Marketing and the Arts (arts management)

The behavior of arts audiences is changing dramatically. Although

some performing arts organizations have successfully retained and

even grown their subscriber base in recent years, since the mid-

nineties many organizations have been losing ground in their efforts

to both attract and retain subscribers.

Joanne Scheff Bernstein, Arts Marketing Insights

KEY WORDS

KEY WORDS

• Marketing


• Needs and wants


• Functional satisfaction


• Psychological satisfaction


• Exchange


• Form, time, place, and possession utilities


• Production, sales, and marketing eras


• Product, sales, and customer orientations


• The four Ps: product, price, place, and promotion

• Marketing mix
  
  
  
  • Market segments
  
  
  • Target marketing
  
  
  • Demographic profile
  
  
  • Psychographic profile
  
  
  • Focus groups
  
  
  • Strategic marketing plans
  
  
  • Marketing audit
  
  
  • Niche strategy
  
  
  • Differentiation strategy
  
  
  • Market share strategy
  
  
  • Marketing data system (MDS)
  
  
  
  

These next two chapters introduce the all-important topics of marketing and fundraising. We will review many of the basic concepts that underpin the activity of promoting the arts and building what we hope are life-long relationships with our audiences and donors. We will also discuss what effective marketing really is (it is not just about posters and press releases). We will review how to develop a marketing plan (see Figure 11.1), develop a better understanding of audience research techniques, and how to assess the effec- tiveness of marketing and public relations plans.

An arts manager must plan, organize, implement, and evaluate various mar- keting and fundraising strategies in an effort to maximize revenue to meet the organization’s established objectives. There can be enormous satisfaction in seeing a full house, a packed museum, or the groundbreaking for the building made possible by the efforts of well-designed marketing and fundraising cam- paigns. However, we will also see that no amount of managerial brilliance or sophisticated marketing effort will amount to much if the basic product does not meet the needs of the consumers for whom it is intended.

It is important to remember that, like a management information system or a computer, marketing and fundraising activities are nothing more than tools for an arts manager to use. Marketing and fundraising cannot make a bad script good or a weak performance strong. At best, marketing and fund- raising can help support a long-lasting relationship between the individual consumer and the organization. If properly managed, this relationship can evolve, and the consumer can transition from a single-ticket buyer to a sub- scriber or member, to an annual supporter, and eventually to a major con- tributor. Unfortunately, this objective is much easier said than done.

THE MARKETING LANDSCAPE

In the world today, it is almost impossible to avoid the efforts of someone trying to sell you something. We are bombarded with thousands of messages every week in the form of television commercials, newspaper and magazine advertisements, flyers and letters in the mail, junk e-mail, banner ads on Web sites, text messages, or phone calls from total strangers. Thousands of new consumer products are released in the market every year. Billions of dollars and millions of hours of labor are expended on product research, design, and distribution.

Promotional activities related to the for-profi t-sector of the entertainment industry relentlessly let us know that a new fi lm is opening, the season pre- miere of a television show starts next week, a new book is coming out, the ice show is in town, or a new ride is opening at the local theme park. The escalat- ing mixture of media blitz, promotional hype, and advertising competitive- ness used to get the consumer’s attention does not leave a great deal of room for low-budget local arts organizations to make an impact or be heard. For example, it is not unusual for a movie studio to spend more money advertis- ing one new film than a major arts organization as its operating budget for an entire year.

As we have seen, the economic environment in which arts organizations must function requires constant effort to fi nd the resources to survive from year to year. The need to retain and increase the number of subscribers, ticket buyers, members, or donors also places an enormous amount of pressure on the arts manager. Arts managers with expertise and a successful record of managing marketing and fundraising campaigns are very much in demand. However, because organizations depend so heavily on revenues generated from sales, a decline in income may cause a once-successful manager to fi nd herself sud- denly unemployed.

Today’s arts marketer works with an expanded set of choices that includes a significant diversity of communication channels with consumers. Arts orga- nizations lacking MySpace or Facebook Web pages or video clips featured on YouTube run the risk of dropping even further out of the public eye. However, tapping into the most up-to-date Web sites will not necessarily translate into filling empty seats at a concert. Understanding the concept that the arts are an acquired taste is critical to the development of successful marketing plans (see Marketing and the Acquired Taste For The Arts later). An e-mail or brochure you send someone who seldom, if ever, goes to art events is not suddenly going to turn them into arts consumers.

Let’s take a look at some of the challenges you will face in marketing the arts.

THE SEARCH FOR THE AUDIENCE

No matter how lofty the aesthetic aims of an organization, without the regu- lar support of an audience, patrons, or members, there will not be enough money coming in to keep the enterprise alive. In other words, there must be enough demand for the product, or the enterprise will be out of business.

Before the advent of “marketing,” arts organizations had a fairly standard set of activities that they undertook in an effort to create enough demand for a show or an exhibit. A press release announcing the upcoming event was sent to the local papers (a photo or two may have accompanied the release) and posters were put up wherever they were allowed. Flyers were sometimes dis- tributed, a few very small advertisements were placed in the paper, and a low- cost brochure was mailed out to names on the mailing list. If the organization was lucky, a preview article might appear in the arts section of the local paper. Organizations with larger budgets placed bigger ads in the paper, and they sometimes ran a few radio or television commercials.

Some managers and board members wondered why, after the term marketing

came into vogue, their arts organization continued to do the same things but spent twice as much money to get the same audience. What happened was that organizations began to realize that they were really not engaged in mar- keting. They were still trying to sell events in a scattershot method to an ill- defined public. As a result, they wasted a great deal of money trying to convince people to buy their product without really knowing to whom they were selling. Spending more on advertising, in this case, was wasted money and effort.

As you see in this chapter, marketing requires that the organization adapt and change its fundamental perceptions about its relationship to consumers. Marketing requires the adoption of a customer-orientated perspective that is often unfortunately perceived as incompatible with the fundamental mission of arts organizations. Selling, on the other hand, which is what most organi- zations do, means that the organization tries to get the consumer to buy the product because it believes the product is inherently good and would be ben- efi cial to the consumer.

A means to an end

No matter what term is applied to the energy and resources used to find, develop, and keep an audience or membership base, these activities are still only a means to an end. Philip Kotler and Joanne Scheff noted in their defini- tive text, Standing Room Only, that we must view marketing as “a means for achieving the organization’s goals, and using marketing and being customer- centered should never be thought of as the goal in itself.” 1

Let’s now look more closely at the definition of marketing and many of the key concepts inherent in this vital area of study.

MARKETING PRINCIPLES AND TERMS

A key part of any arts organization’s strategic plan is how it plans to market itself. The marketing plan normally forms a major section in the foundation of an organization’s strategic approach to its long-term growth. We will see how the term marketing is often used incorrectly to describe various promo- tional activities that organizations undertake.

The American Marketing Association’s definition of marketing “is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and soci- ety at large.”2 From the arts manager’s perspective, a key phrase in this defini- tion is “value for customers.” The experience of being an audience member is at the core of what our customers value. The job of the arts marketer, based on this defi nition, is to have an effective process in place to communicate and deliver to the arts consumer the value to be found in the experience offered in the music, opera, theater, or dance production or the visual arts experience.

Needs and wants

The marketer strives to achieve a match between human wants and needs and the products and services that can satisfy them. In theory, the better the match of wants and needs to the product or service, the greater the satisfaction. Marketers defi ne a need as “something lacking that is necessary for a person’s physical, psychological, or social well-being.”3 Psychological needs (such as knowledge, achievement, and stability) and social needs (such as esteem, sta- tus, or power) are shaped by the overall value system of the culture.

A want is defined as “something that is lacking that is desirable or useful.”4 Wants are intrinsic to an individual’s personality, experience, and culture. You may have a need for knowledge, but you want to pursue an idea from a spe- cifi c book. You need to eat, but you want a particular brand of pizza.

When you have needs and wants to satisfy, two other marketing principles come into play: functional satisfaction and psychological satisfaction. When we purchase an item like a refrigerator, we achieve a functional satisfaction because of the tangible features of the product. When we purchase a car, we may satisfy a functional need, but a particular make and model may provide an intangible psychological satisfaction for recognition or esteem.

Discussion Point: Marketing and the Acquired Taste for the Arts

Obviously, functional satisfaction and psychological satisfaction are not neu- tral terms. Americans have attitudes and beliefs about products that have been shaped by advertisements in print and electronic media. Accordingly, the “goal of (the) marketers (is) to gain a competitive edge by providing greater satisfaction.”5

Unfortunately, for many consumers, the idea that a fi ne arts event could pro- vide a degree of satisfaction is foreign. This is due in large part to the fact many more people than we care to realize have not been to an arts event in years, or in many cases, ever. After all, there is no shortage of opportunities to be entertained though the mass media. As noted in the previous chapter, the NEA public participation research indicated 17.1 percent went to musi- cal theater productions.6 If that is the case, then we might assume that 82.9 percent of the adult population did not go to musical theater productions. Opera, which by many accounts is enjoying solid attendance numbers around the nation, had 3.2 percent7 of the adult population attending, meaning that 96.8 percent of the adult population did not go to the show.

Arts organizations typically do not see their role as appealing to the mass audience, nor do they have the fi nancial resources to do so. In fact, as Heilbrun and Gray point out in their book The Economics of Art and Culture , “Art is said to be an acquired ‘taste,’ in the sense that you have to be exposed to it in order to develop the taste.”8

This observation leaves us with the interesting conundrum. Can marketing the arts experience really help people acquire the behavior pattern of going to the arts? If someone has never been to the opera, are they likely to attend based solely on the ad in the newspaper or the brochure you mailed them? For someone who already has the acquired taste for opera, the ad in the newspaper is a reminder to buy their ticket if they have not. For the rest of the newspaper readers, the ad probably was not even noticed. The humor- ous phrase often heard among marketers is that “50% of all our advertising expenditures are wasted. The problem is we don’t know which 50%.”

Exchange process and utilities

Wants and needs are satisfi ed through the process of exchange, which occurs when “two or more individuals, groups, or organizations give to each other something of value to receive something of value. Each party must want to exchange, believe that what is received is more valuable than what is given up, and be able to communicate with the other parties.” 9

For example, suppose that you want to hear a piano recital, and there is a pianist who wants to perform. You make the decision that the time you are spending listening to the artist and the money you give up for the ticket are worth the exchange. The pianist believes that the fee she is paid and the sat- isfaction derived from playing will be rewarding. The performance and the recognition of applause by the audience complete the exchange process. Performers sometimes forget just how important this final communication really is for the audience. The level of satisfaction felt is greatly diminished when the performer walks off the stage without acknowledging the audience.

The exchange process depends on four utilities that marketers have identified as form, time, place, and possession. The utilities interact as part of the exchange process in ways that promote or hinder the fi nal exchange or transaction.

The form utility simply means the “satisfaction a buyer receives from the physical characteristics of the product.”10 Attributes such as style, color, shape, and func- tion affect the exchange. Arts organizations that have gift shops must be very sensitive to this utility because the customers usually have fairly sophisticated tastes, and fi lling the shop with cheap plastic products will do more harm than good for the organization. Unique, high-quality items may provide the organi- zation with a chance to build a strong bond with the discriminating buyer.

Except for the printed program, a performance does not offer any form of util- ity. The live performance is, as we all know, an intangible experience. However, the psychological satisfaction gained from the event can form a powerful bond between the audience and the organization. The memories that trigger emotional and intellectual responses in relation to a particular performance or exhibit can help build a lifelong relationship between the arts organization

and the consumer. In fact, reminding patrons of that experience is an impor- tant part of the marketing communications plan of an arts organization.

The time and place utilities, which involve “being able to make the products or services available when and where the consumer wants them,”11 have a direct impact on arts organizations. Arts organizations usually have little flexibility when it comes to time and place. The customer has the choice of either com- ing to the performance at a specifi c time and a specifi c place or not seeing it at all. Experimenting with different performance schedules or locations or dif- ferent exhibit hours may offer arts organizations occasional opportunities to increase consumer access to their products. However, the live performing arts, by their very nature, will continue to face limitations when it comes to time and place utilities. Television and home recording equipment offers a way of partially overcoming the inherent limitations of the live performance. Live from the Met radio broadcasts, for example, have provided a way for opera to reach audiences that would never be able to attend a production in New York City. Now that the Metropolitan Opera has begun to do live High Definition (HD) transmission to movie theaters, it has greatly expanded its audience base. Art museums also have experimented with different programming and exhibit schedules, as well as using other technology (cellular telephones and iPods) to enhance the attendance experience.

In the News

During Intermission, Cell Phones Are Brandished in a Promotion

By Andrew Adam Newman

Typically you are told to turn off your cell phone before a performance. But at a recent Saturday matinee of “Spring Awakening,” the Broadway musical that garnered eight Tony Awards last week, the audience was told not to do just that.

“Win Your Chance to Come backstage!” said a fl ier inserted into the Playbill, which encouraged theatergoers to send the text message “bdway spring” to a fi ve-digit number before the end of intermission.

Source: The New York Times, June 18, 2007.

The possession utility, which refers to “the satisfaction derived from using or owning the product,”12 has some application in the live performing arts. The tangible items offered by the organization can create a degree of consumer sat- isfaction in much the same way that the form utility did. For example, long- time subscribers often view the seats they regularly sit in as their possessions. For two or three hours on a given night, they do indeed possess those seats. Allowing subscribers to keep their seats each year can be a powerful tool for maximizing on the possession utility. It is also possible to reinforce the expe- rience of having attended through the secondary means of selling souvenir programs or other related material. And while not the same thing as being there for the live event, many performance groups have started selling DVDs in HD through their gift shops or online.

Strategic marketing and the exchange process

As we have seen, the exchange process for consumers of arts products and ser- vices fi ts within the theoretical framework of basic marketing principles. As part of an arts organization’s core strategic planning, it makes sense for the staff and the board to spend time asking very fundamental questions about exactly what they are offering to the public. For example, how does the orga- nization’s corporate structure and philosophy affect its relationship with its audience? Do its programs and activities satisfy the wants and needs of the audience? What mechanisms are in place to get feedback from the audiences about the organization’s programming?

If the organization is to thrive, it must be able to adapt to and plan for chang- ing conditions in the marketplace. “Strategic market planning is a managerial process of developing and implementing a match between market opportuni- ties (i.e., unsatisfi ed wants and needs) and the resources of the firm.”13 This process is not exclusive to the profit sector. One need only look at the neces- sary changes that nonprofi t hospitals have made in the mix of services they offer in the last decade to see how essential organizational adaptability is.

EVOLUTION OF MODERN MARKETING

Marketing has moved through three eras in its evolution. It is important to note that although these phases represent a progression, many organizations still hold to attitudes and beliefs about their product or service that have not changed much in 75 years. As a result, there are no clean breaks in this evolu- tionary development.

The fi rst era is tied to the production and manufacturing techniques that began with the industrial revolution in the eighteenth century.14 The main emphasis up through the beginning of the twentieth century was on fulfill- ing the basic needs of consumers. Mass production techniques dictated an approach of making assumptions about what the consumer wanted and then manufacturing the product in the most cost-effective way. The theory was that consumers would buy whatever was manufactured.

During the second era, more attention was focused on sales of the mass- produced products. The rise of the salesperson as a dominant fi gure in a sys- tem of getting goods to consumers is a part of the American myth. The period after the Civil War was marked by economic growth and expansion. Masses of immigrants came to the United States, which also fueled rapid growth. Thousands of salespeople spread out over the country trying to sell products to people whether they wanted them or not.

The third marketing era is an outgrowth of the diversifi cation of consumer wants and needs that resulted from the demands of unprecedented growth in the economy after World War II. More companies began to pay attention to what consumers were saying about the available products. The idea of a con- sumer-driven economy meant that companies needed to consider their basic relationship with the consumer. The research and testing of products and the application of psychological theories about purchase behavior led to a greater emphasis on developing a long-term relationship with the consumer.

Marketer Profile

Danny Newman — Mr. Subscription Ticket Sales

Danny Newman’s book Subscribe Now! was the source for many arts managers on a quest for how to sell subscriptions (see Additional Resources). Newman worked for the Chicago Lyric Opera since 1954 and helped successfully lead their subscription sales efforts. In 1997 he was nominated for a National Medal of Arts for his efforts as a marketer and consultant. Despite the shift away from enlisting subscribers in favor of more fl exible purchasing options, Newman remained firm in his belief that the best way to build a long-term relationship with audiences is through subscription plans. Many perform- ing arts centers, college and university art departments, theaters, opera, dance companies, and music groups copied Mr. Newman’s approach to building audiences with much success. Gregory Mosher, a well-known theater direc- tor, noted in a September 23, 1997 article in the The New York Times [“The Unsung Hero of Nonprofi t Theater Is Still Selling”] on Newman that, “He’s like Henry Ford...I must have read his book [Subscribe Now!] 100 times.” Mosher went on to note that the subscription series was the cornerstone of the regional theater boom in the United States. The model was based on “a board of directors, a staff led by an artistic director and a managing director, and a six-play subscription series.” The recent trend has been toward letting customers build their own series by mixing and matching a specific num- ber of shows in a season. Exchange privileges become the cornerstone of the “Flex-packs,” as they are often called.

Note: Danny Newman passed away in December of 2007. Used with permission.

Modern marketing

By the 1990s, the concepts of marketing had been applied in just about every segment of profi t and nonprofit business in the United States, including the use of marketing techniques as a way to help candidates get elected. The use of computers to store massive amounts of information about consumer pref- erences and to provide almost instant feedback to companies about what is selling has revolutionized the marketing industry. The ability to track sales

via point-of-purchase systems offers marketers immediate access to information about what people are buying. The ubiquitous bar code now gives the store and the suppliers up-to-the-minute sales information about what people are buying. The use of barcodes on tickets can provide next day information to the arts marketing manager about last nights’ audience.

The rapid rise of the Internet in the 1990s expanded the reach of marketers through e-mail and Web sites. Online sales activity including services such as Tickets.Com, Ticketmaster, and many other service providers has revolu- tionized the process of buying a ticket to an arts event, a museum, a concert, or film.

The proliferation of products designed to satisfy consumer needs and wants has led to an explosion of specialty goods and services. A journey to the supermarket provides evidence of products designed to meet special health and nutritional concerns. In fact, the reality of global marketing has led com- panies to use satellite communications to monitor worldwide sales and to make adjustments in production much more rapidly.

In the News

Nielsen Brings a New Marketing Strategy to Broadway

By Campbell Robertson

“Wicked” is a show for 14–year-old girls. At least that’s what everybody on Broadway was saying. So one of the show’s producers, David Stone, decided to hire a relatively new research fi rm called Live Theatre Events to fi nd out if the assumption was true.

Note: The surveys of the audiences proved this notion of who the audience was for Wicked as incorrect. For more information about the survey fi rm go to www. livetheatricalevents.com.

Source: The New York Times, nytimes.com, August 1, 2006.

Marketing approaches

A company attempting to make a profit usually has different objectives and goals than a local nonprofi t health care center or symphony, but both rely on establishing a positive relationship with consumers. Both private and pub- lic sector companies make plans and state their missions based on satisfying the public’s wants and needs. The mission statement is typically the source of the organization’s goals and strategic plans. The planning process includes defining the function of marketing in the organization. First, let’s look at two approaches to marketing used by a great many arts organizations and then focus on customer-oriented marketing.

Product orientation

Kotler and Scheff characterize the product orientation as one in which the orga- nization believes that “consumers will favor those products that offer the most quality, performance, and features.”15 They cite as examples “a chamber music association that calls itself a ‘society’ performs only traditional music, advertises in only a suburban weekly, and doesn’t understand why it doesn’t attract a younger audience.”16 Product-oriented arts organizations tend to “have a love affair with their products.” 17

Sales orientation

The organization with a sales orientation thinks that “consumers show buying inertia or resistance and have to be coaxed into buying more.”18 Many arts organizations approach marketing from the sales perspective. They think mar- keting is all about advertising, direct mail, e-mail blasts, or telephone solici- tations. These efforts can result in short-term gains in audience. However, because the organization is not communicating from the consumer’s perspec- tive, the sales-oriented organization constantly has to replenish a large num- ber of subscribers or members who do not renew.

Customer orientation

All of the marketing texts seem to agree that organizations that have evolved or start with a customer orientation have the best chance of competing in the world market today. An organization with a customer orientation must “system- atically study customers’ needs and wants, perceptions and attitudes, prefer- ences and satisfactions.”19 To further clarify this definition as it applies to the arts, Kotler and Scheff go on to say:

This does not mean that artistic directors must compromise their artistic integrity. Nor does it mean that an organization must cater to every consumer whim and fancy, as many managers fear. Those who warn
of such consequences if the devil (marketing) is let in the door simply misunderstand what a customer orientation truly means. To restate: marketing planning must start with the customer’s perceptions, needs, and wants. Even if an organization ought not, will not, or cannot change the selection of the works it performs or presents, the highest volume of exchange will always be generated if the way the organization’s offering
is described, priced, packaged, enhanced, and delivered is fully responsive to the customer’s needs, preferences, and interests. Furthermore, who
the customer will be is largely up to the performing arts organization. Marketing will help maximize exchanges with targeted audiences.20

As this quote should make clear, an organization that takes a customer’s per- spective would, for example, use text to describe an upcoming performance in terms that an audience can respond to rather than in the jargon of the profession. If a potential ticket buyer believes that arts events are only for the wealthy and well-educated, and everything the organization does with its promotional activity (ads, brochures, and so on) only reinforces this image, the arts promoter should not be surprised if the consumer feels reluctant to enter into the exchange process. On the other hand, arts organizations usu- ally believe that they shouldn’t have to describe a play like Hamlet as a “gut- wrenching tale of a family caught up in an whirlwind of lust and murder” in order to sell tickets. However, to discover the language that makes the most sense to its potential audience, the organization must engage in some basic consumer research. Research may show that a more dramatic description of

Hamlet would make sense in their market.

An organization’s key to successfully adopting a customer orientation resides in the research done on its community. What are people’s attitudes and per- ceptions about the value of the music, opera, theater, dance, and art programs offered in your community? Based on that research, the customer-oriented arts organization would have several different approaches to communicating with the different audiences in the community. In some cases, the promo- tional campaign might be targeted to educating people about a new work or a new author. In other cases, the organization may focus on the strong emo- tions that a story or a piece of music conveys. For some potential audiences,

Hamlet may spark their interest if described in more emotional terms. The arts marketer must of course be careful about crossing a line that distorts or debases the product. On the other hand, the risk of offending the sensibilities of a small number of the old guard patrons may prove worthwhile if it brings in new customers. However, unless the organization has a method for track- ing the impact of different advertising tactics, these efforts will be wasted.

The lack of money is the problem that most customer- or audience-oriented arts organizations face when it comes time to communicate effectively about the product. The cost of multiple target promotional campaigns is usually well beyond the reach of most groups. However, a marketer would argue that this is money well spent because the objective is to build up long-term audi- ence support and consumer identification with the product. Unfortunately, many arts organizations take a middle ground and ultimately communicate a bland image by trying to straddle too many marketing perspectives in their brochures and publications.

MARKETING MANAGEMENT

The classic four Ps

Using these principles of marketing now allows us to move into the process of marketing management. To market its products or services effectively, an organization must carefully design its marketing mix. Marketing mix is defined as “the combination of activities involving product, price, place, and promotion

that a firm undertakes in order to provide satisfaction to consumers in a given market.”21 Each of these elements will have an effect on the exchange process.

The four Ps, as they are often called, can be manipulated as part of the orga- nization’s overall strategy. For example, if you have a product with a brand name, such as the Metropolitan Opera, you may be able to manipulate the price based on the customer’s perception of quality while stressing the place with its crystal chandeliers and red carpet in your promotional material.

The promotional aspect of the marketing mix is the most visible element, and it is usually divided into a further mix of types of advertising: newspaper, magazine, radio, television, direct mail, e-mail, a Web site, raffles, and other public relations activities (e.g., having a soprano invited onto a local televi- sion talk show or radio program).

The overall marketing strategy for the organization may have several different marketing mixes. Depending on the target audience, you may stress price or product. For example, a group sales fl yer sent to a retirement center may be accompanied by a letter that stresses price fi rst and then product. The same group fl yer when sent to a college or university drama department may be accompanied by a different letter that stresses product fi rst and then price.

With the increasing use of the Internet, marketing strategies can now encom- pass more targeted communications with potential audiences. In fact, many arts organizations have developed many low cost ways to communicate with people who have agreed to receive e-mails from the organization about upcoming events.

Market segments

The marketing manager or director is expected to have a good grasp of the overall marketplace in their community. As we discussed in Chapter 10, Economics and Financial Management, there are many markets in the system of supply and demand, and within the large markets, there are smaller mar- kets for goods and services. Marketers use the term market segment to identify “a group of buyers who have similar wants and needs.”22 Once a market seg- ment has been identifi ed, the marketer begins the process of target marketing

by “developing a mix of the four Ps aimed at that market.” 23

In planning the marketing mix, information is the key ingredient in designing a successfully targeted campaign. For example, if you buy a mailing list from the state arts council with the names of 10,000 people interested in the arts in the state, you have identifi ed a broad market segment. If this list of names is to be useful to you, it will need further analysis. How many of these people attend particular types of performing arts events? Narrowing the list further, how many of these people are geographically close to your performance or exhibition space? After you fi nish narrowing down the list to people within a three-hour driving distance, are there enough names left to make it worth- while trying to target this group?

Mailing lists, which are purchased all the time in profi t-sector marketing, may be far too costly for many low-budget arts organizations; for these groups, the existing audience is the best and most cost-effective resource for additional customers. The marketer’s assumption is that if you consume the arts prod- uct, your friends or colleagues may share similar values. Building e-mailing lists by simply asking for your current patrons e-mail addresses is a low-cost way of expanding your audience base. In fact, many arts organizations are dis- covering that by establishing a Web presence on social networking sites such as Facebook and MySpace they can effectively connect to people interested in the arts.

Managing your brand

One of the key components in your overall marketing management is your “brand” as an organization. The reputation you establish and the perception of your organization in the community typically falls under this notion of your brand. The American Marketing Association (AMA) defi nes brand as “A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.”24 There are several well- known arts organizations with strong brand name recognition. The typical list might include organizations like the Cleveland Orchestra, Guthrie Theater, Metropolitan Opera, Royal Shakespeare Company, American Ballet Theatre, Chicago Symphony, and the Smithsonian. Each of these organizations has many of the attributes associated with a strong brand name or image.

However, you do not have to be the Metropolitan opera to have a strong brand associated with your organization. Within your region there are likely to be several arts organizations that may have a strong brand. The brand typi- cally is associated with the perceived quality of work they do as an organi- zation. The arts marketer needs to assess what the brand image of your organization may be in the community. If you are the X or Y theater or dance company, what are the fi rst words that pop up in conversation about your organization? If an organization lacks a strong brand, one way to build it would be through a tag line used in all the marketing materials. For example, American Ballet Theatre calls itself “America’s National Ballet Company,” and uses the ® trademark after its tag line. Manhattan Theatre Club uses the phrase “New Voices, New Works, New Perspectives,” as a tag line for branding its dis- tinctive production approach.25

Branding Resource

An excellent resource on branding may be found in DK Holland’s book Branding for Nonprofi ts: Developing Identity with Integrity. She offers this observation:

At its most fundamental level, branding is driven by the human need to distinguish one thing from another. Think of all those old Westerns in which cows wandered onto some other rancher’s range, causing all kinds of trouble:
It was the rancher’s brand that protected his herd — his livelihood! On a more abstract, organizational level, the brand promotes the identity and underlying values of a unique culture by communicating the messages, products, and services created by that culture.

Source: Branding for Nonprofi ts: Developing Identity with Integrity by DK Holland, Allworth Press, New York, NY, 2006, p. 5. Used with permission.

Market research

To engage effectively in various forms of target marketing, much detailed infor- mation about the potential arts consumer must be known. Understanding the demographics (age, income, education, gender, race) and having an informed psychographic profile (consumer beliefs, values, attitudes) of the potential consumer is crucial to designing the marketing mix for the target market.

Marketing researchers in the profi t sector have been developing various behav- ioral and psychological models in an attempt to make target marketing as cost-effective as possible. The thrust of this work is to divide consumers into lifestyle segments based on such things as activities, interests, and opinions.

A classic example of the psychographic approach (based on a behavioral profile) to understanding consumer behavior can be found in the pioneer- ing work in the 1980s by Arnold Mitchell in his book The Nine American Lifestyles .26 His research resulted in a more elaborate version of Maslow’s hier- archy of needs. Mitchell developed a hierarchy chart representing segments of the population as a way to identify consumer behavior. Mitchell called his chart a Values and Lifestyles Segment or VALS distribution.

The Association of Performing Arts Presenters (APAP) hired Mitchell in 1984 to conduct a study of arts audiences. In his report, The Professional Performing Arts: Attendance Patterns, Preferences and Motives,27 he found that four groups, which at that time made up about 66 million people, were the primary market for arts organizations. He called these groups the Achievers, the Experientials, the Societally Conscious, and the Integrateds. Of these four groups, the Societally Conscious (12 percent of the population) were the best market per capita. Mitchell also found that among these four lifestyles, the most common reason cited for attending an arts event was to see a specific show, performer, or group.

He also found that even among these targeted groups, large percentages admit- ted that they never attended arts events. For example, an average of 28 percent never attended music concerts, 40 percent never attended theater productions, and 68 percent never attended dance events. His research found that lack of leisure time (30 percent), preferences for other leisure activities (34 percent), and not wanting to commit to season or series purchases (33 percent) were the primary reasons given for not attending. (For an updated report on audience segmentation go to www.wolfbrown.com/index.php?page        mcps.)

Another approach to target marketing — one designed to help businesses connect with the consumer — is detailed in The Clustered World by Michael J. Weiss. Weiss’s book, published in 2000, examines the work of a market research company. Claritas Corporation (www.claritas.com/claritas) devel- oped a system that uses a vast mix of census data to produce information that marketers buy to locate the people who might be disposed to buy their prod- uct. The Potential Rating Index for Zip Markets (PRIZM) system uses a zip code analysis of various neighborhood types. For example, Claritas’ research has identifi ed the two clusters for classical music and named them Blue Blood Estates and Executive Suites.28 Blue Blood Estates represent a small percentage of households with median incomes of $113,000. The Executive Suites were listed with incomes of $58,000 and also liked espresso makers, dry cleaning, and Cooking Light magazine.29

The objective for an arts marketer using the Claritas system is to develop a database of the zip code distribution of its list of current subscribers and, at the same time, to gather information about the zip code distribution of the single-ticket buyers and to compare the data with the neighborhood types. At this point, the marketer could determine which areas the organization has not reached. Buying a list of labels from the local utility company would allow the organization to send targeted mailings to households in the zip code neighborhoods that the organization has identifi ed as potential customers.

Ultimately, a system such as the one Claritas has developed should allow an arts marketer to target potential audiences by very narrow segments. After all, why should an arts organization waste its limited resources doing mass mail- ings when carefully targeted mailings to “the right people” will yield much more cost-effective results?

In 1996 NEA published a comprehensive report titled “Age and Arts Participation.”30 The data was gathered as part of a Survey of Public Participation in the Arts (SPPA). The report identifi ed seven age groupings, called cohorts, and analyzed the attendance patterns at classical music, opera, ballet, musicals, jazz, plays, and art museums. The highlights of their research included:

■  The generation born 1936 to 1945 had very high attendance percentages at classical music concerts, opera, musicals, and plays.

■  Younger cohorts (people born after 1946) had higher attendance percentages at jazz concerts and museums.

■  Concerns were raised in the report about the fact that the generations born after World War II, despite better education levels, were not attending arts events to the same degree as the older generation.

■  The report indicated that younger cohorts (after 1946) substituted television, cable, and radio broadcasts or videotapes and compact discs for live performing arts events.

Other arts research

The PRIZM approach to market research can be very expensive to purchase and is out of reach for most small arts organizations. Other sources to consider for marketing information include the research division of the National Endowment for the Arts (www.arts.endow.gov/pub) that regularly publishes useful data. The

Journal of Arts Management, Law, and Society and the International Journal of Arts Management also include articles on the latest arts marketing research. (Note: For more information go to www.heldref.org/jamls.php or www.hec.ca/ijam.) Another excellent source for marketing ideas is the comprehensive anthology published in 1995 by ARTS Action Issues titled Market the Arts!

Arts organizations should regularly survey people in their community for feedback on new programs and on problems with existing operations. A properly designed survey can give an organization the opportunity to adjust and change its marketing mix.

The use of the Internet and Web sites can be a low-cost way for arts organiza- tions to gain continuing feedback from audiences. Online surveys or e-mail feedback about shows can be a useful way of keeping in touch with customers. Operating a Web blog has become more common as arts organizations adapt to the new technology, and as noted, by setting up Facebook or MySpace accounts.

The use of small focus groups is also a low-cost alternative for arts organiza- tions. Focus groups of up to 10 or 12 may provide useful insights about the attitudes and perceptions of your audiences to your image and your advertis- ing. Suggested resources for surveys are noted at the end of this chapter (see Additional Resources).

The New Rules of Marketing

David Meerman Scott’s book The New Rules of Marketing & PR (John Wiley and Sons, 2007) offers the perspective that the World Wide Web offers organi- zations direct access to potential buyers that bypasses the media as we know it. He argues that the old style one-way communication methods for market- ing and PR are no longer as effective. He points out that many Web sites built by companies, many of them billion-dollar businesses, do not understand that a Web site is much more than a sales tool. He notes that the Web sites that are most effective are the ones that understand the interaction and quest for knowledge is a major force that drives Web site usage. In addition to Web sites, the growth of social networks on the Web such as Facebook and MySpace present new opportunities to bypass the conventional marketing channels. Scott’s Web site is www.webinknow.com.

Arts organizations that just try to “sell” their shows are missing a great oppor- tunity to engage their potential audience. For example, the Chicago Symphony Orchestra Web site has a section devoted to “Discover Classical Music.” There are links to a “Classical Music Glossary” and an “Ask an Expert” section that allows people to post a question they may have about a wide range of ques- tions relating to music. Another interesting arts organization Web site may be found at the Indianapolis Museum of Art — www.imamuseum.org. This site offers the visitor a large number of choices in exploring the museum, its col- lection, and its programming.

Marketing ethics

Whatever approach is used in marketing research, the goal is to fi nd out what the consumer thinks about the product or service. Marketers believe that with the right information they can better predict which combination of product, price, place, and promotion is needed to complete the exchange process on a regular basis with consumers. To bridge the information gap, marketers look to even more sophisticated applications of computers in their work. As a result, the line between market research and invading people’s privacy has grown very thin. The selling of vast amounts of information about consum- ers is now a fact of life. Michael Weiss pointed out back in 2000 that “the information gathering business is booming, projected to grow to a $10 bil- lion industry this year.”31 As computers have increased in their data storage capabilities and programmers have become even more sophisticated in pro- gramming software, the ability to profile consumers will only continue to intensify.

The arts marketer now has at their disposal a powerful research tool: their organization’s Web site. More and more organizations are realizing the poten- tial inherent in a system that is driven by the potential audience member coming to you, rather than you trying to go to them. Taking the customer’s perspective about the organization’s Web site can have long-term benefits to developing audiences.

Arts organizations, which depend on the sales of tickets and subscriptions for 60 percent or more of their operating budget, face a dilemma. How intrusive should they be when trying to reach potential arts consumers? Arts organiza- tions want to identify and target people who are most likely to be long-term consumers of their product. Techniques such as telemarketing, if handled properly, can lead to direct contact with consumers. On the other hand, people resent phone calls and “sales pitches” that intrude into their private lives. In fact, while nonprofi t organizations are given a protected status by the National Do Not Call Registry, consumers have been much more aggressive about blocking phone calls. Online surveys to people who have indicated they wanted to be on your e-mail list are certainly less intrusive and give the patron the chance to participate or not.

Marketers for arts organizations must also face the ethical issue of selling information about their customers to commercial fi rms. The arts consumer is a prime target for the marketer of upscale goods and services. Research has shown that arts consumers have more than the average amount of discretion- ary income and are therefore good targets for a wide variety of marketing assaults. Having policies in place that restricts how your data are shared will go a long way toward calming any fears your patrons may have about build- ing a fi le on them.

consumers of their product. Techniques such as telemarketing, if handled properly, can lead to direct contact with consumers. On the other hand, people resent phone calls and “sales pitches” that intrude into their private lives. In fact, while nonprofi t organizations are given a protected status by the National Do Not Call Registry, consumers have been much more aggressive about blocking phone calls. Online surveys to people who have indicated they wanted to be on your e-mail list are certainly less intrusive and give the patron the chance to participate or not.

Marketers for arts organizations must also face the ethical issue of selling information about their customers to commercial fi rms. The arts consumer is a prime target for the marketer of upscale goods and services. Research has shown that arts consumers have more than the average amount of discretion- ary income and are therefore good targets for a wide variety of marketing assaults. Having policies in place that restricts how your data are shared will go a long way toward calming any fears your patrons may have about build- ing a fi le on them.

There are many sources for what the latest thinking may be about how to best maximize on the evolving technology. One such source is PatronMail®, which publishes an e-newsletter featuring the e-marketer of the month. The free newsletter is available at patronmail@patrontechnology.pmailus.com

STRATEGIC MARKETING PLANS

Now that the basic principles of marketing have been outlined, let’s examine in more detail the critical planning process shown in Figure 11.1. As noted earlier in this chapter, if the marketing plan is to be effective, the entire orga- nization must carefully consider how all phases of the operation relate to the dynamics of the marketplace. The simple fact facing all organizations is that new opportunities and new threats arise in the marketplace every day. An organization that can adjust to these changing conditions has the best chance of surviving in the long run.

Some board members may wonder why an organization such as a museum or some other well-established performing arts institution would need to worry about the changing dynamics of the marketplace. After all, won’t people always go to the museum or to the symphony? Why should an organization spend time planning, reviewing its mission, devising strategies, and develop- ing objectives when what it does is so obvious? Citing the examples of dance companies that have failed, museums that have had to reduce their hours and staff, and orchestras, theaters, and opera companies that have filed for bank- ruptcy should be enough to counter any argument that strategic marketing plans are a waste of time.



Marketing Initiatives

Here’s an example of an initiative sponsored by the Theatre Communications Group (TCG) to help attract new people to theaters across America.

Free night of theater

Free Night of Theater is TCG’s annual national audience development program to attract new theatergoers to America’s not-for-profit theaters. Since the pilot program debuted in 2005, Free Night has increased in scope and participation each year. For more information go to www.freenightoftheater.net.

Planning process

The organization’s overall strategic plan (discussed in Chapter 5, Planning and Decision Making) needs to incorporates the marketing plan (see Figure 11.1). The organization’s objectives drive the mission, goals, and objectives of its marketing plan. In addition, as noted in Chapter 4, The Adaptive Arts Organization, an analysis of opportunities and threats from the external environments (economic, demographic, political and legal, social and cul- tural, technological, and educational) is weighed against the organization’s strengths and weaknesses.

Once the basic mission and objectives of the organization have been defined in the strategic plan, the core marketing strategy can be developed. The tar- get markets and the proposed marketing mix can be articulated. The process now moves to the final stage by providing the system for carrying out the marketing plan, including what performance criteria will be used to moni- tor progress. In addition, the specifi c tactics can be formed. Implementation plans and an evaluation system complete the process. The evaluation process should provide feedback to the core marketing strategy for long-term adjust- ments and directly back to specifi c tactics for short-term changes. For example, a short-term change might be to revise an advertisement in the paper when there is poor response to a particular offer. A long-term adjustment might be to evaluate all print media.

Marketing audit

One method that an organization might use to assess its ability to carry out a marketing plan is to do a marketing audit. Essentially, an audit consists of asking and answering a series of questions that explore the organization’s markets, customers, objectives, organizational structure, marketing informa- tion system, and marketing mix. The Sample Marketing Plan in this chapter gives you a starting place for preparing an audit. The audit gives the staff and the board a common ground on which to build a marketing plan that fits the organization’s mission and function.

Sample Marketing Plan

The fi rst step in developing your marketing plan requires you to assess the current status of the organization. Depending on your organization, there may be additional questions you need to pose. Therefore, the items below should be viewed as a guide and not as the only questions you could raise.

1. Organization Profi le and Audit

■  Name, type of arts organization, location, brief history, and years in existence

■   Programs and projects currently listed by the organization, or special performance or exhibition activities

■  Mission, goals, and/or objectives statements published? Is it posted on the Web site? Is the mission clear? Are the goals connected to the mission, and do they seem achievable? Are the objectives and priorities clear about who, what, and when?

■  Is the organization operating under a current strategic organizational or marketing plan? If yes, what is its planning and implementation process? Review brochures, fl yers, website, and other documents used by the organization in its current marketing activities. Are these pieces effective? Is the Web site updated frequently?

■  Is the organization operating within its budget? Is it a financially healthy organization? Does it have a budget surplus or deficit? Are the board and management functioning effectively?

2. Environment Analysis

Demographic

■  What major regional and national demographic developments and trends pose opportunities or threats for this organization?

■  What actions, if any, has the organization taken in response to those developments?

■  Economic

■  What major developments and trends in income, prices, savings, and interest rates are affecting the organization?

■  What major changes are taking place in the sources and amounts
of contributed income (from individuals, corporations, private and public foundations, and government agencies)?

■  What actions has the organization taken in response to these developments and trends?

■  Political

■  What recent local, state, or national legislation has affected this organization?

■  What federal, state, or local agencies should be monitored for future actions relating to the organization?

■  What actions has the organization taken in response to these developments?

Cultural

■  What changes are occurring in consumer lifestyles, values, and educational opportunities that might affect this organization?

■  What actions has the organization taken in response to these developments?

3. Challenges and Opportunities

Challenges: Depending on how you answered the questions above you may have a series of specifi c challenges facing the organization, such as but not limited to the following:

■  Declining subscriber base

■  Increased competition from other arts organizations

■  Lack of marketing technology

■  Lack of single-ticket buyers or members

■  Need to diversify audiences

■  Poorly focused target marketing

■  Lack of commitment to customer orientation by the organization

Opportunities:

■  State the opportunities you see that will help meet the challenges facing the organization.

■  State these opportunities as facts, not strategies or objectives. For example, you found that a challenge facing the organization was a declining subscriber base. The opportunity is “potential exists to

increase subscriber base.” Even if your organization is “perfect,” you may still have opportunities to venture into new areas such as merchandise or adding an experimental performance series.

4. Objectives

Formulate objectives for the marketing plan based on the factual statements you have made. For example, if you stated “ opportunity exists to increase the subscriber base,” you could state objectives for each of the areas below. For example:

■  Marketing: Objective will be to increase the subscriber base by a net of 5 percent in the next fiscal year.

■  Financial: Objective will be to increase earned income from subscriptions by 5 percent above the previous fiscal year.

5. Marketing Strategy

In this section you outline your game plan for achieving all the objectives you set for yourself in:

■  Target Markets: Who will be targeted?

■   Positioning: What will be your positioning statement to sell to these target markets? “We are the only orchestra group performing the work of composer X in the tri-cities area.”

■   Product: Describe the product in customer terms that your research says these target markets find appealing.

■   Price: How will you use price to achieve your objectives?

■  Distribution: Will you expand access to tickets by selling through the organization’s Web site, Ticketmaster, or Tickets.com?

■  Sales Force: Changes needed to achieve objectives? Hire more staff?

■  Service: Any changes in how services are delivered? Extra hours? 800 number? New Web site? E-mail enhancements?

■  Promotion: All forms of promotion. What specifi cally do you plan to do? Will you use direct and e-mail or telemarketing, radio ads, PSAs, interactive Web site or what? In other words, what will be your media plan?

6. Marketing Process

Detailed Action Plans

■  What will be done?

■  Who will do it?

■  What will be the benefit?

Timetable

■  When will the action plan items be done? (Detail each action plan in a list or on a calendar.)

■  Budget

■  How much will it cost? (Detail all the costs of the plan: graphics, printing, advertising, Web design, etc.)

7. Controls and Evaluation

How will you monitor your progress? What kind and how frequent will be the reports? Create forms and reports for how you will measure your success in achieving the objectives you set for yourself and the organization.

Consultants

It is usually helpful to get the perspective of outside consultants when formu- lating any strategic or marketing plan. Someone with expertise in planning can save an organization a great deal of valuable time struggling through the planning process. As noted in Chapter 5, planning is hard work, and because of the pressing daily needs of keeping the organization afl oat, managers often assign this essential process a low priority. A consultant, if used effectively, can shake up the status quo and act as a catalyst to put planning at the top of the priority list. You may have a board member who can be particularly helpful with either being a consultant for you, or directing you to a fi rm that will do some pro bono consulting for your organization. A word of caution, though: Consultants are not infallible, and they have been known to make mistakes. They can give bad advice and make recommendations that make conditions worse, not better. A background check of former clients is a requirement for organizations that want to protect themselves.

Strategies

The profit sector uses terminology borrowed from warfare when developing marketing strategies. Marketers use such terms as frontal, encirclement, flank- ing, and bypass attacks to describe marketing plans. Words such as preemptive ,

counteroffensive, and contraction are used to describe strategies.32 Other options for organizations to explore include market leader, market follower, and market niche strategies. Let’s look briefly at the competitive environment facing many arts organizations and discuss strategy options.

The competitive marketplace and core strategies

When a community reaches the point in its growth where it has at least one professional arts organization from each of the major disciplines, the struggle for resources among these organizations will probably intensify. Arts people may carry on a cordial and friendly dialog in public, but competition is tough and there are only so many dollars that people will spend on subscriptions, tickets, memberships, and donations. As we have seen, arts organizations also face competition for the entertainment dollar from DVD rentals, films, televi- sion, online games, and amusement parks.

In formulating a plan of attack, an arts organization might consider a niche strategy. Such a strategy focuses on the qualities that make a live performance arts event or a trip to the museum a unique activity. The niche strategy can be combined with a differentiation strategy in an effort to feature those things that are unique about the product. This strategy combination allows the organiza- tion to concentrate on what is special about its product while appealing to a targeted market.

If the organization’s planning process leads to a decision to expand its audi- ence base beyond the typical demographic blend, a strategy to increase mar- ket share would be appropriate. In this growth strategy, the organization takes an aggressive advertising and Web presence approach to reach new audi- ences. For example, if a theater company wanted to develop its market among African-Americans in the community, an advertising campaign using specific media publications, Web sites, and radio stations with a high ratio of minor- ity consumers would make sense. Also, targeting group sales by using the local network of African-American religious groups might prove successful. However, if the arts organization does not regularly offer a product that has some market appeal to members of various minorities, there is little chance that this strategy will succeed. Another niche strategy may be developed through the organization creating a social networking presence.

Whatever overall marketing strategy an arts organization selects, it is impor- tant to remember that it must fit with the mission of the organization. Care must be taken to avoid shifting the organization away from its mission to meet a market strategy. For example, museums are not in the gift shop busi- ness, but because these operations can become very healthy sources of cash, it is tempting to overemphasize their importance in marketing the organization.

Project planning and implementation

The details of preparing, budgeting, and implementing the marketing plan require careful attention. Decisions about where to put the usually very lim- ited marketing resources available to the organization can make or break a plan. The work done on researching the community and a detailed cost anal- ysis of various media campaigns will pay off in the project planning stage. Organization and project management skills are required to prepare the over- all schedule and budget distribution for the marketing campaign.

Evaluation

After implementing the plan, the organization must carefully evaluate and monitor how well its objectives are being realized. For example, if the costs of implementing the strategy exceed the budget, and the number of new sub- scribers or members is below the levels established for success, the organiza- tion must be able to adjust its tactics or to revise the entire strategy before it is too late. As noted in Chapter 5, Planning and Decision Making, the failure to abandon a plan that is not working can lead to numerous problems.

Marketing data system

Within the organization’s overall management information system and finan- cial management information system, you should also establish a market- ing data system (MDS). Its purpose is parallel to that of the MIS. The MDS should be designed to gather and analyze data regularly and to issue reports



on the success of current campaigns. Figure 11.2 shows a typical MDS for an arts organization. The four major sources of data are the sales system (box office), audiences, staff, and various external environments. If the system is working properly, the feedback provided to the marketing staff will arrive in time to make corrections and adjustments in the marketing plan. With some sources of information, such as surveys, the data gathered could be translated into information that is useful in planning future seasons or programs.

Computers play a central role in gathering and processing data for the MDS. As we saw in Chapter 9, Operations and Budgeting, the MIS and the FMIS must be linked with the marketing data system if the organization is to monitor its operations effectively. It is essential that the organization have a network of computers that share data among the marketing staff and other members of the management team to enable the marketing plans to be suc- cessfully evaluated. The complexity of such a system may require hiring out- side consultants to coordinate and advise the marketing manager. Without the ability to track all sales data quickly and accurately, the marketing manag- er’s effectiveness will ultimately be seriously undermined.

CONCLUSION

Marketing can be an effective tool for keeping an organization growing and evolv- ing. However, marketing is also a long-term investment. A well-organized market- ing campaign should be integrated with operational and long-term organization plans. It makes no sense to attempt a marketing plan without having first clearly defined the mission and goals of the organization. Like any tool, marketing can be misused. Thousands of dollars can be wasted on advertising campaigns, a new Web site, or printed brochures that have little or no impact on sales.

Don’t forget the audience

Ultimately, it is important to recognize how complex the purchase and atten- dance decision process is for the potential audience members. It can be easy to become enamored of the potential of the Internet and the extended activi- ties now wrapped around the notion of Web 2.0. There is certainly a great many opportunities to take advantage of what the Web offers relative to social networking, Weblogs, wikis, podcasts, and Really Simple Syndication (RSS) capabilities. However, keeping focused on the decision steps required to actu- ally participate as an audience member should never be taken for granted.

First, the potential audience member must achieve awareness of the event, then they have to decide if what you are offering is of interest to them, which takes us back to the important concept of taste. They may go to your Web site for more information about the show or they may ask friends what they thought, but ultimately the decision about taking the next step often does not happen. However, if they remain interested, then they must check their sched- ules to see if the dates and time you are performing fi t in their schedule. Ticket costs are also probably part of the mix in reaching the purchase decision.

Assuming all of those decision points are yes, then they must make contact with your ticket offi ce and engage in the actual purchase process. If the tech- nology you have for processing orders is easy to use, they probably ordered their tickets online. Or, they may want to talk to a ticket sales agent. Did they have to wait for a long time to get through to someone? While they were waiting, did your phone’s voice message system offer them more information about your venue or the productions currently playing?

After securing a ticket or making a reservation they need to decide what to wear, make arrangements to travel to your venue, fi nd a place to park, find their way to their seat, and participate as an active audience member by enjoy- ing (or not) your show. Then they have to negotiate the traffi c and get back home before they can actually complete the experience.

As you can see, your average frequent attendee must be very well motivated to go through this process. Although people in the performing arts stress what is unique about a “live performance,” it is also apparent that it is much easier to rent a DVD, or select a Pay Per View movie, simply watch television, or go online and explore the endless opportunities of the World Wide Web.

Unfortunately, there are no guarantees that your best plans to attract audi- ences will work. For organizations with limited resources, experimenting with different approaches to marketing may be out of the question. While the Internet has certainly helped level the marketing playing field, a Web site or a blog is not going to be everyone’s preferred method of seeking information. In fact, there is bound to be a percentage of your audience who still do not fi nd using a computer a worthwhile activity.

Finding the most cost-effective way to reach audiences across a broad spec- trum of age and income demographics can be a challenge when there are lim- ited funds for research. The pressure on the marketing and public relations staff, which may be only one or two people, can become debilitating. It is not surprising to fi nd high turnover in an arts organization’s marketing and pub- lic relations staff. Impossible goals, limited resources, and poorly conceived plans take their toll on even the most ambitious people. Upper management involvement and commitment to planning and implementation can go a long way toward remedying the problems that arts marketers face.

The most daunting task facing any arts marketer is the development of future audiences. The simple reality of a very limited audience base coupled with the ever-increasing competition from other entertainment options makes for a difficult mix of circumstances. As most arts marketers know, unless you can establish a pattern of arts consumption at an early age, it is both difficult and costly to change people’s leisure time behavior later in life. The arts marketing effort will no doubt continue, and wherever appropriate, the arts marketer will borrow from the commercial marketing world those techniques that work.

For students interested in a challenging fi eld of work, arts or nonprofit mar- keting has a great deal of potential. The use of language and images to express an idea or to convey an organization’s mission demands a great deal of skill and creativity. Because this chapter is just a glimpse into the world of market- ing, students are urged to explore the readings listed in Additional Resources at the end of this chapter. A college undergraduate course in marketing would also be helpful to the future arts marketer.

SUMMARY

The arts manager must plan, organize, implement, and evaluate market- ing strategies to maximize revenue and meet the organization’s objectives. Because of the bombardment of marketing efforts by a multitude of busi- nesses and causes, the arts manager must dedicate signifi cant resources to marketing if the organization is to be visible in the highly competitive enter- tainment marketplace. Marketing is a means to an end, and it should be thought of as one more tool available to the arts manager to be used in real- izing the overall goals of the organization.

Contemporary marketing attempts to match the wants and needs of consum- ers with products and services. Needs are physiological and psychological things that are lacking and are necessary for people’s well-being. Wants are things that are lacking and that people fi nd desirable or useful. People can gain functional and psychological satisfaction from tangible and intangible features of products or services.

Marketing activity is designed to facilitate the exchange process. This process involves a transfer of something of value between two or more parties or orga- nizations. The exchange process is successful to the degree that the utilities of form, time, place, and possession can be satisfi ed through the exchange. The arts exchange usually involves satisfying a psychological want through the intangible features of an experience, which is modifi ed by the inherent con- straints placed on the four utilities by the delivery system (the performance or exhibition).

Marketing has seen significant evolution over the last 100 years. The produc- tion era, which grew out of the Industrial Revolution, concentrated on sat- isfying basic needs. It was assumed that people would buy whatever was manufactured. The sales era, which concentrated on increasing demand, began sometime after the Civil War. More emphasis was put on customers’ wants, but the manufacturers still dictated what would be available to pur- chase. The marketing era, which came to the fore after World War II, reversed the relationship between the consumer and the manufacturer. The con- sumer-driven market relationship starts with what the consumer wants, not the product. The continued development of the Internet has also meant that consumers can do their own research without the marketer’s message filters mediating the interaction.

The way an organization markets itself and establishes a brand still depends a great deal on how the marketing is viewed from within the organization. A great deal of the marketing done today is classifi ed along the same historical approaches of product, sales, or customer-oriented marketing. The product- oriented company assumes that its product is inherently good and needs no changes. The sales-oriented company concentrates on trying to increase demand for existing products and services. The customer-oriented company determines the perceptions, needs, and wants of the market and goes about creating a product to fi t those needs. Arts organizations can and do use these three orientations. The market-oriented arts organization thrives if it under- stands the market’s perception of its product and describes, prices, packages, and delivers its product to refl ect those perceptions. It does not mean that the organization must change the product to attract customers.

Marketing management is based on the organization’s manipulation of the four Ps — product, price, place, and promotion — or the market mix. The market mix can be adjusted to suit the target market. Market research has shown that people with various demographic and psychographic profiles react differently to various marketing mixes.

The entire marketing process should be directly related to the organization’s strategic plans. The main objectives of the strategic plan are incorporated into the marketing plan. An analysis of external environments and the strengths and weaknesses of the organization are also included. A detailed audit process may be used to assess the organization’s capabilities to undertake an effective marketing campaign. From the marketing plan, specifi c strategies and detailed tactics can be designed to meet the defi ned objectives. The success of the mar- keting campaign depends on accurate and timely information gathered by the marketing data system.

Evolving World Wide Web technology offers arts marketing several promising paths to expand the audience base and to communicate directly with audi- ence members without using the traditional media.

For additional topics relating to marketing the arts, please go to www. managementandthearts.com.

Questions

1. Defi ne marketing.


2. What are some of the wants and needs satisfi ed by the following: a brand-name soft drink, a meal at a French restaurant, and a visit to an art museum?


3. Does marketing make you buy things that you do not need? Explain.


4. Give an example of an exchange process in which you recently participated that was not satisfying. What went wrong in the exchange? What would you change to make the exchange satisfying?


5. What suggestions would you offer about form, time, place, and possession utilities to a museum and a children’s theater company that are each planning new community outreach programs?


6. When you are considering the purchase of an arts product, which of the four Ps is most important to you? Explain. Do you react differently to various marketing mixes? How?


7. What are some of the different market segments you would identify for theater, dance, opera, symphony, and museum organizations? How much attendance crossover do you think exists among the different segments? For example, do opera audiences go to the theater?


8. Do demographic and psychographic profi les of audiences match your perception of arts consumers? How do you think the profi le of the audience will change over the next 20 years? How will changes in demographics affect arts organizations?


9. If you were managing a small modern dance company in a community with a well- established ballet company, what marketing strategy would you adopt to gain a market share? How would you use the Internet to facilitate your dance company’s presence?

CASE STUDY

Using the Sample Marketing Plan from this chapter select a local or regional arts organization and apply the criteria and questions in Section 1 and do an organizational profi le and audit of their marketing activities. Discuss your fi ndings with the class. Offer recommendations for improving the organiza- tion’s marketing and public relations efforts.

ADDITIONAL RESOURCES

There is no shortage of information about arts marketing. Resources include sites like www.artsmarketing.org. You can also make a quick trip to a bookstore where you will fi nd numerous titles on marketing and marketing research in general.

Listed below are some additional resources that may prove helpful in your quest to fi nd out more about arts marketing.

Joanne Scheff Bernstein, Arts Marketing Insights, San Francisco, CA: Jossey-Bass, 2007.

Albert Blankenship, George Breen, and Alan Dutica, State of the Arts Marketing Research,

Chicago IL: NTC Books, 1998.

Eugene Carr, Sign-Up for Culture — The Arts Marketer’s Guide to Building an Effective E-mail List , 2nd edition, New York: Patron Publishing, 2007.

François Colbert with the collaboration of Suzanne Bilodeau, Johanne Brunet, Jacques Natel, and J. Dennis Rich, Marketing Culture and the Arts, 3rd edition, Montreal, Canada: HEC, 2007.

Elizabeth Hill, Terry O’Sullivan, and Catherine O’Sullivan, Creative Arts Marketing , Oxford, England: Butterworth-Heinemann, 2002.

Finola Kerrigan, Peter Fraser, and Mustafa Ozbilgin, Arts Marketing, Burlington, MA: Elsevier Butterworth-Heinemann, 2004.

Neil Kotler and Philip Kotler, Museum Strategy and Marketing, San Francisco, CA: Jossey-Bass Publishers, 1998.

Phillip Kotler and Joanne Scheff Bernstein, Standing Room Only: Strategies for Marketing the Performing Arts, Cambridge, MA: Harvard Business School Press, 1007.

Bradley G. Morison and Julie Gordon Dalgleish, Waiting in the Wings, New York: American Council for the Arts, 1987.

Danny Newman. Subscribe Now! New York: Theatre Communications Group, 1977.

Surveying Your Arts Audience , NEA Research Division Manual, Washington, D.C., 1985.

Ruth Rentschler, Innovative Arts Marketing, Allen & Unwin Publishers, Sydney, Australia, 2002.

Priscilla Salant and Don A. Dillman, How to Conduct Your Own Survey, New York: John Wiley & Sons, 1994.

REFERENCES

1. Philip Kotler, Joanne Scheff, Standing Room Only (Boston: Harvard Business School Press, 1997), p. 44.


2. American Marketing Association Web site, June 2008: http://www.marketingpower. com/_layouts/Dictionary.aspx.


3. Charles D. Schewe, Marketing Principles and Strategies (New York: Random House, 1987), p. 5.


4. Ibid., p. 5.


5. Ibid., p. 7.


6. 2002 Survey of Public Participation, Tom Bradshaw, Bonnie Nichols, NEA, Washington, D.C., 2004, p. 2.


7. Ibid., p. 2.


8. James Heilbrun, Charles M. Gray, The Economics of Art and Culture, 2nd edition. (New York: Cambridge Press, 2001), p 75.


9. Schewe, Marketing Principles and Strategies, p. 7.


10. Ibid., p. 7.


11. Ibid., p. 8.


12. bid., p. 10.


13. Ibid., p. 19.


14. Ibid., pp. 14–16.


15. Kotler and Scheff, Standing Room Only , p. 33.


16. Ibid., p. 33.


17. Ibid., p. 33.


18. Ibid., p. 33.


19. Ibid., p. 34.


20. Ibid., p. 34.


21. Schewe, Marketing Principles and Strategies, p. 33.


22. Ibid., p. 36.


23. Ibid., p. 36.


24. American Marketing Association Web site, December 2007: http://www. marketingpower.com/_layouts/Dictionary.aspx?dLetter B.


25. Manhattan Theatre Club Web site, December 2007: http://www.mtc-nyc.org


26. Arnold Mitchell, The Nine American Lifestyles (N ew York: Warner Books, 1983), pp. 13–24.


27. Arnold Mitchell, The Professional Performing Arts: Attendance Patterns, Preferences and Motives (W ashington, D.C.: Association of Performing Arts Presenters, 1984), pp. ES–1 to ES–4, 21–24.


28. Michael J. Weiss, The Clustered World (New York: Little, Brown and Company, 2000), p. 79.


29. Ibid., pp. 180, 194.


30. Richard A. Peterson, Darren E. Sherkat, Judith Huggins Balfe, and Rolf Meyersohn; Erin V. Lehman, ed., Age and Arts Participation, NEA Research Division Report #34 (Santa Ana, CA: Seven Locks Press, 1996), pp. 1–5.


31. Weiss, The Clustered World, p. 39.


32. Schewe, Marketing Principles and Strategies, p. 55.