On Foreign Soil

Producing overseas expositions

ByJenny Tesar

Is it daunting? Yes! Intimidating? Yes! Filled with pitfalls? Yes!

But it's also exciting, fun and very, very rewarding.

That's the consensus of U.S. show organizers who are jumping across theRio Grande, the Atlantic and the Pacific to produce events in foreign markets.These producers are finding opportunities -- and success in every part ofthe world, from Mexico to Brazil, Monte Carlo to Moscow, China to Australia."If you're a pro, you're a pro anywhere in the world," says JerryKallman, President of Kallman Associates.

Producing an overseas event is not the same as organizing a show in theU.S. or Canada. There are many differences. But there are also many similarities.Perhaps most importantly, there's lots of help along the way.

It's essential to remember that each country is different. Customs, costs,contracts, site regulations, electrical standards and many other factorsvary -- often markedly -- from one place to another. Those interviewed forthis article stress this point repeatedly, noting that their experiencesmay only be applicable to the particular places in which they held theirevents.

Expect to spend about 18 months from concept to implementation. "That'sa realistic time frame," says Bill Warnes, President of Marketing InternationalCorporation. "It's been done in less time -- we organized two eventsin Eastern Europe inside of nine months. But the risks go up astronomicallywhen you have less than a year. Companies you want to have as exhibitorsmay not be able to be there, because they have to put such events on a long-termbudget. You have less time to find sponsors, place ads, learn about thecountry and so on."

You need to be sure you don't stub your toe the first time out. If you'rebringing your U.S. clientele or your association members, you don't wantto do them a disservice by taking them into a foreign market without themaximum benefit of a successful run. If you're depending on overseas exhibitors,you don't want to create the impression that your show was poorly organizedand improperly promoted. Nobody will come back -- and they'll be reticentto participate in other shows you produce.

Shows and pavilions
When creating an overseas event, show organizers generally choose one ofseveral options: they develop a totally new event, they launch a versionof one of their existing shows, they create a show within an already existingoverseas show or they produce a pavilion in an existing show.

Launching a new event, even if it's a version of one of your U.S. shows,is riskiest and requires the most work. It involves all the labor painsthat are part of launching any new event -- with the added fillip that you'reworking in a foreign country, with foreign laws, foreign currency and foreigncustoms. But, of course, it also offers the greatest potential for profitand glory!

A show-within-a-show is an exposition held in conjunction with an alreadyexisting overseas event. It's a kind of joint venture. For example, CannonCommunications, which produces three Medical Design and Manufacturing showsin the U.S., last year held its first MDM Europe show together with a largermedical show in Dusseldorf. "We decided that if we did a show on ourown it would be a lot harder," explains Diane O'Connor, Cannon's TradeShow Director. "It was an unknown marketplace for us. The Europeanmarket for our manufacturers isn't clearly defined. And we had no positioningin Europe from which to generate audience interest." Cannon is consideringother venues for future MDM Europe shows and ultimately plans to make itan independent event.

Creating a pavilion within a well established event also lets you --and your exhibitors -- take advantage of an established attendance base.You pay for raw space, usually at a favorable rate, and then organize thepavilion much as you would a show. Generally, a pavilion consists of a seriesof hardwall booths -- there's no pipe-and-drape overseas. You provide yourexhibitors with a turnkey package that includes the booth, furnishings,carpeting, set-up and tear-down. Often, there is a hospitality area withinthe pavilion where food and beverages are available. There may also be conferencerooms, secretarial services and an office where government representativescan assist your exhibitors. You can handle design and construction of thepavilion yourself, or you can contract with the fair organizer for thiswork. You have similar options in regard to services such as set-up andcleaning. (See EXPO article on U.S. pavilion at Automechanika, November/December1991 issue.)

If you organize an entire show, you may want to encourage both U.S. andoverseas associations and government agencies to sponsor pavilions in yourevent. This accentuates the international flavor of the show. "At ExpoComm China we have a German pavilion sponsored by the German associationZVI; at Expo Comm Moscow we have a Japanese pavilion put together by ourJapanese office working together with the communications industry associationof Japan," says Ned Krause, President of E.J. Krause & Associates.

Although E.J. Krause typically organizes shows on its own, it's currentlyinvolved in creating a new show as part of a joint venture. Together withDeutsche Messe, the fair organizer of Hannover, Germany, it's starting anew computer and telecommunications exposition in Russia. "We wereboth looking at that market two or three years ago," explains Krause."It was a good match because Deutsche Messe has strong European tiesand they're near Russia. We have strong ties with the Americans and Japanese.We reached an overall agreement from an ownership and equity position, thenwe sat down and divided up specific marketing, sales and operational responsibilities."

Joint ventures do not always proceed smoothly, however. They may barelyget off the ground before they collapse. George Little Management enteredinto an agreement with SAAF, a French company, to jointly produce a showin Paris last year. But after work on the project began, the agreement wascancelled. "We agreed on the show objectives, but our objectives asorganizers differed," says Alan Steel, Senior Vice President of GeorgeLittle. "They are a not-for-profit trade association that was lookingto add something to their event. We are a for-profit organization that waslooking to do something that would benefit our bottom line."

What, where and when?
Some show organizers who consider producing overseas events know the industrythey want to cover. For instance, an association of sporting goods manufacturerswants to produce a sporting goods event for its members. Other show organizersmay be interested in creating an event in any industry in which they canfind a niche. In both cases, a certain amount of research is needed -- toidentify a market, an appropriate site and the best time of year for theevent. Those within a particular industry can provide helpful insights onthese topics. Other excellent sources of information can be found in variousU.S. government agencies (see Uncle Sam.).

"We look closely at market opportunities," says Warnes. "Forinstance, we determined that Mexico needs a major petroleum show. The countryhasn't invested in the industry for the past ten years because they've hadto pay off their national debt. They have a lot of catching up to do. Wesat down with PEMEX, the petroleum company of Mexico, and asked what theyneeded to buy. Then we asked the Petroleum Institute what technology theywanted to learn about. Now that we know what the buyer wants, we're fillingtheir shopping list by creating a trade show and conference which will belaunched this November."

"The best way to choose a country and an event is to be invited!"says Michael Muldoon, President of Convention Management Group. He recentlyorganized a U.S.-Canadian pavilion with about 40 exhibits at a show in Guadalajaraat the invitation of ANTAD, Mexico's retailing association.

Often, overseas visitors to U.S. shows will express interest in havingsimilar events closer to home. This was the seed that grew into a new showproduced by Conference Management Corporation. A major European distributorof casino gaming equipment who visited CMC's International Gaming BusinessExpo in Las Vegas expressed interest in having such a vertical event inEurope where casino gaming equipment had always been part of larger amusementshows. This March, two years after CMC's initial talks with the distributor,they held IGBE Europa in Monte Carlo. Almost all of the approximately 60exhibitors were overseas companies with which CMC had had no previous dealings.

Often, buyers help determine an event's site. "The cardinal ruleis always bring your show or your product to the buyer," says Krause."In China we do most of our shows in Beijing. That's where most ofthe ministries are located, and they still control much of the funding andthe direction in which the country is going. We also run shows in Shanghaiand Canton, but they tend to be regionally oriented."

Kallman, reminding us that we're increasingly part of a global economyand marketplace, cautions, "When you're looking for a place on a facility'sschedule, be sure you do not choose dates that conflict with those of anothershow that is competing for the same exhibitors and audience even if you'rein Munich and the competition is in Las Vegas."

Negotiating contracts
In some countries, you negotiate with a facility or a hotel, much as youdo in the U.S. or Canada. Elsewhere -- Germany is a prime example -- mostfacilities are owned by trade fair organizations that produce their ownevents. The board of directors of such an organization determines whichshows will take place in their facility, and they are not likely to acceptanything that might compete with one of their own fairs. Nor are they likelyto allow a show that they fear may flop. "If people say 'there wasa lousy show in Munich,' then Munich -- not the show organizer -- is leftwearing a smudge on its garment," says Kallman.

O'Connor believes it's important to retain a lawyer from the countrywhere you're producing your show: "The people with whom you're negotiatingwill respect you more if there is one of their own people on your team.Get a lawyer who knows not only local law but also international law. Askyour U.S. attorneys to locate someone for you."

For IGBE Europa, CMC received contracts in French. "We immediatelyhad them translated into English," says Paul Mackler, CMC's Chief ExecutiveOfficer. "We then put in certain override statements that made clearthat the English version was the one we were bound to. We didn't want tobe bound to the French contract, which we couldn't read, and we wanted tocover ourselves in case the translator made a mistake."

Negotiations can take unexpected turns, not only with event venues butalso with hotels. O'Connor found that she couldn't negotiate room rates.And because of the large number of visitors to the Dusseldorf fair, shehad to put her exhibitors in hotels as far as 35 miles from Dusseldorf.Some exhibitors even stayed across the border in the Netherlands!

Mackler used a hotel that wouldn't take reservations directly. "Theywanted us to handle them, so we had to be the housing bureau."

Local sponsors
Experienced show producers recommend finding trade groups and governmentagencies in the host country to sponsor your events. "You have to createcredibility in the eyes of the audience," says Warnes. "Also,many potential U.S. exhibitors may have agents in that country. When youinvite these companies to exhibit, the first thing they'll do is call theiragents and ask for their opinions. Therefore, you have to get the word outon the street well in advance. People have to know that the industry andthe government are supporting the event. For example, we do a telecommunicationsshow in Venezuela. The Ministry of Transportation and Communications providesa message inviting everyone to attend. We also have a letter of endorsementfrom the president of the national telephone company."

While it usually isn't difficult to obtain such support, it may takefour or five months for a foreign organization to actually make the commitment.Warnes advises people to ask the U.S. Embassy for assistance: "Theycan tell you whom to contact. When you write or FAX that organization, senda copy of your letter to the U.S. Embassy, asking them to reinforce yourinvitation by sending along a follow-up note."

Another helpful step is to be part of the U.S. Department of Commerce'sTrade Fair Certification Program. "It costs $1,000 and requires youto meet certain standards, but it's an implied 'Good Housekeeping Seal ofApproval,"' says Warnes. "It will open doors for you at the U.S.Embassy -- it may even get you the ear of the Ambassador. It also makesit a lot easier for you to win the support of local associations and governmentorganizations."

If you can't find a local sponsoring association, create your own. That'swhat the Food Marketing Institute did when it developed its first overseasevent. FMI's Australian members, who attended FMI's annual Supermarket IndustryConvention in Chicago, indicated that there were many people in Australiawho couldn't afford to fly halfway around the world for a show, but wouldexhibit in or attend such a show at home. "We couldn't find a suitablepartner in Australia, so we helped form the Australian Supermarket Association,"recalls Muldoon, former Senior Vice President at FMI. "We helped FMI'sAustralian members organize themselves into a trade association that couldbe the local co-sponsor of the event."

Local agents
With the formation of the Australian Supermarket Association, FMI had notonly a local co-sponsor but also a local agent, with a local address andtelephone number. The relationship between exhibitors and show management-- and between attendees and show management involved local people almostexclusively.

Many show organizers feel it's important to have someone locally to lookafter your interests and help with exhibit sales. The amount of availabletalent varies greatly from place to place. And it's not always easy to spotwinners. "I worked with a construction firm in Budapest that had neverbeen involved in sales. They ended up hiring someone to act as a sales coordinatorand they sold more of the space than we did," says Warnes.

Before drawing up a written agreement with an agent, do some research.Make certain the organization is credible and presents your quality image.One reason to be cautious: the person who is your agent this year may beyour competitor next year. "I launched Machina Expo, which I decidedto make a biannual event," recalls Warnes. "Suddenly someone saidto me, 'Hey, I hear you're coming back next year.' When I said I wasn't,I learned that someone else had announced a similar show called Expo Machina."

Lots of local input can also be obtained from your overseas exhibitors."We always create an exhibitor advisory board for our U.S. shows andwe did the same thing for IGBE Europa," says Mackler. "It wasa very active board and extremely helpful in introducing us to contactswe needed, for gathering lists and so on. Members even reviewed our promotionalmaterial after it had been translated into European languages."

Mackler believes it's extremely important to make as many trips as necessaryto get to know the people you'll be working with at the facilities and hotels.Which people within each organization can really be of help? Don't judgeby titles or positions, he says. "The person who can help you get thingsprinted on a moment's notice or get you through knotty set-up problems isnot always the person you might think it is."

Local customs and languages
In Singapore all videos have to be censored. In Taiwan all documentationhas to be in Chinese. In Denmark there's a 21 percent value-added tax. InMexico you can't buy something by credit card over the telephone. In someplaces, cleaning is included in the fee charged by the overseas show toa pavilion organizer; in other cases, it is not included. "There area lot of these kinds of pitfalls," says Kallman. "After a whileyou learn which questions to ask. And you must ask them. When we take agroup of people in a pavilion and say to them, 'Leave all the dirty workto us,' we darn well have to know about such things."

It certainly helps to know the local language, but it isn't essential.Fortunately for us, English is widely considered the universal businesslanguage, and many people around the world speak it extremely well. Manymore speak at least rudimentary English. However, you'll probably want tohave an interpreter along for many of your meetings with local people --and you'll definitely need translators to put all your sales and promotionalmaterials into the local language. The commercial section of any U.S. Embassycan provide the names of local agencies that supply interpreters and translators.

You'll also need bilingual personnel during the show. Mackler hired peoplefrom a "temp" agency in Nice who were fluent in French and atleast one other language predominantly, but not exclusively, English, Germanand Spanish. "They were a lifesaver," he says. "The suppliersand vendors knew English, but not the attendees."

Setting a budget
Establishing a budget is much the same as for a U.S. show. All the mainbudget categories are identical. The major additions: interpreters and translationservices. If the show is an international event, you usually have to planto spend more money on exhibit sales and attendance promotion. "Ifyou do a one-country exposition, then all your promotion is in one languageand similar to a promotion campaign you'd do for a domestic show in theU.S. that isn't looking for international participation," says Krause."But, for example, a show we did in Mexico involved promotional campaignsin Latin America as well as in the U.S., which meant having materials preparedin both Spanish and English."

Your travel expenses are likely to be higher than for a show in the states-- particularly if you're going into a market such as Tokyo, where hotelrates are astronomical. Pay scales vary markedly from country to country-- again, check with the U.S. Embassy.

If there's a value-added tax in the country, learn about the procedureyou and your exhibitors must follow to obtain refunds. Sometimes you canget the money back, sometimes you can't. And sometimes it doesn't seem tobe worth the hassle to try. "I have a document that's more than 50pages long, with single-spaced type in a minute typeface, to read throughto learn how I might get back some of my VAT," says O'Connor -- nearlya year after MDM Europe. "You have to be a lawyer to go through thisdocument! I went through it with our chief financial officer and he justscratched his head."

Just the beginning
We've looked at some of the initial aspects of organizing a show abroad.There are many additional facets to consider, many other problems to solve.There's the currency issue, and deciding whether to work in U.S. dollarsor the local currency. There's the need to find a freight forwarder -- andthe relief that comes when you learn how much this company can do for you.There's exhibit sales, attendance promotion and working with the press.There's finding stand (booth) builders and all the other suppliers you'llneed. And finally, there's showtime: all the on-site activities that keepa show humming smoothly. We'll be covering these topics in future issuesof EXPO, so that you can feel more at ease when taking your event abroad!

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