Germany vs South Korea: Trade Show Industry Compared

Introduction: Trade as Marketing and Communication

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.

Area of Study

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.

Study Background

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.

Significance of the Study

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.

Study Components and Aims

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.