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Module 6 - MICE - Lecture notes 6

BS in Agriculture (Isabela State University)

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HM 223 – INTRODUCTION TO MICE

UNIT 6: MARKETING AND FINANCIAL MANAGEMENT OF MICE

INTRODUCTION
Marketing is the function of event management that can help keep in touch with the event’s participants
and visitors (consumers), read their needs and motivations, develop products that meet these needs, and build a
communication program which express the event’s purpose and objectives. Customer Care is an important factor
in MICE marketing. The needs of event customers should be given careful consideration. The marketing concepts
that are applicable to MICE are market research, SWOT analysis, target groups, and marketing mix.
Adequate financial support is vital for the success of an event. The biggest error of MICE organizers is to
launch an event without adequate funding. Careful budgeting is necessary for the event to work well.

OBJECTIVES At the end of this chapter, you will be able to:

➢ Define Marketing
➢ Explain the meaning and importance of customer care
➢ Discuss the important factors in marketing
➢ Explain the marketing concepts that are applicable to MICE
➢ Explain the importance of funding in MICE Management
➢ Discuss the significance of budgeting and financial control MICE Management
➢ Clarify the meaning and importance of sponsorships
➢ Describe some tips on how to look for sponsorships and how to make sponsorship work

DISCUSSION PAPER Topic I. Meaning of Marketing

The dictionary defines marketing as an integrated process of producing, distributing, and selling goods
and services. Other definitions are:
• Marketing is a management process responsible for identifying, anticipating, and satisfying customer
requirements – profitability (Institute of Marketing).
• Marketing is a social and managerial process by which individual groups obtain what they need and want
through creating and exchanging products value with other (Philip Kotler).
• Marketing is communicating to and giving target market customers what they want, when they want it,
while they want it, and a price they are willing and able to pay (Robert Lewis).
The basic principle in marketing is that the customer is very important. Everything must be done to satisfy the
customer.

Topic II. Customer Care

Customer Care is an essential element of MICE marketing. The needs of event customers must be given special
attention. If they enjoy the event, they will come back and perhaps even invite their friends to a future event.

Customer care must begin as soon as the customer arrives at the event. Customer care ca best be achieved by
observing the event from the point of view of the customers. It should be the concern of all individuals involved in
the organizing agency, from the manager to the concern attendant or staff. The members of the organizing group
should do everything possible to create a good image and impression with the customers more than what they
expected. Everyone must serve the customers because without customers, the whole event is worthless.

Topic III. Important Factor in Marketing

There are several factors in marketing that event organizers must be aware of:
1. Location – environmental factors such as traffic and scenery as well as the attractiveness and accessibility
of the location should be considered.
2. Social Factors – the attitude of people to what is appropriate might be affected by the attitude of friends
or colleagues
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UNIT 6: MARKETING AND FINANCIAL MANAGEMENT OF MICE

3. Cultural Influences – different groups in society wit different ethnic origins and social classes will see
events in different ways.
4. Fashion – during certain historical periods, certain types of events will be popular and will attract many
participants
5. Political Factors – local and central government will support events that fit with their beliefs.
6. Economic Factors – assess how much money is available at a corporate and individual level, consider
the exchange rates and similar economic factors
7. Philosophy – the beliefs and attitudes of groups, individuals, and other agencies will affect the range of
events that are provided

Topic IV. Marketing Concepts

The marketing concepts which are applicable in commerce can also be applied to events. These are market
research, self-analysis, target groups, and marketing mix.

• Marketing Research

Market research is the objective gathering, recording, and analyzing of all facts relating to the provision
of services for the appropriate consumer.
No event should take place without market research. The complexity of the event will determine the cost and the
kind of market research to be undertaken. The cost of market research should be determined, and existing
information should be checked to know what is available. Market research can help decrease the risk of failure. It
is also helpful in planning an effective marketing strategy. Direct research can be done by questionnaires, personal
interviews, telephone interviews, or group discussions. The questions must be carefully constructed to avoid
inaccurate answers. The interviewers must be objective and reliable. The data collected must be properly analyzed
and interpreted. Only authentic conclusions will be meaningful in organizing event.

• SWOT Analysis
The situational analysis can be done by SWOT, an acronym for Strengths, Weaknesses, Opportunities, and
Threats of a specific event.
The following are some possibilities that are applicable to events:
Strengths Weaknesses
a. Staff ability a. Poor transport facilities
b. Detailed specialist b. Limited financial
knowledge resources
c. Local reputation c. Lack of general
d. Political support management skills
e. Enthusiasm and d. Poor public image
commitment
Opportunities Threats
a. Increased public a. Lack of commercial
awareness support
b. Developing partnerships b. Competition from similar
c. Financial returns promotions
d. Changing attitudes c. Changes in funded
e. Offering new possibilities priorities
f. Offering new possibilities d. Economic trends

SWOT analysis helps in the practical planning of the event and particularly with the marketing strategy to be
used.

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• Target Groups

Good market research should identify the target groups or the persons who are relevant to particular events. For
events, it is necessary to identify the targets – the potential participants, potential spectators, potential sponsors,
and potential staff. Target groups for MICE marketing are shown below. These people come from different areas
and require different marketing strategies to get their support. The next step is to know the needs of each group
so that a plan can be made to meet them. This will be of great help with the overall MICE planning and especially
with the marketing strategy. Several strategies may be used to target the identified groups.

Media
Members Donors

Visitors Sponsors

Commercial
Spectators Sector
TARGET
GROUP

Staff Politicians

Government
Participants Agencies

Granting Local
Agencies Authorities

• Marketing Mix

Marketing mix is a combination of factors to get the correct balance for an enterprise. The four basic factors are
place, product, price, and promotion. The four factors must be balanced for every event. The following are the
different aspects of each factor:

a. Place – the various aspects are venue, accommodations, ancillary facilities, signposting, maps, carpark,
catering location, emergency access, host town, region. Country or administrative subdivision,
environmental conditions, geographical location

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b. Product – it is the end result; it may be the tournament, exhibition, seminar, or show. It also includes
ancillary contributions such as programs, presentation, quality production and customer care.
c. Price – the cost of the event which is acceptable to the customers
d. Promotion – the various aspects are advertising, media relations, publicity, merchandising, pamphlets,
posters, logo, displays

A good MICE manager should balance these aspects to produce an effective marketing mix. There are other P’s
which should be included for events. These are:

a. People – people are very important in producing a good event. Proper customer care, teamwork, well-
trained and competent staff are major marketing tools.
b. Packaging – it is method of presenting events. It may be presented once or as a part of a season of
festival. Marketing will depend on the package such as a family package or season ticket.
c. Partnership – it is the support of others which is very beneficial to the success of an event
d. Programming – it is the way an event is scheduled. It is an important marketing tool.

By balancing all the P’s, an efficient MICE manager can work out a strategy that will ensure the success of a
particular event.

• Additional Information
a. Promotion – is the method of bringing the product to the attention of public and prospective participants.
It deals with the image and presentation of the product. Its aim is to achieve attention, interest, desire and
action (AIDA).
b. Logo – suitable logo is a vital part of a public image. It is advisable o consult reliable agencies and
authorities before finalizing the design. An appropriate logo should: (1) reflect the event, (2) pass on what
it is about, (3) be attractive and eye-catching, (4) portray an event image, (5) give relevant messages, (6)
be colorful
c. Mascot – an event should have a mascot. A mascot is a person, animal, or thing considered to bring good
luck. A mascot can help promote the event, especially with certain target groups. The mascot should be
identified with the event, it should be appropriate and attractive.
d. Advertising – is essential for the success of an event. Advertising is expensive, but despite its cost,
successful advertising is very valuable. Television advertising is expensive, but it is very effective in
reaching the mass audience. Effective advertising is necessary to encourage people to attend the event.
e. Media Relations and Publicity – should be given much attention. The publicity campaign should be
undertaken together with the advertising campaign. The campaign should be done for several months
until the beginning of the event. It should be done immediately to enable the potential participants to book
early and prevent conflicts with rival attention.
f. Press Conferences – can be a very effective way of getting important press coverage and briefing several
journalists at the same time. There are several reasons for holding a press conference: (1) to launch the
even, (2) To relate genuine news about a famous person who is taking part in event, (3) to explain a
controversial issue about the event because media speculation can be damaging, (4) to reveal a major
exclusive. Prepare a detailed agenda for the press conference and follow it strictly.
g. Photo Opportunities – it is essential to create a visual as well as a verbal impression. Words are cheap
but not necessarily eye-catching. Photographs can attract much attention. They often create greater
awareness of the evet and help to satisfy the desire of the sponsor for publicity.
h. Relevant Media – it is important to involve all the media, not just some. Local radio offers the possibility
of announcing events and interviews with organizers. National, regional, and provincial media should be
targeted. A promotional competition, a discount system for large attendance, and other types of incentives
can be utilized to attract customers. For local events, word of mouth promotion can be used to obtain
support.

Topic V. Funding

Adequate funding is essential for successful event. The biggest mistake of event organizers is to host an event
without adequate financial support. To do so will result in the failure of the event.

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Topic VI. Budgeting

Careful budgeting is vital for the success of an event. A budget is estimate of income and expenses. It is necessary
to budget carefully to find out the funding needed by the event and provide a monitoring system in the planning
and implementation of the event. Each activity should be analyzed as follows:
• The specific activity to be undertaken
• The estimated cost of each activity
• The benefit of each activity
• The income from the activity
• Th necessity of the activity
• The place of the activity in the budget priority
• How the expenditure of the activity can be monitored
• How the income will come in and how certain it is

The costs and benefits of the project should be considered before deciding to undertake it. The budget should be
made as accurately as possible.

AWARDS BANQUET

Income
100 Registrations
101 Pre-Registrations 25,000.00
102 Regular Registrations 50,000.00
103 Door Sales 5,000.00
Subtotal 80,000.00

200 Marketing
201 Sponsorships 15,000. 00
202 Advertising 10,000.00
203 Merchandising 5,000.00
Subtotal 30,000.00

300 Investments
301 Interest Income 1,000.00
Subtotal 1,000.00

400 Donations
401 Grants 5,000.00
402 Individual Gifts 10,000.00
403 Corporate Gifts 25,000.00
Subtotal 40,000.00
Total Income 151,000.00

Expenses
500 Administration
(fixed expense)
501 Site office furniture rental 1,000.00
502 Site office supplies 1,000.00
503 Site Rental 3,000.00
504 Site telephone expense 1,000.00
Subtotal 6,000.00

600 Printing (fixed expense)

601 Design 3,000.00
602 Printing 5,000.00

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603 Binding 1,000.00

Subtotal 9,000.00

700 Entertainment (fixed expense)

701 Talent fees 10,000.00
702 Travel and Accommodation 1,000.00
703 Sound 2,000.00
704 Lights 2,000.00
Subtotal 15,000.00

800 Food and Beverages (variable expenses)

801 300 dinners @ 50 15,000.00*
802 Open bar for one hour 3,000.00*
803 Ice sculpture 500.00
Subtotal 18,500.00
*Include taxes and gratuities

900 Transportation (variable expense)

901 Staff Travel 1,000.00
902 Valet Parking 750.00
Subtotal 1,750.00

1000 Insurance (fixed expense)

1001 Cancellation 1,000.00
1002 Host Liability 500.00
Subtotal 1,500.00
Total Income 51,750.00
Total Variable Expense 29,250.00

Total Projected Income 151,000.00

Total Projected Expense 51,750.00
Total Variable Expense 99,250.00
Percentage of fixed overhead 25,000.00

Net retained earnings (reinvestments) 74,250.00

Topic VII. Financial Structure

After the organizers have agreed to push through with the event, the financial structures need to established
immediately. Not withstanding the level of the event, financial structures may be simple with a treasurer controlling
all finances or it may be very complicated involving several committees and even paid staff to manage the finances.
When the structure involves committees there are two options:

1. Finance as a free-standing committee; everyone requests money and awaits their decision
2. Each committee or subcommittee has a treasurer to look after allocated budget

The method to be chosen will depend on the nature and level of the event, finances, and personalities involved. It
is important to have a clear structure for financial processing and control. Everyone must know who manages the
money and who authorizes and controls expenditures.

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Topic VIII. Control

The careful control of financial transactions is a vital aspect of MICE management. Various control systems are
necessary to keep spending within agreed limits. Failure to implement proper control over budgets will lead to
confusion. The following are practical steps to follow for effective financial control:

1. Limit the number of people who can incur expenditure

2. Keep accurate records of all income and expenditure
3. Use appropriate record-keeping methods to keep financial information correct, and readily available
4. Ensure that relevant structures channel financial commitment through financial record keepers
5. Ensure that financial information is widely circulated to all those who require it
6. Produce systems and information that are clear and understood by everyone involved

Catering

Finance Venue

MAIN
COMMITTEE

Accommo
Technical
dation

*Finance is a free-standing committee*

Main
Committee

Catering Venue
Finance has
a rep from
each group

Accommo
Technical
dation

*Each committee or subcommittee has its own treasurer to look after its allocated budget*
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UNIT 6: MARKETING AND FINANCIAL MANAGEMENT OF MICE

Topic IX. Source of Funding

MICE organizers should identify possible sources of income and how obtain funding for them. There are several
agencies that MICE organizers can approach for funding such as:

o Local authority leisure department

o Education authority
o Local or national sports council
o Foundation for sports and the arts
o Local or national tourist authorities
o Sponsorship agencies
o Business agencies
o Professional institutes
o Hoteliers
o Heritage agencies
o Local or national charities
o Voluntary agencies
o The National Lottery

In addition, MICE organizers can produce income from various activities such as:

o Franchising
o Ticketing
o Entry fees
o Fundraising
o Donations
o Programs
o Raffles
o Souvenirs
o Catering
o Advertising
o Licensing (logos, etc)
o Trade exhibitors
o Participants contributions
o Sales stalls
o Bar
o Corporate hospitality

Topic X. Sponsorship

Sponsorship is a mutually beneficial business arrangements between the sponsor and sponsored in order to
achieve the agreed objectives. Commercial sponsorship is very difficult to find and requires a lot of effort to service
it. Finding sponsors is not easy. Information about possible sponsors obtained from:

o Yellow pages and telephone directories

o Local and national newspaper
o Business organizations
o Professionals
o Participants and their personal contacts
o Libraries – local, regional, and national
o Market research through learned centers, consultancies
o Partners that have supported previous events; and
o Existing sponsors
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Some Tips on looking for sponsorship

1. Use imagination and innovation – a new idea might convince a person to be a potential sponsor
2. Put in the marketing effort – be sure that the product and price are correct and the quality of the event is
widely known
3. Clearly define the type of market - specify the type of market – if the participants are rich, middle-aged,
or young people
4. Consider changing the nature of your activity, event, or promotion – adapt the event to suit the sponsor’s
idea, desires, and requirements
5. Access your sponsors through the Rotary Club
6. Assess respective images – sponsors must be compatible with the event and the participants
7. Approach unlikely targets – approach somebody who has not sponsored an event before
8. Do necessary research – do detailed research using the media and the local library
9. Check existing sponsors – find out what active companies are already sponsoring
10. Get media support – to support of the media is needed to attract sponsors

How to Make the sponsorship work

Sponsorship can be very worthwhile. Both parties must work to make it effective. The MICE organizers must not
promise what they cannot deliver. The technical skills and knowledge of the organizers must be used in the
planning and delivery in order to make the sponsor’s support justified.

The Bidding Process

The bid is a proposal to host an event. It is the most critical marketing tool in obtaining business. The bid should
answer all the needs and requirements specified by an organization in a clear and concise manner. This bid may
be presented to an individual, a small committee, a board of directors, or a general assembly of hundreds or even
thousands of people. The presentation may take place when decision-makers visit the city, or it may take place in
another location. The presentation may be given to a client who is well-known by the bureau or to a relatively client.
Each bid presentation will have its own unique character depending on the potential client and the character of the
bureau.

The following are important in the bid process:

▪ Preparation
a. Ask for a copy of a “bid form” or information regarding the specific requirements of the organization.
The bid form is a document that gives a detailed explanation of the requirements of the association
in hosting a meeting. It could be short or long.
b. Research on the history of the association for the past four years. Examine if there are conflicts and
clear them with the association planner.
c. Evaluate the strengths and weaknesses of your destination from the point of view of the planner
d. Find out how the bid will be made; whether the association will accept an oral presentation, a written
presentation or both
e. Research the details of bid presentation such as location, date and time
f. Meet the leader of the local district to discuss the strengths of the local organization
g. Categorize the organization according to kind – social, educational, political, scientific, etc.
h. Examine your market position. Find out what makes your destination unique from other destinations
i. Communicate with previous host cities and request them help you in dealing with the organization’s
planner
j. Request local representatives to help you pre-sell your destination through letter-writing,
accompanied by several photographers or pictures.

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UNIT 6: MARKETING AND FINANCIAL MANAGEMENT OF MICE

▪ Presentation
a. Make sure that the presentation document is complete and easy to read without spelling and
grammar mistakes
b. Make the bid document personalized by engraving the name of decision0makers on the cover of the
bid document
c. Send a letter of invitation following the protocol order to congressman, senators, governors, mayors,
local members, and bureau
d. In case there is a “bid form” from the organization, make sure that it is completely filled out and
contains the necessary supplemental information.
e. In case an oral presentation is needed, prepare the scripts of every person who will participate in
the presentation.

▪ After the Presentation

Upon winning the bid, a memorandum of agreement will be signed between the bid proponent, which is the local
association, and the international organization. Upon losing the bid, the proponent will revise the bid and bid again.

▪ How to bid for International Events

For international events, it is the host federation or national government body that formally makes a bid to its
international federation to secure an event. Once the event is secured, and the contractual agreement with the
international federation has been made, the host federation will have to enter into a contract with its chosen host
city. The host federation is the one that selects the appropriate venue.

▪ Financing of Bids and Events’

The cost of bidding and organizing international events can often be financial burden to the host city. Many
governing bodies require the prospective host city to fund the bid process and shoulder the total cost of the event.

▪ Importance of Hosting International Events

The significance of hosting international events can be seen from the way events stimulate the local economy
through multiplier effects. These events can contribute significantly to a city’s overall economic regeneration plan.
The expenditures in the city by participants, spectators, officials, and visitors will boost the local economy. Hotels,
restaurants, clubs, shopping centers, and local transportation will all benefit from the event.

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