Marketing communications of the security market in figures. Part 1.
The specificity of the market of technical security equipment is that it is a market
of high-tech goods and systems with a high level of involvement in decision-making.
The complexity of security systems means that the purchasing process requires the participation of qualified specialists on both sides. Security systems are usually purchased on the basis of individual solutions, requiring a high level of «fine tuning». In most cases, the systems must be integrated into larger systems. These factors have a huge impact on the process of organizing the sale of technical equipment and security systems, on marketing and, as a result, on communications.
The publications will present data characterizing the current development of existing communication channels, allowing us to identify trends and patterns, as well as build or adjust a promotion strategy. In this article, we will assess the volume of investments in marketing communications carried out by TSB market participants, as well as the place and role of special events in the market.
Advertising market volume
It is not difficult to notice that the economic downturn has seriously affected the media market of the industry: some active market participants have chosen to wait it out or redirect the funds allocated for marketing to other categories, some companies have switched to short-term planning, others are less active than usual or do not consider it reasonable to save on communications with the consumer. Let us consider how investments in marketing communications were distributed in 2008.
So, in 2008, 227 active participants in the technical security equipment market invested about .5 million in promoting products/brands, “the average temperature in the hospital” – companies on average spend less than 1% of their turnover (according to experts, the volume of the technical security equipment market in 2008 was .6 billion).
Diagram 1. Distribution of investments between communication tools
The main investments in promotion are participation in special events (43.7%) and advertising in specialized printed publications (37.9%). About 16% of investments were invested in advertising in catalogs and reference books published annually. The smallest amount of investments was invested in Internet communications — about 2.5%. In this study, Internet advertising should be understood as any means of influencing the audience of specialized industry Internet portals in the technical security equipment segment.
Diagram 2. Distribution of advertising investments among TSB market participants
At the same time, about 44% of investments in advertising are made by trading houses (a trading house should be considered any organization engaged in intermediary services for the sale of both domestic and foreign production). 31% of investments in advertising are made by Russian manufacturers of technical security equipment, 25% are invested by Russian representative offices of foreign brands.
Diagram 3. Distribution of investments in advertising among participants in the TSB market
It is interesting that the share of manufacturers of video surveillance equipment and systems (both domestic and foreign) accounts for about 60% of investments in advertising from the total share of manufacturers (diagram 3). At the same time, 33% falls to manufacturers of digital video surveillance systems, 16% are invested in promotion by manufacturers of video surveillance cameras. Manufacturers of fire alarm equipment and systems invest 26%, and 25% in total falls to manufacturers of access control, restriction and management systems and integrated security systems.
Special events
43.7% of promotion funds are invested by market participants in special events. Special events should be understood as any personal communications of the face to face type, when communications between the manufacturer/seller and the buyer are carried out in real time and are limited only by the presence of mutual interest and the time that one or the other party is ready to spend on communication. Special events in the market of technical security equipment include specialized exhibitions, conferences (including dealer ones), presentations and seminars. This study examines 3 specialized events: the XIII International Forum «Security Technologies — 2008», Moscow, the XIV Moscow International Exhibition «Security, Safety and Fire Protection MIPS — 2008», Moscow, and the XVII International Exhibition «Security and Safety — Sfitex 2008», St. Petersburg.
In this paper, participation in an exhibition means only the costs of renting an exhibition space and a registration fee. According to research1, this averages 25% of the costs. The study does not include costs of building and equipping a stand, organizational, representation, personnel, advertising and PR expenses, since these expense items are individual for each enterprise. In addition, investments in sponsorship of events were not taken into account.
1The structure of costs for participation in an exhibition is given in the practical guide “Participation in Exhibitions. Formula for Success” edited by PhD in Economics I.K. Filonenko, Pronext, 2006, p. 53.
Three exhibition events are presented in Russia, similar in terms of exhibition areas, number of participants and number of visitors. The main dilemma is that there is an extremely short period of time between the Moscow exhibitions and security market participants prefer to present their new products at one of the forums. The circle of exhibitors at the St. Petersburg forum is more established.
At the same time, the Moscow forums account for about 76% of investments: 40.6% for «Security Technologies» and 35.4% for MIPS. Of course, holding two exhibitions, similar in area and specialization, with an interval of two months, is a feature of the Russian security market and a priority of these events in the marketing communications complex of industry enterprises. But this also means that the competition of exhibition operators will intensify every year, the organizers will progress and offer new forms of cooperation, and, possibly, specialization of exhibition operators in a specific market segment.
Diagram 4
According to statistics, about 500 companies from 22 countries took part in the Security Technologies 2008 forum, approximately 350 companies from 23 countries took part in MIPS 2008, and more than 300 exhibitors from 11 countries took part in Sfitex 2008. In this regard, with regard to the Russian segment of technical means and security systems, 121 companies took part in the forum «Security Technologies — 2008», 116 companies took part in the exhibition held two months later — MIPS 2008, and 198 companies — representatives of the segment of technical means and security systems — took part in the St. Petersburg forum Sfitex, held in October 2008.
Diagram 5. Average size of an exhibition stand (segment of the market of technical means and security systems)
In addition to the traditional criteria for selecting an exhibition event for participation (information is traditionally provided by the organizers), this article presents additional criteria that allow you to adjust your promotion strategy within the exhibition. Such criteria are the average booth size (m2) for each event, as well as booth location options. With regard to the segment of technical means and security systems, the average booth size at the Security Technologies 2008 forum was 34 m2, and at MIPS 2008 it was 37 m2. The average size of an exhibition booth at the Sfitex Forum in St. Petersburg was 21 m2. At the same time, at Sfitex (diagram 6), booths with a linear arrangement prevailed (105 booths out of 198), while the number of booths with a linear arrangement at the Security Technologies and MIPS forums was 31 and 35, respectively. The number of corner booths at Sfitex is 57, at the Security Technologies and MIPS forums – 49 and 41 respectively. The number of booths open on three sides (“Peninsula”) is approximately the same at all international security forums and amounts to 32–34 booths. The number of stands open to visitors from four sides («Island») is 4 at Sfitex, 7 and 8 at the Security Technologies and MIPS forums, respectively.
Diagram 6. Types of stands depending on how they are located in relation to neighboring stands and passages
The study did not take into account the costs of holding presentations and seminars, training courses, conferences and business forums such as All Over IP.
This article opens a series of publications devoted to marketing communications in the market of security products and systems. In the next issue we will look at how investments were distributed in the specialized press, what type and size of advertising is most popular in a particular magazine, how much advertising does each issue of the magazine contain, and we will also touch on the issues of advertising on industry Internet portals.
Questions, comments and suggestions can be sent to the author by e-mail: vladimir@narozhny