Working in Mexico: 'In the Genes'

Since starting E.J. Krause & Associates with his father in 1984, President and CEO Edward J. (Ned) Krause III has expanded his tradeshow management firm across four continents, managing more than 80 events in 16 different industries. Other show managers may complain that attendance rates have dropped as the cost of business has catapulted, but Krause views the world as his oyster. Currently pushing for joint ventures with show management firms looking to expand domestic events to Mexico, Ned Krause took time to speak with Assistant Editor Vanessa VanderZanden from his company's headquarters in Bethesda, Md.

Question: A lot of people get into the tradeshow business, but most stick closer to their homes. What drew you away from the United States and into the international markets?

Answer: I guess it's in the genes. My father was with the U.S. Dept. of Commerce, in what was then called the Bureau of Export Development. Back in those days, he ran a number of smaller U.S. tradeshows in Mexico City, and put a number of U.S. pavilions in the Paris Air Show … and I was actually born in Paris. I guess it was a little bit in my blood to be involved in international business.

Q: How then did E.J. Krause & Associates come about?

A: Obviously, with our international background we were able to work with our contacts we had developed there. We felt the U.S. market was very crowded. Our vision was to develop a truly global company with markets in key countries around the world.

Q: How and when did you first break into Mexico?

A: With EXPO COMM China, our first show, we developed a brand name. It was very successful, so we brought that around the world and were able to set up international operations. Mexico was about the third country we took EXPO COMM to, in 1991.

We opened up an E.J. Krause subsidiary that became registered as a Mexican company. As soon as we got established down there, we developed a full-service organization with a marketing department, promotional department and conferencing department to run shows.

Q: What was your biggest problem getting started in Mexico?

A: There was no appropriate venue to hold a show in Mexico City. We ran (EXPO COMM) in the Camino Real Mexico Hotel, renting out all the meeting rooms and ballrooms, and even converted the parking lot into exhibition space.

Q: What is the best advice you could give managers launching their first show in Mexico?

A: Traditionally in Latin America, the small- to medium-sized companies make marketing decisions later than in the United States or Europe. Also, Mexico has a tendency to have bigger swings economically; they've been struggling the past few years. However, to be successful in running a show there, you have to stay committed. In the early '90s, all kinds of companies left when the peso had its big crisis. We stayed and it worked out great.

Q: Is transplanting an existing U.S. tradeshow overseas a logical next step for a manager with an established show?

A: Companies have always exported products to increase their bottom line. This has been a phenomenon for investors in the United States, and the same should be true with exhibiting companies at shows, and show managers should be taking their shows to other countries to grow them. We're all investing heavily in globalization.

If you're an association, you're not going to run around the world to open up offices, but if you join us, you can enter a new market and try to grow. Also, you can try to get more visitors to come to the United States. Exhibitors can try to expand their sales and do it internationally.

Q: What is the main cultural difference people familiar with U.S. tradeshows will notice?

A: Most times a tradeshow is held from 3 in the afternoon until 9 in the evening, whereas in Washington, D.C. or Chicago it would begin at 9 or 10 a.m. You have to know that. Their lunch is in the afternoon from around 1 to 3, so most of our strong attendees come at 6 or 7 at night.

Also, the mailing system is not as good as the United States. We have more courier service. When we send out contracts to be signed, we have our own motorcycle drivers deliver them. There's more face-to-face selling of exhibitor space, where in the United States we use telemarketing.

Q: What should show managers know about holding a show in Mexico?

A: I've seen a number try to run a show from Chicago or Washington and go down to subcontract one or two things, but that's not a successful way of attacking the Mexican market. I would strongly recommend you do some management agreements with joint operations in Mexico or open an office in Mexico. Don't say, "We can save money by doing this out of Chicago." If you're going to do it, do it right.

Q: What are your plans for the future of E.J. Krause & Associates?

A: I see us continuing to grow by buying and selling shows. Normally, our modus operandi is to launch new shows, but now we're acquiring them. We acquire selectively. We have joint ventures with Reed. That's the way to grow, you can't do it all yourself.