital publishing and the market for electronic books. Access to the event is extremely easy as the city is connected by several air routes to almost every part of the world.

The Hanover Fair is the largest industrial trade fair in the world. The event takes place every year in the city of Hanover and was first organized in 1947 as a means to stimulate exports after the country's economy had been devastated in the Second World War. Exhibitors and visitors come from all over the world to learn about the latest industry trends and products. The event is organized by the Deutsche Messe trade show organizer (Deutsche Messe, 2012).

Drupa is the largest gathering of exhibitors from the printing industry in the world. Organized every four years in Düsseldorf, it has made the city an important hub of the global printing industry. All the high-profile companies in the printing industry attend, including Kodak, Xerox, Canon, Agfa, and Hewlett-Packard. The last event was organized in 2008 and was attended by 1,900 exhibitors from 54 countries, with almost 400,000 visitors (Drupa, 2012).

CeBIT is the largest IT-related trade show in the world. It was historically part of the annual Hanover Messe industrial trade fair but became an independent annual event in 1986 because of the immense growth in the IT field. The name stands for "Centrum für Büro und Informationstechnik" (Center for Office and Information Technology). In 2005, the show hosted more than 6,000 exhibitors, of which more than 3,000 were foreign exhibitors from 68 countries (CeBIT, 2006). CeBIT offers an international platform for comparing ideas on current industry development, networking, and product presentations (Deutsche, 2006, p. 1). The success of CeBIT in Hannover has motivated Deutsche Messe AG to market the CeBIT idea outside Germany using the slogan "CeBIT Worldwide Events."

German business people think and plan on a long-term basis. It is very rare for them to jump into a new idea quickly. German businesses typically have committees that meet to discuss the implications of new programs, and there is a traditional hierarchy of management approvals that must be acquired. Reactions can take up to six to ten weeks — not because of a lack of interest, but because it is difficult to hold impromptu internal meetings, as German business people have many appointments and business trips, and the German system also includes longer vacations and many public holidays.

German businesses are also slow to adopt new ideas and are often not enthusiastic about new business ventures. However, once a business relationship is formed, loyalty is strong. Contracts are not necessarily lengthy documents; it is common for a contract signed by two parties to be followed by a handshake that implies acceptance of the standard code. German business is sometimes governed by a concept known as "staying with the colors," meaning that once a deal is made with an importer, one becomes a partner in that activity and is restricted from doing business with direct competitors. Advertisements in Germany are not emotionally driven; it is forbidden to denigrate a competitor's product in an advertisement or in sales talk, and direct comparisons are restricted (Fein, 2010).

The German business culture is shaped by a variety of historical influences. The most important political influence on German attitudes and culture is the Second World War and the alienation the country faced after its defeat. The hyperinflation of the 1920s is also an economic event that has shaped expectations from German businesses and economic policy makers. German society is based on an ideal of division of labor, leading to a desire for specialization in all areas of social activity, including business. Right from school, children are made to specialize in specific areas, so German businessmen tend to possess specialized knowledge in engineering or technology (Lynn, 1997).

German businessmen are known for their meticulous nature and attention to detail. They need complete information and knowledge about minute details before making decisions, which requires patience on the part of their international business partners. They place a higher priority on content than on form, and this focus on the content of the message rather than its delivery often leads to perceptions of Germans as being rude and impolite, when in fact they value truth and honesty. German businessmen are brief and concise in their messages, which may appear curt to businessmen from other cultures, and value assertiveness in communication — a general characteristic of German society that may conflict with the norms of courtesy valued in other business cultures (Lynn, 1997).

German business culture is male-dominated and respects status and authority, with power coming from position and experience rather than from access to information or possession of specific skills. Despite their emphasis on precision and specialization, German business executives realize the importance of seeing the big picture and will spend a considerable amount of time analyzing complex business situations. German business culture is conservative and values thorough analysis over innovation. Because of the need for security — attributable to their political history — German businessmen are generally risk-averse and may require a large amount of information and analysis to evaluate business opportunities. They prefer long-term agreements with business partners, which requires evaluating all possible risks before entering into new arrangements (Lynn, 1997). Punctuality is an important part of German business culture and is interpreted as a sign of the reliability of a potential business partner, which is why German businesses may tie payment for a business contract to completion of contractual obligations by a specified deadline (Kramer and Herbig, 1994).

A great set of institutional and policy reforms in the early 1960s are considered to have contributed to South Korea's extraordinary economic performance. The ascension of Park Chung Hee to power in 1961 brought about reforms in trade policy (Connolly & Yi, 2008, p. 2). He believed that Korea needed to begin exporting but recognized that the country had few natural resources. This shifted trade policy from an import-substitution focus to one focused on export expansion. In the early 1960s, Korea abolished levies on imported inputs and capital goods, except where these imports were used to manufacture goods sold domestically, creating a crucial export-oriented policy incentive (Connolly & Yi, 2008, p. 2).

Beginning in the 1970s, Korea engaged in an extensive, gradual reduction of tariff rates from about 40% to 13%. The growth theory underlying the Cass-Koopmans model and the trade theory of the Ricardian model both informed this period of policy development. Lower tariffs raised efficiency by facilitating specialization. The existence of multiple stages of production deepened the degree of specialization, elevating total factor productivity (TFP). The combination of TFP increases and capital accumulation resulting from trade liberalization led to an increase in per capita GDP (Connolly & Yi, 2008, p. 4).

Since 2003, the government has been entering into free trade agreements with other countries. The most significant was the free trade agreement with the United States, made in 2007, which aimed to reduce import tariffs in both countries by 95%. In 2010, the value of total exports was $466.3 billion and the total value of imports was $417.9 billion (Economy Watch, 2010). Since 2000, traders do not need to notify the government before taking part in international trade, a policy move that has helped make international trade less cumbersome for small and medium-sized traders. International traders are also not required to register with the Korean International Trade Association (Economic Intelligence Unit, 2011).

The government of South Korea typically encourages exports of informational and communication products, chemicals, and machinery and equipment. In 2010, informational and communication products made up 11.1% of total exports, chemicals accounted for 9.5%, machinery and equipment for 9.2%, and semiconductors for 8.9%. The largest item of import was crude petroleum at 17.3% of total imports. Country-wise, China is the largest trading partner, with 23% of South Korea's exports going to China in 2010. The United States was the second largest export partner at 10%, with Japan third at 6.9% (Economic Intelligence Unit, 2011).

In addition to exports, the government encourages foreigners to invest in the country through the Ministry of Knowledge Economy. The government also passed the Act on Trade Adjustment Assistance in 2007, under which exporters can apply to the government for reimbursement of losses incurred in export transactions with parties located in countries with which South Korea has a free trade agreement. The government has also facilitated traders by opening electronic channels for communication with government and trade bodies, and has implemented e-commerce initiatives such as the e-trade platform and UTrade Hub as a single stop for online services in international trade (Economic Intelligence Unit, 2011). Export taxes are nonexistent in South Korea, which is one reason why the government has been successful in liberalizing exports. Import duties on goods used in the manufacture of export goods are also reduced as an incentive, and free trade zones have been established across the country (Economic Intelligence Unit, 2011).

South Korea functions as a market economy and is a shining example of the successful economic policies of its successive governments. After the division of the Korean peninsula in 1953, South Korea adopted a capitalist model while its northern neighbor followed a communist political economy. The area where there is the greatest extent of economic freedom is in exports: the government has a liberal export policy with several incentives offered to South Korean businesses to increase their level of exports. Exporters are allowed to place their export earnings in foreign banks or invest them in foreign securities. At the same time, there are restrictions in place that limit the freedom of importers. The import of pharmaceuticals and medical devices requires a registration process, and certain items are placed on "prohibited" and "restricted" lists published by the ministry of trade, including protected animal and plant species, antique items, narcotics, and counterfeit items (Economist Intelligence Unit, 2011). Importing any item on these lists requires special permission from the government, usually granted on a case-by-case basis, which creates uncertainty for importers and acts as a barrier to foreign trade.