Using Strategic Marketing to Define and Analyze Product Offering PDF

CHAPTER 8 Using Strategic Marketing to Define and Analyze the...

CHAPTER 8 Using Strategic Marketing to Define and Analyze the Product Offering The works presented on the stages of performing arts organizations are their raison d’être. Yet the product consists not only of the performances themselves; it is the complete bundle of offerings and experiences provided by the institution to the public. Consumers seek products, services, and experiences that meet their needs and desires. According to marketing strategist Theodore Levitt, People buy products... in order to solve problems. A product is, to the potential buyer, a complex cluster of value satisfactions. The generic “thing” or “essence” is not itself the product.... Customers attach value to products in proportion to the perceived ability of those products to help solve their problems. Only the buyer or user can assign value, because value can reside only in the benefits he wants or perceives.1 Copyright © 2014. Palgrave Macmillan. All rights reserved. Shakespeare may have said “The play’s the thing,” but what is truly the “thing” for the audience is the entertainment or the aesthetic, intellectual, emotional, or social experience, or some combination of these experiences. In a study of Broadway theater patrons, Olson Zaltman Associates found that for aficiona- dos, the show itself is of the greatest importance while other factors such as the hustle and bustle of Broadway, restaurants, and bars have minimal importance (or appeal). For those defined as frequent attenders (but not aficionados), these other factors rated equal in importance with the show; and among infrequents, the Broadway environment was by far the most important factor, followed by bars, clubs, restaurants, and last, the show itself.2 Dominique Bourgeon, who Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  170 Standing Room Only surveyed nearly fifteen hundred people in the regions of Caen, Dijon, and Nancy, France, also found that, in general, the play itself is the main determinant of a frequent attender’s feelings about the performance. But for occasional attenders, other intangible and atmospheric factors are more important.3 What this suggests for building frequency among occasional attenders and for building new audiences is that the total experience should appeal to the imagi- nation, to emotions, and especially to pleasurable, joyful feelings. This does not mean that theaters must always present lighthearted plays; it means that the organization will attract a broader audience if it makes the total theatergoing experience a source of emotional satisfaction. In 2012, during a discussion of the future of theater, producers and directors recognized that if Broadway (and other theater) is going to compete with the digital world, it has to give theatergoers a “bigger bang for their bucks” (more value for their money). Says Jordan Roth, the president of Jujamcyn Theaters, “Each artist will have a different reason for why this story’s being told live. Some will make it more interactive, while others will make it more of a 360- degree experience with a set extended into the lobby and dancers mingling with the audience.”4 Others expect to look for material that goes deeper, something people can take home. The desired and satisfying experience varies not only from segment to seg- ment but also from individual to individual, which complicates the marketer’s task. A first-time operagoer will respond far differently to a production of La Boheme than will someone who has seen it five times. Furthermore, each patron’s experience will vary according to his or her knowledge, preferences, background, and mental state at the time of the performance. Also, people’s interests, needs, and tastes change with repeated exposure and experience. Audiences change generation by generation. Therefore, organizations must periodically redefine what is attractive to any given segment of the population. The Total Product Concept Copyright © 2014. Palgrave Macmillan. All rights reserved. The definition of the arts organization’s product extends beyond the work pre- sented on stage to include all the organization’s offerings. One can describe a product as comprising two different levels. The Core Product The core product is that which is being offered to the target market for purchase or consumption. The core offering of a symphony orchestra may be a single piece of music to be performed (Tchaikovsky’s 1812 Overture), the program for an entire concert (a Tchaikovsky Spectacular), the collection of programs for an Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 171 entire subscription series (a Great Composer Series), or the programs and series for an entire season. It may also be considered in terms of the specific orchestra, the conductor, and the guest soloist(s). People place different values on various aspects of the core product. For example, consider a performance of the Tchaikovsky Violin Concerto by Itzhak Perlman with the Chicago Symphony Orchestra, conducted by James Conlon at the Ravinia Festival. There are several components to this product, each of which is valued differently by the audience members. Perlman’s name is a magi- cal enticement and many patrons are eager to attend his performances. Some patrons will base their attendance on the musical selections being performed, others on the orchestra’s high quality. The ambience of picnicking at Ravinia on a warm summer evening is also a draw. The core product choice is in the domain of the artistic director. Yet program- ming is only partially driven by the artistic decision-maker’s vision. Selecting programming is a complex activity, requiring that the artistic director and the managing directors work together to solve a perpetual problem: how to create a series of programs that has artistic merit; is congruent with the organization’s mission, competencies, and constraints; and serves the needs and interests of the community. Ideally, an organization’s programming is both highly artistic and highly satisfying to the audience. That being said, an art organization’s season is best designed to balance artistic exploration with the clear preferences of current and potential patrons. Entertainment, which is market centered, has customer satisfaction as its core goal. Art by definition is provocative, challenging, and often unfamiliar and disturbing. If fine arts patrons were all satisfied, artistic directors would not be living up to their responsibility to challenge and provoke. The separation of arts from entertainment in much of the media is intimidating to some people and causes them to think they won’t enjoy art and certainly won’t understand it. But, those of us who love the arts find them highly entertaining. A performance is essentially a communication between the artist or performer and the audience. This communication cannot take place if the audience does not relate to what is happening on the stage. Says Howard Shalwitz, director Copyright © 2014. Palgrave Macmillan. All rights reserved. of Woolly Mammoth Theatre Company in Washington, DC, “We’re in a state of evolution about how we think about our role in relation to our audience. We’re still working from our historical emphasis on challenging our audience, but with an increasing emphasis on trying to do plays that connect with pressing conversations happening in our community.” Woolly Mammoth staff members ask playwrights: “Who do you imagine is the audience you want to be talking to with this play?” This is what Shalwitz and his staff call “audience design.” They are looking for audience members who are going to complete the story of the play, who are going to make the conversation that the play stimulates more meaningful by their presence in the theater.5 Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  172 Standing Room Only The Augmented Product The augmented product consists of features and benefits created by the mar- keter to stimulate purchase and enhance consumption of the core product. Augmentation includes such offers as subscription packages, ticket exchange privileges, newsletters, pre- or postperformance lectures, blogs, videos, audio clips, educational programs, and special events. The augmented product includes the customer’s normal expectations regard- ing the purchase and consumption of the product. Patrons may expect to be able to choose their own seats when purchasing tickets online. Subscribers expect ticket exchange privileges. Customers may expect a well-lit parking lot, espe- cially if the theater is in an unsafe neighborhood. They expect to be treated well by box office personnel and ushers. People expect to be able to readily find comprehensive information online about the organization, each production, the people involved, and in-depth interviews and analyses of the play or music to be performed. Many organizations mail or email newsletters and program notes to their patrons in advance of performances. Other product augmentations may include discounts at nearby restaurants, box meals during the intermissions of long shows, and pre- or postperformance lectures. A few short years ago, such augmented features as blogs, video clips, and the like were rare. Now they have become expected features, along with Twitter feeds, Facebook pages, and the like. The expectations of different audience members, of course, will vary. Some patrons may expect that the acoustical quality of the hall will be high; for others, adequate leg room may be more important. Elderly and disabled patrons may not attend unless there is ease of access, no matter how attractive the evening’s performance may be. Companies tend to think in terms of related products. Customers think in terms of related activities. The augmented product often consists of features and benefits that enhance the experience of current patrons. Typically, augmented product features do not attract people to attend if the core product doesn’t inter- est them, but a lack of some of these features can serve as a barrier that keeps people away, even when the core product is highly desirable. Copyright © 2014. Palgrave Macmillan. All rights reserved. It is in the ways that the core product is packaged, priced, and promoted to the publics and the ways that information is shared, accessibility is engendered, and interest is built that is the domain of marketing. Twenty-First-Century Marketing at Piccolo Teatro di Milano Since 2001, Piccolo Teatro has effectively boosted its audience development mission by implementing a web-based marketing plan including an interac- tive website, a virtual community, online services, and multimedia archives. To meet the growing demand for more in-depth information on the Internet, Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 173 in 2009, Piccolo Teatro started a special website (www.piccoloteatro.tv). It was the first theater web.tv in Italy and included interviews, unreleased back- stage footage, and show previews with the artists seen on Piccolo’s stages. As well as being screened in Piccolo’s three theaters and in the theater’s Cloister with restaurant and lobby areas, the videos and documentaries of web.tv are linked to the Piccolo site and posted as a means of promotion and service to journalists, members of the community, and Piccolo’s Facebook fans. This product extension serves to build accessibility, promote the plays, build inter- est and enthusiasm, and to inform and educate the theater’s various publics. The Product as a Service Performing arts organizations are basically in the service business. A service is essentially intangible and does not result in the ownership of anything. Certain characteristics that are unique to services have special implications for marketers. Intangibility Services are intangible; they cannot be seen, heard, felt, tasted, or otherwise expe- rienced before they are bought. A patient having a haircut cannot see the result before the hairdresser has completed his or her task; a theatergoer cannot experi- ence the play before the performance. To reduce the uncertainty inherent in the purchase decision, the service buyer seeks signs or evidence of quality—thus, the importance of a big name, reputation, and good reviews. The service provider seeks to “manage the evidence,” to “tangibilize the intangible.”6 Whereas tangi- ble product marketers are challenged to add abstract ideas (McDonald’s “Happy Meal” links entertainment with eating), service marketers are challenged to associate physical evidence and imagery with their abstract offers (Prudential Insurance says, “Get a piece of the rock”). Copyright © 2014. Palgrave Macmillan. All rights reserved. Performing arts marketers can tangibilize their offerings in a number of ways. When promoting relatively unknown performers, marketers refer to concrete symbols of their quality such as awards or a past performance at Carnegie Hall. Such symbols function the way brand names do for physical products. When the artistic work or the artists do not have a track record, other factors should be presented that indicate the nature of the experience to expect. Special atten- tion must be paid to “atmospherics.”7 The visual quality of the brochures and the character of the facilities can affect the customers’ expectations. A no-frills auditorium sets the stage for the young, adventuresome theater company as well as a marble lobby does for the opera company. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  174 Standing Room Only People are also important conveyors of a performing arts organization’s posi- tioning. Publicity photos of formally dressed chamber musicians create different expectations than do photos of musicians in brightly colored silk shirts. Even the audience provides a tangible signal about the appeal of the performance. By showing which people go (e.g., demographic characteristics), how they dress, and the serious or animated expressions on their faces, marketers can convey an image of the theatergoing experience. Perishability Among an arts marketer’s greatest challenges is the fact that services are per- ishable; they cannot be stored or preserved. A car or appliance can be kept in inventory until it is sold, but the revenue potential of an unoccupied theater seat is lost each time the curtain rises. As interest in a theatrical production builds over time, the empty seats from earlier performances cannot be filled. And an organization presenting a once-only concert has no opportunity to benefit from the interest generated afterward. Perishability is less of an issue when demand is steady, as is the case for heavily subscribed organizations. But when demand fluctuates widely, perishability is a serious problem. This is why arts organiza- tions seek advance publicity for their performances, offer discount pricing for previews, and promote subscriptions. Inseparability Unlike physical goods that are manufactured and put into inventory, services are typically produced and consumed at the same time. A service is inseparable from the source that provides it. Consider the emotional impact on an audi- ence expecting to hear Renee Fleming perform if an announcer tells them that Ms. Fleming is indisposed and that someone else will substitute. This concept applies to the organization’s customer service as well. An other- wise enjoyable evening can be sabotaged by unresponsive or unhelpful personnel. Some factors that affect a patron’s satisfaction with the experience are beyond Copyright © 2014. Palgrave Macmillan. All rights reserved. the organization’s control, such as a flat tire on the way to the performance or an emergency at home in the middle of the evening. But there are external fac- tors to which the organization can respond. When a bad snowstorm or a major traffic jam affects many patrons, the curtain can be delayed a few minutes or patrons can be seated late, against custom. Such efforts go beyond a customer’s expectations and may actually serve to add to the satisfaction and enjoyment the patron would have experienced had the inconvenience not occurred at all. The effect may be somewhat offset, of course, by the dissatisfaction felt by those who arrived on time. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 175 Variability Since a service is so closely linked to its source, its quality can vary depending on who is providing it and when it is being provided. A performance of the Dvorak cello concerto by Yo Yo Ma is likely to be of higher quality and more exciting to watch than the same concerto played by a young musician. And the quality of the audience’s experience with Ma performing can vary depending on factors such as the temperature in the hall or the quality of the orchestra and conductor with whom he is performing. Purchasers of services are aware of this high variability, and the more unknowns there are about a service provider (per- former, playwright, composer, director, presenting organization), the more those purchasers will engage in risk-reducing behavior to learn whether the offering is worthwhile. Service providers can manage variability within the organization. Consistency can be attained with good personnel selection and training and by routiniz- ing as many parts of the service as possible. Also, organizations should develop adequate customer satisfaction monitoring systems, using suggestion and com- plaint systems, customer surveys, and comparison shopping with other arts organizations. Customer Involvement and Expectations The nature of the customer’s involvement is an integral aspect of the service exchange. A performance of the Brahms Violin Concerto will be “consumed” differently by the various audience members according to their knowledge, preferences, backgrounds, and mental states at the time of the performance. To help increase the likelihood of a highly positive experience and to mini- mize consumer disappointment, art marketers can help patrons to be better informed art consumers with preconcert lectures, postperformance discussions, informative newsletters, in addition to many other online and in-person edu- cational opportunities. Performing arts organizations should make their purpose and positioning Copyright © 2014. Palgrave Macmillan. All rights reserved. clear to their target audience. When patrons are repeatedly unmoved by perfor- mances, they may either think that they are missing something or that they just do not enjoy the art form. A major source of dissatisfaction on the part of many service customers is not inferior service, but exaggerated expectations. A theater- goer should know in advance if a play will be depressing or contain violence. A bittersweet play with a few comic moments should not be billed as “hilarious.” The essence of services marketing is fine service. Whether the product is a performance by a pianist, the advertisers, or the box office personnel, nothing is more important than the quality of that performance.8 Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  176 Standing Room Only Determining the Product Offering Selecting programming is a complex activity. It requires that the artistic director and the managing directors work together to solve their perennial riddle: how to create a series of programs that have artistic merit; are congruent with the organization’s mission, competencies, and constraints; and serve the needs and interests of the community. There is a distinction and delicate balance that must be maintained between art for art’s sake, art for society, and art for the survival of the organization. Although the artistic product derives from a unique vision, creativity does not occur in a social vacuum. All artists are sensitive and responsive to the worlds in which they live. Shakespeare created Nick Bottom and other colorful characters after the “common folk” he observed at the Globe Theater. Haydn composed a forte portion in his “Surprise Symphony” at the point where he knew his patrons were likely to fall asleep. Playwrights through the ages have expressed strong political and social messages in their writings. Consider Arthur Miller’s Crucible; David Mamet’s Race; Bruce Norris’s Clybourne Park; and Matt Stone, Trey Parker, and Robert Lopez’s Book of Mormon. Thematic Programming Thematic programming is most commonly used for concerts, since a variety of music is played at each performance, but the concept is also used by theaters in programming their entire season. One common orchestral approach is the musical theme: “Romantic Music,” “ The First and Last Works of Beethoven and Bartók,” “Sounds from Norway,” “From Classical to Jazz.” Often these programs are unique and include rarely heard musical selections. However, this approach is typically a timid, product- centered effort to attract new listeners into the concert hall that does little to enhance the audiences’ experience or to create new levels of understanding or appreciation. Consider instead how the American Symphony Orchestra (ASO) in New Copyright © 2014. Palgrave Macmillan. All rights reserved. York City takes a customer-centered approach to thematic programming to offer an accessible, meaningful, and enriching experience for its audience. Thematic Programming at the American Symphony Orchestra According to music director Leon Botstein, the ASO has a mission of taking bold steps “to reimagine the tradition of orchestral music and concerts within the larger culture—to link music to the visual arts, literary life, and politics as well as popular culture.” One performance entitled “New York Avant Garde” tied together music and visual arts from the early twentieth century, a period Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 177 studied and enjoyed by many arts lovers and history buffs. Says the ASO’s website, for example, “From Strauss to Antheil to Copland, ASO presents a glimpse of New York’s modernist musical culture in the years surrounding the 1913 Armory Show, in partnership with New York Historical Society’s retrospective on the historic exhibit.” The programs are often linked to cur- rent New York art exhibitions and cultural events and the preconcert and mid-concert talks open every possible avenue for education within the per- formance. According to New York Times critic Ed Rothstein, Leon Botstein has become “the dominant figure in the most important contemporary trend in concert programming during the last 50 years.”9 Programming for the Community Some organizations find they can be most effective when programming spe- cifically for the community of which they are a part. Specific recognition of the arts organization’s interest in the community can develop not only a larger audience but one that is proud to have an orchestra or theater that cares. If the area has a dominant ethnic background, the orchestra can plan an appropriate concert or festival. If an important historical event has shaped local history, the orchestra can schedule a concert of music from the period, perhaps including a neglected American work of the time. If a corporation, hotel, or other business is promoting a major anniversary, it can show its appreciation for the com- munity by commissioning a work for the local orchestra. Consider how the Helsinki Philharmonic Orchestra’s Godchild Project reaches the very youngest members of the community. Helsinki Philharmonic Orchestra’s Godchild Project Said the Helsinki Philharmonic Orchestra’s website: “[Our] first godchild Copyright © 2014. Palgrave Macmillan. All rights reserved. project (2000–2007) was a great success and aroused widespread interest both in Finland and abroad. In 2012, as the orchestra celebrates its 130th anniversary, the project is to have a sequel. The orchestra is accordingly invit- ing all Helsinki babies born in 2012 to be its godchildren.” For this program, godfamilies receive annual invitations to concerts geared to the child’s age at the time. In the first year, little concerts are held in dif- ferent parts of Helsinki; later, they are given in the Helsinki Philharmonic Orchestra’s home hall at the Helsinki Music Centre. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  178 Standing Room Only The presenter at these concerts is Satu Sopanen, an expert on children’s music who, in 2011, was awarded the State Prize for Merits in Children’s Culture. Also contributing to the concerts are students at the Sibelius Academy, experts on early music education, theater directors, composers, and conductors. Families who register for the godchild project receive the orchestra’s CD called “Nallekarhu konsertissa/Teddy goes to a concert.” The items on this disc are classics from the fairytale world, featuring butterflies, bumble bees, princesses, and goblins. During its first project (2000–2007) the Helsinki Philharmonic produced 15 concerts, each different, in more than 80 per- formances under the baton of eminent conductors. These were attended by 4,500 godfamilies, and the feedback was extremely positive. “We’re extremely proud of our musical godparents for ‘opening up’ the world of orchestral music for our children. Many thanks!” Approaches to Presentation Since the early 1990s, orchestras and other performing arts organizations have been urged by their trade associations and other experts in their fields to rethink not only their programming, but also their approaches to program pre- sentation. Harvey Lichtenstein, former long-standing president and executive producer of the Brooklyn Academy of Music, has been a leader in question- ing every aspect of the concert experience. Says Lichtenstein, “The orchestra, more than most cultural instruments, needs a radical approach, because it’s stuck in the past, and it has more of a problem gathering a young audience. And let’s face it: the orchestra, visually, is fairly dull. You’ve got to keep ques- tioning all the old traditions. Some of them may be valid. But lots of them just make no sense.”10 Arts organizations are taking up the challenge of making performances more inviting, exciting, relevant, and accessible by varying the performance rituals and environment. Copyright © 2014. Palgrave Macmillan. All rights reserved. The Performance Ritual Arts organizations have traditionally followed a ritualistic pattern of performance presentation. The symphony concert, in particular, is generally characterized by a short opening work, a concerto with soloist, an intermission, and then a lon- ger symphonic piece, all performed by up to one hundred musicians identically dressed in formal attire. There are many ways this ritual can be altered to enliven the experience, including concert-related activities during intermission, small ensemble and solo performances during the orchestra concert, shorter concerts Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 179 and concerts with different starting times to accommodate people with differ- ent schedules, more variety in the kinds of works presented, and unscheduled encores in the middle of the program. Harvey Lichtenstein envisioned concerts with dance, theatrical events, and opera. The use of color can add excitement and interest to a normally staid and formal art form. At one concert, when the women players arrived wearing brightly colored long gowns, the atmosphere immediately became more festive. The Performance Environment Ambience is a critical factor in the audience’s performing arts experience. Creating an ambience that enriches the programming is a unique challenge for each organization—unique because it is dependent on the nature of each orga- nization’s product offering; its physical, financial, and human resources; and its audience’s preferences, interests, and needs. Lingering at New York’s Lincoln Center or London’s Barbican Centre makes the whole concert-going experience more pleasant. Patrons can browse through music-related books and record- ings. Meals provided before a performance or during intermission accommodate those who do not have time to eat before the show. Postconcert wine or des- sert bars in the lobby, or even on the stage, stimulate socializing and discussion about the performance. Postconcert events also answer such questions as these: where should we go after the concert, where can we meet some new people, and how can we learn more about the performance/performers/composers?” A public “green room” allows audience members to meet the musicians, dancers, or actors after the concert and provides an opportunity for managers to hear audience comments and answer questions. Using Multimedia Arts organizations often capitalize on modern technology to enhance the audi- ence’s experience both within and outside the performance hall. In large halls, some organizations utilize onstage cameras to relay video images of the conduc- tor and performers to a projection screen at the rear or sides of the stage. A visual Copyright © 2014. Palgrave Macmillan. All rights reserved. component may be added by using film projected on scrims or screens, most often with live musical accompaniment, as was done when composer Philip Glass created instrumental and vocal music for filmmaker Jean Cocteau’s Beauty and the Beast. Orchestra purists worry that this approach will distract from the music, but when done well, such enhancements add to everyone’s experience, while attracting a younger crowd. Outside the performance hall, arts organizations can use modern technology to increase exposure, familiarity, and comfort levels with the arts. Some organi- zations such as Lincoln Center in New York and Millennium Park in Chicago project select performances on large screens outside their halls. Video and audio Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  180 Standing Room Only clips of the performance—with commentary—can be posted on the website and YouTube to help audience members become better “tuned in” to what they are about to hear and see. Community access cable television, public television, and radio can provide forums for orchestras and theaters to introduce repertoire to potential audiences. More and more, arts organizations are capitalizing on the power and accessibility of the Internet, social media, and dedicated applications (apps) to communicate with audiences and to provide opportunities for interac- tive exposure and learning. The Event As the well-known Stratford, Ontario, Shakespeare Festival and the Bayreuth Festival demonstrate, an event may provide the basis for an organization’s total programming. Some organizations offer festivals to enhance and extend their regular, ongoing programming, such as the NY Phil Biennial, initiated in 2014. Jazz presenters in Montreal capitalized on the event concept to create their own successful festival. The Montreal Jazz Festival In the late 1970s, people would not come out for a jazz concert and Montreal jazz clubs were folding. When legendary bassist Charles Mingus came to town, only six hundred seats were sold, and the concert’s producers lost money. Yet, in 1980, the same producers presented Montreal’s first jazz fes- tival, launched as a weekend event with a budget of $250,000. It attracted 12,000 Montrealers. By the next year, 22,000 listeners appeared; by 1990 the festival had hit the one million attendance mark for a staggering sched- ule of three hundred concerts. “That’s the difference a festival can make. It makes people pay attention,” said Alain Simard, president and cofounder of the event. The festival offers a two-week combination of free outdoor per- formances, ticketed indoor concerts, special film screenings and premieres, themed concert series, cabaret performances, and more. Performances are Copyright © 2014. Palgrave Macmillan. All rights reserved. staged inside and outside the city’s spectacular Place des Arts complex and in nearby auditoriums as well.11 By 2012, the Montreal Jazz Festival had become the largest such festival in the world, attracting world-renowned performers and a wide variety of performing groups to 14 concert halls around the city. Music starts at noon and runs until midnight, but there are after-hours jam sessions that go until 3:00 or 4:00 a.m. The festival attracts more than two million visitors, about two hundred and fifty thousand of whom are tourists. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 181 NY Phil Biennial In 2013, the New York Philharmonic announced the creation of the NY Phil Biennial, a ten-day festival (every two years, as the name implies) that Philharmonic officials describe as a “veritable playground of new and recent music from around the world.” Says music director Alan Gilbert, “For a con- tained period of time, audience members can get a glimpse of what we feel has been exciting in the recent past.” The orchestra chose the word “biennial,” said Gilbert, “to imply that the festival was permanent and to convey the feel of a broad international survey. We want to provide for music a nexus and rallying point that the great biennials in the arts world have become.” The project extends efforts by the orchestra, which has sought in recent years to fend off critical perceptions that it is stodgy, to program more contemporary music and make an initiative in the search for more relevance and newer audiences.12 The Organization’s Perspective on Programming Each organization must take many concerns into account when determining its programs. Even if a particular program meets artistic-related criteria, other issues add to the complexity of the programming decision. For an artistic director, the process boils down to balancing personal vision, audience impact, and costs, among other factors. The Organization’s Mission and Opportunities When evaluating current or potential product offerings, managers will want to ascertain that they are working to realize the organization’s mission and are taking advantage of its best opportunities. To do so, managers may wish to use Copyright © 2014. Palgrave Macmillan. All rights reserved. the criteria of centrality, quality, and market viability. Centrality is the degree to which a program or activity is central to the organization’s mission. The qual- ity of the program or activity should be evaluated relative to the organization’s own standards and those of its competitors. Market viability is the degree to which the market for the program or activity is sufficient in size and growth potential. These issues may not all carry equal weight for a performing arts organi- zation. For example, an orchestra with a strong mission to educate its public may choose to program more contemporary and unfamiliar music despite the resistance of a large segment of its audience (high centrality, low anticipated Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  182 Standing Room Only market viability). On the other hand, consider a symphony orchestra that pres- ents orchestral, chamber, and solo recital series of classical music. The director is considering adding a jazz series to its programming because there is sizable demand; it is likely to increase revenues, may stimulate some interest in classical programming, and is not in conflict with the orchestra’s mission (high quality, high market viability, neutral centrality). Cost Considerations Many organizations not only have to manage within the financial constraints of the current season, but carry deficits from previous seasons as well. Ardis Krainik, former, long-standing general director of the Lyric Opera of Chicago, attributed her organization’s firm foundation to rigorous financial vigilance. Ms. Krainik always determined her season within the constraints of a balanced budget, which frequently meant “dusting off ” an old production rather than creating a new one. After suffering severe financial problems for many years and with little pros- pect for increasing contributed income, managers at the Vancouver Symphony Orchestra (VSO) concentrated on improving the returns on performances. To do so, they examined the economies of previous program offerings and estimated the costs of future programming options. A procedure called mar- ginal contribution analysis was used to assist in the process. The steps in the procedure are: 1. Calculate revenue from ticket sales, fees, concessions, sponsorships, and restricted grants. 2. Less (subtract) variable costs (promotion, guest artists fees, production expense, materials). 3. Add to fixed overhead (musician and staff salaries, building costs, market- ing expenses, etc.). 4. Divide by the number of orchestra services consumed by the activity (a rehearsal or a performance is one service). Copyright © 2014. Palgrave Macmillan. All rights reserved. 5. Equals per-service contribution to overhead. Managers should use the results from those calculations in the following way: If the result is a negative number, the activity should be discontinued (unless it has extraordinary redeeming artistic or community value); the overall financial result would be improved by not doing it. If the number is positive but low com- pared to other activities, and a superior alternative use exists, the services used by the activity should be reallocated to the alternative. Techniques such as marginal contribution analysis help managers keep their organization on track financially while making programming decisions. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 183 Managing Product Life Cycle Stages Over time, managers need to periodically adjust or reformulate their marketing and positioning strategies. There are ongoing changes in the environment, such as evolving audience preferences, growing competition, social media, and other high-tech advances. The organization may undergo a major internal change such as a move to a new venue or the arrival of a new artistic director. The organiza- tion is also subject to change according to its life cycle stage—from introduction to growth and maturity, and, one hopes, to staving off decline. The organization itself, its core products, and its augmented products are all subject to life cycle analysis. Introduction Stage In the introduction stage the primary challenge is to build awareness of the orga- nization and its product offerings. New organizations will rely heavily on public relations and other low-cost promotional approaches. Growth Stage During the growth stage the organization capitalizes on the audience’s strong response and seeks to develop patron loyalty. It may add new product features and benefits such as visible improvement in the performance hall, higher-quality production values, and a greater focus on customer service. Investing more heav- ily in production values may help to garner awards, which helps an organization earn the label “best” in some category. The organization may add new products such as matinee concerts or plays performed on a smaller, second stage to attract different audiences. It may consider new distribution channels, such as perfor- mances in neighborhood churches or on local cable channels, collaborations with area businesses, or tours. Copyright © 2014. Palgrave Macmillan. All rights reserved. Maturity Stage When the growth rate slows, often to the point where managers are working harder just to maintain past years’ audience levels, the organization has entered the stage of maturity. It can try to expand its number of users by converting non- users, by encouraging more frequent use among current users, and by increasing the amount of use per occasion—for example, by encouraging patrons to bring friends or family members. The organization can also stimulate demand by modifying the product. This can take the form of quality improvement, usually by investing more heavily in production values; or feature improvement, such as adding multimedia technology to a performance. The marketing director should Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  184 Standing Room Only also consider what modifications could be made to each nonproduct element of the marketing mix to stimulate demand. The organization must determine which tools would be most effective for meeting its needs. Each organization faces trade-offs and must weigh the rela- tive benefits and costs of each opportunity. A SWOT analysis, as described in chapter 5, would be very useful in helping to make this analysis. Piccolo Teatro: Capitalizing on New Technology to Build the Audience Piccolo Teatro of Milan was founded in 1947 as the first public theater in Italy. From the 1940s to the 1980s, Piccolo grew steadily, to a point where it was offering more than 30 shows each season and had more than 10,000 ticket holders. The subsequent changes in the social, political, and economic scenarios led to a more fragmented public in the world of culture and theater in Italy. Within the context of these changes, the development of new tech- nologies and the advent of the Internet represented a crucial step in Piccolo’s marketing strategy. In particular, in response to the economic crisis and to take advantage of technological innovation, Piccolo chose to focus on (1) cre- ating an offer specifically targeted to the public through increasingly flexible season ticket options, (2) developing new educational activities for the public in general and for students in particular, (3) introducing a customer relation- ship management (CRM) system fed by continuing off- and online surveys held among its audiences, and (4) developing its web system. In 2012, Piccolo performed more than 60 shows in its three theaters (Teatro Strehler: 980 seats; Teatro Grassi: 500 seats; and Teatro Studio: 370 seats), staging classical and contemporary drama, dance, music, opera, and special performances for the young. In the 2012–2013 season, Piccolo sold 288,000 tickets, of which approximately 100,000 came from the sale of more than 22,000 season tickets, the highest number in the theater’s history. Of these tickets, about half come from groups and students—preschoolers to Copyright © 2014. Palgrave Macmillan. All rights reserved. postgraduates. A wide range of educational activities is arranged every season, includ- ing various training programs for students and their teachers. During the workshops the shows being staged at Piccolo are used to illustrate the differ- ent theater disciplines and to bring the theater experience to students of all ages. The completeness of these in-depth study projects is one of the reasons why 45 percent of the theater’s public is made up of people under age 26. Approximately 50 percent of patrons come from outside Milan. In 2001, Piccolo opened its Community, an email list of contacts who receive a monthly newsletter with information and special offers for Piccolo performances. The “Community del Piccolo” has been a huge web success, Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  Defining and Analyzing the Product 185 generating growing sales from more than one hundred and twenty thousand registered members in just over ten years. The possibility of contacting people by email and the constant evolution of the Internet led to the creation of new services for registered members of the Community, such as digital tickets with a print @ home barcode, which eliminates the need to collect tickets from the box office; the create your own “virtual agenda” with automatically generated messages that remind you when to go to the theater; and the opportunity to receive an email with a brief satisfaction questionnaire the same evening as the show, which enables Piccolo to “listen” and to profile its audience more effectively. Given the success of online sales through the Community offers, in 2008 it was decided to create a real online sales channel connected to the database of Piccolo’s Customer CRM system. The sales site was named after “PiccoloCard,” the loyalty card that is issued free to all buyers and that allows them to accumulate points to use on future tickets and get discounts and special services in the cafeterias or library of the Piccolo Teatro. By July 2012, Piccolo had more than 50,000 PiccoloCard holders, all of whom were added to Piccolo’s CRM database system. The sales site, together with the Community channel, grew to generate sales of 50,000 tickets per year. Moving the sale of 4,000 tickets away from the Community toward inde- pendent sales through the PiccoloCard site brought about an increase in rev- enue as people were now buying full price tickets, as opposed to the discounts generally available through the Community site. From 2008, when the PiccoloCard site was begun, to 2011, the average price of tickets rose from 15.40 euros to 19.1 euros, an increase of 24 percent. During that period, total online sales rose 47.4 percent. The success of sales through the PiccoloCard site still generated an increase in members registered on the Community site however, as purchasers are required to register, for free. In the 2012–2013 season, the PiccoloCard site was integrated inside the main website www.piccoteatro.org. With this change, the customer remains in Copyright © 2014. Palgrave Macmillan. All rights reserved. the Piccolo website and can more easily find and purchase tickets, choosing his or her preferred seats in an interactive seat map. This simplification of the pur- chasing process increased web ticket sales by 20 percent in just one season. Other features of Piccolo Teatro’s initiatives to stay relevant in a chang- ing economy, society, and technological environment will be discussed in the chapters on branding and high technology. Piccolo Teatro is a mature organization that has thrived, grown dramati- cally, and served ever more diverse audiences by perpetually staying in touch with people’s preferences and needs and by capitalizing on the technology that has made much of this growth possible. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.  186 Standing Room Only Decline Stage At some point many products outlive their value to consumers. If a product or organization has not sustained itself or been rejuvenated through the maturity stage, its sales will eventually decline. There is a great deal of concern that as more orchestras than ever are facing shrinking audiences, musician strikes, huge deficits, and bankruptcy, the whole field is at risk. As a result, many orchestra managers are reevaluating their organizations’ roles in society, their programs, and their modes of presentation. The most striking example of augmented product decline, pervasive in the performing arts industry as a whole, is the erosion in recent years of the full- season subscription. Some organizations have been able not only to maintain but also build their full-season subscriptions with their high-quality offerings and attractive benefits. But for most of the industry, alternative packages such as mini-plans and an emphasis on single ticket sales online have served to maintain or build audience size in the face of declining subscriptions. Creative arts man- agers and marketers who think broadly enough to imagine what changes will attract new attenders and build frequency among current attenders are likely to avoid decline. Adaptation must come from within the organization. A state of decline does not necessarily portend a death knell for an arts organi- zation. Those who think broadly enough to imagine how artistic integrity can be maintained within the context of sweeping changes are the most likely to avoid decline. For the rest, the future is at risk. Copyright © 2014. Palgrave Macmillan. All rights reserved. Bernstein, J. (2014). Standing room only : Marketing insights for engaging performing arts audiences. Palgrave Macmillan. Created from cofc on 2025-01-13 20:11:14.