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Building Foundations With Price Promotions: Oregon State Fair Gets Up New Management for 150th Anniversary

11/12/2014

By Timothy Herrick

Photo courtesy of

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Attendance and revenue were up for the 2014 Oregon State Fair, which ran August 22 - September 1. The 11-day fair showed gains over 2013 and implemented well-received new promotions, including a reduction in the admission price, all day/every day wristbands and turnings its headliner concert series into free shows. 

But these gains were more important to the fair for next year rather than this year.

The 2014 Oregon State Fair was a transitional fair, and successfully set the stage for a new organizational structure. 

"We wanted this year's fair to be a  launching place for next year, which is 150th anniversary of the Oregon State Fair," said MG Devereaux, Deputy Director, Oregon State Fair Council. "In January when our new fiscal year begins, thPhoto By e handover takes place.  This year was a co-production and we feel we are in a very strong place."
 
New Management Structure
The 2014 was the last Oregon State Fair to be managed by the Parks and Recreation Department, a state agency in charge of the fair since 2005. In 2013, new legislation transferred control of the Oregon State Fairgrounds and Exposition Center from a state agency to a newly formed public corporation. The legislation created the 11-member Oregon State Fair Council, charged with supervising the formation of the public/private hybrid that will manage the fair and its 185-acre site - home to the Oregon State Fair since 1862. 

"We did no harm," joked Don Hillman, Interim Fair Manager, Oregon State Fair. "We wanted to attract crowds back to the fair and positioned them for 2015. Our job was to set them up for that fair." 

According to Hillman, attendance was 226,000, up by about 10 percent over 2013. "These were ticketed people, so we know that they were unique visitors, who bought a ticket either at the gate or in advance sales or part of another promotion." 

While the numbers are still being finalized, Hillman said, that the fair showed a palatable uptick in revenue. "Our revenue is on track to exceed $4.5 million, which we projected."

In the weeks after the fair, one of the first acts by the newly formed council was to hire Michael Paluszak, a fair veteran and most recently, Chief Executive Officer and General Manager of the Solano County Fair Association in Vallejo, Calif. to be Chief Executive Officer of the Oregon State Fair and Expo Center.  (It was also announced that Hillman will stay on in the interim role of fair manager for the 2015 fair.)

The main reason for the change in organizational structure - moving to a public/private council to manage the fair and fairgrounds - was not due to the performance of the fair, but the fairgrounds. Essentially, the fairground revenue must be improved during the rest of the year. The mission for the 2014 Oregon State Fair was ensure it as a foundation on which the new management can use to build a stronger fairground business. 

"The fair is the flagship event of the fairgrounds," said Hillman.  And while there are other events, including an RV show, "I think to some degree, if you don't come to the fair, you don't come to the other events."

What the 2014 fair provided was higher confidence for the new CEO, "who now can roll up his sleeves and get to work on the rest of the weeks of the year and improving overall fairgrounds business," said Hillman.  

Lower Gate
The revenue increase shows that people did spend more at the fair. More people came and those who came spent more, justifying lowering admission. "We reduced general admission from $11 to $8, which brought more people to the fair and they felt they had more money in their pockets," said Hillman. 

Besides lowering the admission price, the discount-heavy promotions included making unlimited ride wristbands available every day and making Grandstand concerts free. Appealing to the fairgoer's wallets alleviated the fear among fair organizers that "we were losing our relevance, so making it more attractive financially to attend the fair was important," said Hillman. 

The fair also increased its advertising budget to $420,000 (up from $335,000), which according to Hillman is about 10 cents of every dollar of the total fair budget. This was the first year the fair did absolutely no print advertising. "The newspapers have less and less print circulation, although we still advertised on the websites of local newspapers. We spent more on TV, social media and e-blasts." 

Record Midway
The effectiveness the new marketing strategy and the expanded bargain-pricing promotions was no more apparent than at the midway, which was up 20 percent in revenue compared to last year. Funtastic Shows featured 42 rides, including subcontractor Carnival Americana with the Hard Rock. The Grand Wheel was the most popular adult ride, according to Ron Burback, owner of Funtastic Shows, and other adult rides included the Inverter, Zipper and Cliff Hanger. 

Ron Burback, said it was a record year at the Oregon State Fair, crediting to much of the success can be attributed to the expanded wristband promotion. It was the first time wristbands were sold for every day of the fair, advanced sales costing $35 and $50 on the grounds. Also for the first time, each wristband purchase included a free game, corn dog and soda. "We never had a bigger presale," said Burback. "We had a lot of help from Walgreens and a radio station and of course, the fair's new website." 

The expanded wristband program was developed by Burback, Hillman and other fair stake holders through mutual consensus. "We had  meetings where we talk about the things we could do to increase attendance,  to " ‘shock' the people into coming."

The program worked, but Burback pointed out that every day, discounted wristbands were in keeping with the discount-oriented promotions that fairgoers responded to. "They lowered the gate, and had a free grandstand and we had gave them rides. People liked the bargains. If the people come through the gate with more bucks in their pocket, they spend that money on the carnival, on other food stands. They feel they get more value for what they are  spending."

The 2014 Oregon State Fair utilized the Funtastic card system. "You get a more accurate control of the number of people who attended and have a more accurate breakdown," he said.

This more precise acccounting Burback sees as another step towards the structural change for fair management. "If you want to do something new, start with good figures."

While no rides had an Oregon State Fair debut, Funtastic swaps out rides each year and two kiddie rides, the Mardi Gras and River Ride, made a triumphant return.  "We haven't had there in a while and were quite popular," said Burback.  

Future Bright
In addition to the robust ridership, the Funtastic's games were also up from last year. Unlike many midway providers, Burback is enthusiastic about this segment of the business, and besides a "liberal win policy," he emphasizes that "probably 90 percent of the workers we use manning the games are local to Salem Oregon, so it doesn't matter to them who wins."

Burback mentioned that the presentation is fun and inviting, and the games are fair, "the game business will take care of itself. With games, I'm selling teddy bears. We don't call people into the game. If they don't play this game, they'll play that one. We had six or seven games at Oregon. We have a good game operation." 

Looking towards the future of Funtastic Shows under the new fair council, Burback declared, "I'm pumped. The parks department people are good people, but they are in the parks business, not the fair and fairground business. The council has business people on it and people who know the fair business." 

Free Concerts
The other drastic marketing this year's transitional fair implemented targeted the grandstand concerts.  Like the majority of fairs, the grandstand at the Oregon State Fair offered tiered pricing of tickets, plus cost of fair admission. This year there was only a limited amount of VIP Seats - Golden Circle -  ranging $20-$35, depending on the act (VIP tickets included fair admission, as well as preferred concession access and a chance to win a backstage pass) - about 2,500 seats - while the rest of the seats - 8,200 being free. 

The now no-charge headliner names included: Ziggy Marley, The Fab Four, David Spade, Charlie Daniels Band, Joan Jett & the Blackhearts, and The Beach Boys, who closed the fair. 

The decision to turn the grandstand series into essentially a free attraction was a difficult decision, but in part was also forced by the realities of the current entertainment market. Salem is within radius clauses for Portland and Eugene, and like many fairs, the Oregon State has a limited number of days and competing against nearly a dozen other venues, including casinos and a new waterfront park in Salem. "To fill 11 days is tough," admitted Hillman.  "We only had six or seven nights booked by Spring, which wasn't giving us enough time to sell tickets."

While the fair got some big headliners, it was questionable whether these classic names could still guarantee large enough ticket sales. Around March, the decision was to go free, with the concerts being a loss-leader that would pump up the rest of the fair. The strategy worked.
 
The VIP seating sales were very robust for stars like Joan Jett, Charlie Daniels and the Beach Boys, but these names also swelled attendance. "Free concerts drive the people to the fair," he said. 

Hillman also repositioned the free shows to encourage more lingering, thus more spending, on the fairgrounds. He pushed the start of the show forward an hour to 7:00 PM. "When people came to a show at 8:00, they would leave after the show," he said. "This was a perfect formula, give them a nice little concert, and they still had time to enjoy the midway, buy some food, and enjoy the fair."

Bob's Back
Food revenue was up 15 percent. There are about 46 food vendors, and for Hillman the standout wasn't some new fried on a stick concoction, but return of a local food favorite. Bob's was a regional hamburger chain that started in 1955, famously selling hamburgers for 19 cents. If you were in the Beaver State and of hamburger eating age throughout the last half the 20th century - the last Bob's closed in 2001 - your taste buds fondly recalled this classic burger. They were considered by many to be the best burger in the Northwest. Bob's descendants are still in the local food service business and this year, the old was new again and the Oregon State Fair was the stage for the return of the Bob's burger, although the price was $2.19 not 19 cents. 

"They did a great business at the fair, people just loved them and remembered them," said Hillman. "The family members have gotten together with some local business people and now they are going to bring back Bob's as a restaurant because of the business they did at the fair." 

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