Strategic Event Planning in the Festival Industry Essay
1 - Strategic Event Planning in the Festival Industry Essay introduction. 0. Introduction According to Bladen et al. (2012:3), events are temporary, they reunite people, they can occur on a regular basis, but each of them are unique. Event Job Search (2012) adds that an event can be defined as a situation where a company presents itself directly to its targeted audience. However, none of those definitions are really precise. Indeed, the scope of the event industry is so diverse that it is difficult to really define it. The development of the communication channels such as the internet and the ease of travel have made the event industry growing (O’Toole 2010: XXI).
Indeed, according to Britain for Events (2012), nowadays the event industry attracts 7 million of visitors per year in UK, the value of the event industry in UK is ? 36. 1 billion and it employs 530 000 workers. In 2020, the events industry will be worth ? 48. 4 billion. However, Robinson et al. (2010: 239) argue that it is difficult to measure the real size of the industry because the sector is highly diverse and that there is an encroachment with other sectors such as the hospitality sector (People1st 2010). According to Sharkey (2009), various international events occurring in the UK will boost the Hotel Industry.
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Berkeley Scott (2012) add value to that idea with the example of the Olympics in London, saying that the extras visitors expected for the event would stimulate the Hospitality Industry through hotels, restaurants and pubs. Fletcher (2012) categorises events in conferences, meetings, sporting spectacles, exhibitions, product launches, festivals and incentive programs. Bowdin et al. (2010:19) bring another approach to the categorisation of events: according to them, events are categorised regarding their size and the impact they have: the bigger the impact is, the bigger the event is.
Getz (1999) also supports that theory saying that mega-events are the ones that produce the highest level of tourism, media coverage, economic impact or prestige for their host communities. Bowdin et al. (2010) also categorises the event industry in 3 types: cultural, sports and business. That approach seems quite simplistic, as events can concern many other things. Raj et al. (2009:3) and Getz (1997:7) presents other analysis with many other categories that seems to be more representative of the current event sector. However, whatever the type of event, they all follow the same strategic planning process.
Thus, this report will, firstly, discuss the overall strategic planning process, then introduce the area of focus to be able to analyse its financial aspect of the strategic planning process, its Human Resource and finally its marketing. The last part will look at the process of evaluation of the event. 2. 0. Strategic event planning process There is an accurate flow that needs to be incorporated into the design of an event, and every choice needs to be precisely pondered, the success of the event depending on it (Allen, 2010:1). That flow is called strategic event planning process.
According to O’Toole (2011:3), a strategy is a long-term planning designed to achieve the goals of an organisation. Indeed, Allen (2009:1) enhances the idea of the importance of planning saying that an event is comparable to a live stage production: once it starts, there is no place for mistake. Many authors, such as Bowdin et al. (2010:190) or Shone and Parry (2010:92) offer their opinions of the optimum process for an effective strategy which are quite similar. However, Bowdin et al. (2010:190) add, at the beginning of the process, the idea of feasibility.
Is the idea realistic? Are the resources to deliver the event available? Or is it possible to create them? It is the stage of birth and hatching of the project (Masterman, 2012:57). On the contrary, Shone and Parrry (2010:92) encompass the idea of strategic planning in its last stage: the legacy. One of the reasons why it is important to strategically plan an event is that the impact of that event can be long-term and can become a patrimony that a community leaves to future generations. That may be something that remains in the memories, whether it is good or bad.
The strategy should also consider the factors that may impact on the ability to deliver the event. Many external factors could change the strategy: technology, trends or legislation and they might have an impact on the key operational elements of the event development (Tum et al. , 2005:31), which are finance, health and safety, human resources, logistics, legal environment and marketing (Bladen et al. 2012). In order to understand the planning process for finance, human resources and marketing, the festivals part of the event industry will be used. Indeed, that part of the event industry is worth ?
1. 541b in the UK economy, 10% of adults have been to a festival in the past year and that value is expected to raise ? 1,681b in 2017 (Mintel 2012). 3. 1. Financial management for festivals An adequate budget planning is critical for an event’s success (Damster and Tassiopoulos 2006: 119). Finance is the basis of the birth of an event: if the organisers do not have the capital, they will not have the ability to deliver the event. Moreover, even if the budget is important enough to finance the event, the money needs to be allocated wisely; otherwise it will have negatives impact on the event.
Festivals management presents many unique challenges (Getz et al. 2010). However, those challenges might not have been well monitored enough, which would be the reason why festivals ticket sales have decreased this year in the UK. Financial management is about finding the financing and allocate it to the right place (Yeoman et al. , 2004). Mismanagement of finance could lead to operational issues during the event such as safety, crowd control and legal issues. To have an effective financial management, organisers should prepare a budget to forecast the revenue and the costs.
Budgeting serves as an on-going control to manage the performance, and to make sure that there is an alignment with objectives (Mastermann, 2012). In budgeting, it is important to consider the sources of revenue and the British Arts Festivals Association (2008) states that ticket sales are the main source of revenues (33. 6%), governments contributes to 15% and private business contributes to 24%. However, ticket sales for festivals in the UK decreased this year, mainly due to external factors: Hann (2012) states that the recession, the weather and the Olympic Games had made sales going down.
Maybe the organisers had not planned the impact of the Olympics on the venues; because competition can have a huge impact on an event (Rutherford Silvers, 2003). Those environmental risks have not been well monitored, and that had an impact on the operational areas as well as on the image of the event. The other main point to consider when budgeting an event is the expenses. How much money the event will cost the organisation? The Glastonbury Festival gave a table of its expenses in 2007 (Glastonbury Festivals, 2007). The main costs are linked to the production, performance and exhibition.
If expenses have not been well forecasted, and some of them increase, this will have either an impact on the event itself, as organisers will have to save money from somewhere else, or the organisers will not be able to refund the investors. That may lead to stop the schedules for the following year, as investors will not want to invest in that festival again. Knopper (2008) stated that “oil prices are eating away at the summer-concert business”. The increase of oil prices will impact in two ways on events: they will have more expenditure and less people will be willing to spend money on events.
That will directly impact on the ability to deliver the event and the budgeting will have to be reconsidered: for example increase the tickets prices but that will change the number of people attending the event. 3. 2. Human Resources Management for festivals The management of human resources is the key for a successful event (Bowdin et al. , 2010). The event industry is having a unique approach to HR: HR managers respond to the requirements of each event (Bladen et al. , 2012). Each event is having its specificity, and events workers are the engines of the event experience, they are creating the authenticity of the event.
The HR planning process for event is a logical flow of processes and practices that lead to the event objective (Bowdin et al. , 2006). HR decisions should reflect the overall experience that the organisation wants to deliver. 76% of the UK festivals are involving volunteers and 38% of festivals are run entirely by volunteers (Barron and Rihova, 2011). Volunteers might be the most motivated people and the most able to reflect the overall idea of festivals. Being able to reflect the overall experience in the HR practices starts with the HR strategy and objectives. HR objectives are regarding the staffing needs.
However, issues can occur at this stage: organisers might have planned, in their financial budgeting, to allocate a certain budget to paid staff and so that the HR needs to recruit a certain number of volunteers. If the HR is not able to recruit as many volunteers as planned, it will have an impact on the operational areas. For festivals, volunteers are primary stakeholders; without them, many festivals could not take place or would have to review their financial investment. The Glastonbury festival employed 1300 volunteers responsible for recycling (The Telegraph, 2011).
Without them, the event would have two issues: spends more money to hire people to clean the site, which means change the budget or leave it as it is and damage the festivals image. The HR manager, after having hired workers, needs to train them (Van der Wagen 2007:29). However, despite the fact that volunteers have a wide range of skills, they are often not formatted for the tasks associated with festivals management (Hede and Rentschler, 2007) and Curtis (2005) highlights that volunteer work is the key to go to festivals for free such as at Glastonbury.
It means that there is a risk for having incompetent workers that saw an opportunity to join the festival. This can have an impact on the operational areas: it can damage the legacy of the festival, as workers would not have performed well; it will require more financing for training, and so the organisers will have to review their budgeting. The other issue an HR can face is about the unsafe working environment (Rutherford Silvers 2007:167). Indeed, HR managers are responsible for the security. An article from MTV (2012) reported that a festival at London’s Hyde Park had to be cancelled because of unsafe site.
That will undeniably have an impact on the operational areas and on the event itself: its legacy will be damaged; investors will not be willing to invest again in the event and the organisers will have a huge loss of money. 3. 3. Marketing for festivals As Park (2010) said, festivals are made to influence the communities through the development of culture, tourism or even community integration. To make sure that festivals can reach those goals, they need to use marketing strategically. Lee et al. (2008) encompass that idea saying that festivals are large businesses that require a large amount of marketing to be known by the public.
While considering the marketing for a festival, organisers should think about the external environment. Bowdin et al. (2011:376) stated that analysing external environment is vital to have effective marketing strategies. By looking at external environment, organisers can shape marketing strategy that is in line with the current environment. The evolution of the technology presents opportunities and challenges for organisers. However, some organisations are trying to use new marketing tools, such as internet, but they do not always manage them effectively.
It is the example of the Edinburg Fringe festival that did not managed well the uses of technology as a marketing tool: seeing the efficiency of the online bookings, they used it for the festival. However, on the day after the launched of the system, the service was suspended till the day before the event, resulting in thousand of tickets unsold (Carlsen et al. , 2010) and ticket sales dropped by 10%. That shows an inadequate risk management and damaged the event itself: they had a loss of ? 300,000 and, as the image of the festival was damaged, they had to invest a lot in marketing to renew the image of the event.
While planning marketing for festivals, it is also important to look at the components of the marketing mix. “People” is an element of the marketing mix. It regroups the hosts and guests but also the sponsors. Sponsors are important for an event to achieve larger market share (Rowley and Williams 2008). However, sponsorship can lead to a specific issue: as O’Brien (2012) said, alcohol sponsorship is a risk for festivals. Glastonbury festival is, for example, sponsored by Budweiser (Matheson, 2005) but there is a risk that sponsorship of alcohol creates an association between the event culture and the uses of alcohol.
The Gothenburg festival has failed because of the abuse of alcoholic beverages by guests and Carlsen et al. (2010) encompasses the fact that this festival was sponsored at one quarter by beverage outlets; this affected all the event and organisers had to renew the festival by changing all the experience and by targeting other segmentation after that fiasco. 3. 0. The evaluation of an event According to Bowdin et al. (2010:630), evaluating an event is about critically observing, controlling and assessing an event performance to evaluate the results.
All of that is made in order to evaluate whether the event matched the objectives and aim of the organisers. That stage is the last part of the planning process; however, it needs to be planned during the design of the event to make sure that there is an on-going evaluation. That process allows to highlights potential issues that have occurred to ensure the success of future events. Bowdin et al. (2010:629) also stated that the events, and so festivals, are recent industries and that their credibility will increase thanks to honest critical reviews.
Organisers are looking for the outcomes the event generated or the impact the event had on the environment. Conn (2012) highlights that the main objective of the Olympic Games was to “inspire a generation”. However, the article also states that obviously the Olympics did not reach the objective, because that did not stimulated people to be more actives. Evaluating an event also helps to identify what can be improved for the next one, either on the event itself or on the event management process that was used during the implementation of the event.
That process of evaluating the event gathers data and analyse them. To gather data, organisations look at the venues, at the financial performance, at the reviews from the media. Events can also use survey to analyse the opinions of the attendees. Once all those information have been gather and analysed, organisations should create evaluation reports for stakeholders to summarise them the benefits of the event and to maintain a relationship with these important actors in order to ensure the durability of the event.
4. 0. Conclusion Through this report, the author analysed and emphasised the importance of a strategic planning process for an event. Indeed, to demonstrate the understanding of the strategic planning process, the authors focused on the festivals industry and analysed the impacts that a mismanagement of the planning process can have. It has been seen that many issues and risks can occur during the planning of an event and that a well managed planning process can prevent all those issues and risks.
To understand the link between risks and strategic planning process, the authors analysed the financial aspect of the festival industry, the Human Resources aspect and finally the marketing. Issues were analysed and it has been seen that, in order to prevent risks, it is important to plan with flexibility. However, it has been seen that some risks are manageable by the organisers and some are not. Some are depending on the external environment and the changes that can occur on a planetary scale. All organisers should have a “plan of
rescue” in case of major problem to make sure that the event is still successful. In the last part of the report, the author analysed the importance of the evaluation of an event and shown that, for the durability of the event industry, it is important to make feedback on performance. 5. 0. Bibliography Allen, J. (2009) Event planning: the ultimate guide to successful meetings, corporate events, fund-raising galas, conferences, conventions, incentives and other special events. 2nd ed. Ontario: John Wiley and Sons Allen, J.
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