Spending behaviour of visitors to the Klein Karoo National Arts Festival

Abstract

The Klein Karoo National Arts Festival (KKNK) is one of the most popular arts festivals in South Africa, but ticket sales have alarmingly declined since 2005 resulting in the Festival already being in a decline phase of its product life cycle. This has a negative impact on the Festival's economic impact and future sustainability. It is therefore vital to increase the ticket sales in order for the Festival to maintain a steady growth rate. Market segmentation can assist the Festival's marketers/organisers to address this problem by identifying the high spending segment at the Festival since they stay longer and are keener to buy tickets supporting the Festivals shows/productions. Market segmentation is the process of dividing the festival market into smaller, more clearly defined groups that share similar, needs, wants and characteristics. The more detailed the knowledge of the needs and motives of potential visitors, the closer the Festival can get to a customised festival program creating greater satisfaction, long-term relationships, repeat visits and an increase in tickets supporting the shows/productions. The main purpose of this study was therefore to determine the spending behaviour of visitors the KKNK by means of establishing the determinants which influence visitor's expenditure and by applying expenditure-based segmentation in order to determine the high spending segment at the Festival. To determine the above goal, the study is divided into 2 articles. Research for both the articles was undertaken at the Festival and data obtained from 2005 to 2008 were used. Questionnaires were interview-administered and distributed randomly during the course of the Festival. In total 1940 questionnaires have been completed in the visitor survey since 2005. Article 1 is titled: "Socio-demographic and behavioural determinants of visitor spending at the Klein Karoo National Arts Festival." The main purpose of this article was to identify the various socio-demographic and behavioural determinants that influence visitor spending at the KKNK. This was done in order to determine which visitors spend most at the Festival and which determinants are most significant in determining their expenditure levels. A regression analysis was used as an instrument to achieve the mentioned goal. Results indicated that occupation, distance travelled, length of stay, the reason for attending the Festival and preferred type of shows/productions were significant determinants that influence the amount of money visitors spent at the Festival. These results generated strategic insights on marketing for the festival in order to increase visitor spending especially on purchasing more tickets for shows/productions. Article 2 is titled: "Expenditure-based segmentation of visitors at the Klein Karoo National Arts festival." The main purpose of this article was to apply expenditure-based segmentation to visitors at the KKNK in order to identify the high spending segment at the festival. An analysis of variance (ANOVA) was used to determine whether there were significant differences between the different expenditure groups. The Festival's market was divided into high, medium and low expenditure groups. Results revealed that the high spenders at the Festival were distinguishable from the low spenders based on their longer length of stay, older age, higher income, main reason to attend the Festival and preferred type of shows/productions. These results were used to compile a complete profile of the high spenders and how the Festival's appeal can be maximised in order to attract more high spenders. This research therefore revealed that certain socio-demographic determinants influence visitor's spending behaviour at the Klein Karoo National Arts Festival. There are further two distinct expenditure groups at the Festival, namely a high and low expenditure group. Knowledge of the determinants which influence visitor spending can be used in combination with the profile of the high spenders to maximise the Festival's appeal in order to attract more high spenders who buy tickets supporting the Festivals shows/productions. This will lead to an increase in ticket sales, a greater economic impact and ultimately to the continuous sustainability of the Klein Karoo National Arts Festival.