Competitive structure and growth potential of event management service industry in Bangladesh: An empirical study

Abstract

This current era of the world is experiencing rapid globalization accelerated by modern means of communication and transportation. This is also giving the image that the world is unified globally.This changed context is nurturing fierce competition among the companies in any industry. Survival in such a competitive situation has become so difficult that managers are trying to adopt various marketing actions like new product introductions and promotional incentives to cope with the bitter fight of existence. Here it is to be specially noted that approaches of marketing communication are also changing to face the speedily evolving market environment. Promoting a product or brand using conventional approaches starting from advertising up to sales promotion are no more as effective as before. There are various reasons: the number of brands has increased; competitors use promotions frequently; many brands are seen as similar; consumers are more price-oriented; the trade has demanded more deals from manufacturers; and advertising efficiency has declined because of rising costs, media clutter, and legal restraints. In this situation, organizations are considering other alternatives to promote their products. Now-a-days, organizing various events to promote products has become very popular. A successful corporate event of an organization leaves a memorable experience for the guests, it helps to increase the company’s goodwill and brand value. Therefore, it is very common to see corporations investing their money to hold annual events to help boost up their brands. Initially renowned advertising firms of Bangladesh like Asiatic, Interspeed, Mediacom Limited started giving support to the giant national and multinational companies as and when needed. Now-a-days event management firms are also helping to arrange family circle events like ‘GayeeHalud’. Event management has emerged as a new and very potential service industry of Bangladesh. By taking this opportunity, some novices are entering into business, sometimes getting some tasks, and ending with a disorganized event. This is very much harmful for the reputation of a newborn industry. Situation demands setting some guidelines. Not some arbitrary guidelines, some guidelines based on research. However no visible research is going on. This is the reason that initiative has been taken to carry out an in-depth research on this sector.In this context, the research has been aimed at investigating the competitive structure and growth potential of this industry so that necessary policy recommendations could be proposed. It is an established fact that in order for a business to choose its desired competitive position, it must start with an analysis of the attractiveness or profitability of the industry to which it belongs. By far, the most widely used model to gain insights into the competitiveness of an industry is the Five-Forces Model introduced by renowned professor of Harvard Business School, Michael Porter.This model forever changed howacademics, consultants, and managers would viewcompetitive environments. The same model was used to analyze the attractiveness of event management service industry of Bangladesh. However, an extension of the model is attempted by introducing a new construct, Growth Potential of the Industry. Ultimately, it is also checked whether attractiveness leads to growth potential of the industry. For this purpose, a questionnaire containing forty five statements, besides those of demographic and general information of the companies, is provided to the employees working in different event management companies. In order to ensure the reliability of the measurement scales of the underlying constructs as well as the clarity and readability of the statements, a pilot study is performed on 58 respondents. In the final survey, 300 questionnaires were returned out of 400 questionnaires which indicates that the response rate was 75%. Some responses were omitted for having excessive missing values and outliers. Finally this has resulted into a final sample size of 231 and thus the adjusted response rate became 57.75%.In an attempt to apply mixed method approach, depth interview of three industry gurus were also taken. They have shared their experiences and insightful opinions helpful for formulation of policies. The findings of the study reveal that out of eleven primary research hypotheses five are validated. The other six hypotheses are not validated by the model. Thus, it is suggested that, threat of substitute products and bargaining power of the suppliers have positive impacts on attractiveness of Event Management Service Industry of Bangladesh. The model also suggests that bargaining power of the customers and bargaining power of the suppliers have positive impacts on growth potential of Event Management Service Industry of Bangladesh. Finally this study also reveals that attractiveness of Event Management Service Industry of Bangladesh has a positive impact on its growth potential. Depending on the personal interviews with industry leaders and quantitative research findings, some suggestions were given. The study was concluded with a few limitations and suggestions for future research.