Culture Management

Front matter

Lukasz Wróblewski

Culture Management Strategy and Marketing Aspects

Foreword by Bonita M. Kolb

Contents

Porewórd zaa ooo dad odd kia A CPOCMCHION s GOO O R NOOO O O E EENIA Ia ae 1 Culture and its AMISIONŚ o A O O EA WESA

2 Relationships between culture, cultural industries, and creative MONECIESK WZA RANO ÓW OWC EA A EEC

4 Culture and its industries as factors stimulating socio-economic development AGRO O NOC ANR RONA IR CICPENCES: ZO ol zai O EG in O aaa EAER S aS

Foreword

I was pleased when Dr Wróblewski asked me to write a foreword for Culture Management: Strategy and Marketing Aspects. The field of cultural management and marketing has changed dramatically since the first edition of my book Marketing for Cultural Organizations was published in 2000. Dr Wróblewski carries forward the work of understanding the use of business strategy in cultural organizations. At the time my book was published, the idea of using business models to guide the strategy of cultural organizations was strongly resisted. Now many managers and marketers who work for nonprofit cultural organizations understand that they need to develop and implement a business strategy if they are going to survive.

Dr Wróblewski's book explains clearly what has changed to make the use of business models necessary, even in organizations which might have resisted in the past. Globalization has resulted in a population which understands and appreciates art and culture created in other countries. While it might be agreed that this is beneficial for society, it means that cultural arbitrators within a country no longer have the authority to dictate what is accepted as culture. Managers now understand that to gain the support of the public they must explain the benefits of consuming their cultural product.

Besides a sharing of culture across borders resulting in a reduction of cultural hierarchy, Dr Wróblewski explains how the growth of available entertainment options has affected cultural organizations. Previous generations” distinction between high art and popular culture is simply not relevant in a democratized world where people feel free to enjoy whatever entertainment they wish. Both because it is what audiences demand and due to the need for revenue, cultural institutions are faced with the pressure to define their product more broadly. Finally, technology has affected every aspect of life, and the public expects cultural organizations to keep pace. Globalization, technology, and competition from other cultural and entertainment options have resulted in a need for organizations to ensure that their strategies meet the changing needs of the consumer.

I believe that the typology of the cultural industries described in Chapter One is particularly helpful for the reader. Previously it was easy to describe cultural institutions as product-focused and cultural industries as market-focused. After reading Dr Wróblewski 's book I believe there will be an inevitable blurring of this distinction. In fact, while cultural institutions focus more on the market, cultural industries may begin to produce more original artistic work. In the future, cultural managers must be able to balance both types of focus at the same time.

In Chapter Two, which discusses the application of marketing to cultural organizations, I would point the reader’s attention to Figure 2.2. Here, I believe, Dr Wróblewski addresses an important emerging issue for cultural institutions. Traditionally these organizations were the arbitrators who deemed what culture was ‘worthy’. With the democratization of culture and use of technology to disseminate cultural products they are now being bypassed. Individuals who are producing the creative product can now, thanks to technology, go directly to the public with what they produce.

The basis of Chapter Three is a study of the missions and objectives of Polish opera houses. However, it would be an error for the reader to believe that the analysis is only applicable to this type of institution. Reading the chapter should help any manager understand the relationship between their mission and their strategy. Cultural institutions face unique challenges in developing a marketing strategy: these organizations were usually started by a founder with a vision, not started to meet an existing consumer need. In addition, the product is unique and often does not easily communicate its value. What I found of interest is Dr Wróblewski's argument that there is no focus on a competitive advantage. Cultural institutions, such as opera houses, believe in cooperation rather than competition. A competitive advantage is determined by consumer wants and needs and the basis of marketing strategy. When these wants and needs are not part of the original founding of the organization, developing a marketing strategy will be difficult.

Foreword

Dr Wróblewski finds that most missions are product-focused only in that they describe the cultural product they are presenting. A thorough analysis of the institutions” objectives finds that most focus on artistic quality and dissemination of the work, with little or no emphasis on socio, cultural, market, or financial objectives. While in the past an emphasis on only the artistic product was acceptable, it now leaves the cultural organization vulnerable.

According to Dr Wróblewski, one of the issues that keeps cultural institutions from taking a more market-centered approach to strategy is that they define their market segment very broadly. If marketing strategy is based on the consumer, it is understandable that the more widely the institutions define their market segment, the more difficult it is to develop a strategy. His suggestion is that the institutions develop separate strategies for customers, donors, and employees.

If the reader is looking for inspiration on how to communicate the value of their cultural institutions product to the consumer, Chapter Five provides many examples, exploring how technology now helps bridge the divide between the institution and the public. Marketing isn't simply focused on promotion; marketing is also focused on making it easy for the consumer and organization to interact. If this is done effectively, interest in the product will develop.

There is still some resistance from the managers of cultural institutions to implementing business strategy. They can learn from this book that marketing models can be used while still adhering to a mission. It is the responsibility of the manager to ensure a correct balance between the artistic mission and attracting the public.

Bonita M. Kolb Professor Emeritus of Business Administration Lycoming College in Pennsylvania, USA

Nashville, 27" November 2016

Introduction

Any business entity which wishes to maintain and strengthen its position in the market must adapt to changing market conditions and the requirements and needs of its customers. This applies to all sectors of the economy, including business entities in the cultural sector, such as cultural institutions. For over twenty years, we have been able to observe dynamic developments in this sector, which have thus brought about a change in its business structure. This change is mainly reflected in the increase in the number of private institutions and companies in culture-related industries, which in turn has led to ever more pronounced competition in the sector. As a result, managers have been forced to become interested in strategic and marketing management. It has turned out, however, that a lack of basic theoretical knowledge and practical experience has seriously encumbered the efficient preparation and implementation of activities in this area. Difficulties with the use of strategic management and marketing strategies in the cultural sector have been mainly due to a lack of knowledge and sometimes even an aversion to marketing of managers of cultural institutions, as well as its erroneous identification with sales and advertising. Therefore, the main objective of this paper is to present some strategic solutions and to model marketing strategies and other activities in the area of marketing that can be applied in the cultural sector. The practical application aspect of the paper is evident in the indication of the direction future marketing efforts of cultural institutions should take in order to improve their market position. The following issues have been subjected to a detailed analysis:

e Missions and strategic objectives of cultural institutions;

e Difficulties associated with formulating the mission and strategic objectives of

cultural sector entities; e Customer segmentation criteria used by cultural institutions;

e Choosing a course of action and marketing tools;

e The greatest problems associated with the implementation of marketing strategy in

the cultural sector;

e New media in the marketing activities of cultural institutions;

e The possibility of using modern technologies in the marketing communications of

cultural entities.

The study consists of five chapters. The arrangement of the book’s content - leading the reader from general topics to specific issues, as well as the presentation of the content through numerous drawings, graphs and charts - give the book a very practical dimension.

The first chapter, "The Meaning and Essence of the Cultural Sector”, is a theoretical introduction to the issue of management in culture. It introduces and organizes the basic conceptual apparatus related to culture, cultural industries, creative industries, and the cultural sector. The study also presents the division of cultural entities in regard to their marketing orientation and discusses the impact of the cultural sector on socio-economic development.

The second chapter, “Conditions for the Development of Marketing in Organizations in the Cultural Sector”, analyses the conditions for the application of marketing in the cultural sector, the concepts and objectives of marketing culture, as well as the most common reservations or objections it faces. At the end of the chapter, the functional mechanism of the culture market (market conditions for the development of the concept of marketing in the cultural sector) is discussed, and two marketing models are analyzed. The first one has been adapted to the needs of the activities of cultural institutions, and the other can be used by companies in the cultural industries.

In the third chapter, “Strategic and Marketing Planning in Cultural Institutions”, the key elements of marketing strategy are discussed on the basis of source literature and the results of research conducted in cultural institutions: mission and strategic objectives with the main problems in their formulation, the selection of a target market (segmentation criteria for customers of cultural institutions), as well as the selection of the marketing method and instruments (product, price, distribution, promotion, and staff). At the end, four model marketing strategies are proposed which can be used by managers of cultural institutions in

Introduction relation to specified target markets. The main problems associated with the implementation and execution of marketing strategies adopted by cultural institutions are also discussed.

The fourth chapter, “Marketing Strategies Based on Relationships with Key Market Participants”, shows the importance of issues related to the evolution of mutual relations between market participants in relation to the analyzed cultural sector. The chapter presents the process of developing long-term relationships between cultural institutions and stakeholders, as well as the most important measures (benchmarks) for the sustainability of the relationship. Original marketing strategies developed by drawing on original research, based on relationships between consumers of artistic offerings, donors, and employees, are presented.

The final, fifth chapter, “New Media and Technology in the Strategic Activities of Cultural Organizations”, suggests directions which cultural institutions should take with regard to their future marketing activities. It presents new media and modern technologies as material for an effective marketing strategy. The chapter discusses the importance of social media (Facebook, Twitter, Instagram, YouTube, and blogs) in the marketing communications of cultural institutions. It also presents the possibilities of using holograms and virtual advisors as tools for the promotion of culture, as well as other innovative solutions such as virtual tours or applications for mobile devices (smartphones, laptops).

This book is primarily intended for students studying management and marketing in culture. I also believe that the structure of the paper and the issues raised within will be useful to cultural managers, employees in cultural institutions, organizers of cultural activities, impresarios, as well as independent artists who promote their work on their own. The paper may also be useful for businesses, for which cooperation with cultural institutions is a potential opportunity for the development of innovation, creativity, and the integration of employees. Cooperation between business and culture may in fact bring tangible benefits to all parties.

Chapter 1 1 Culture and its divisions

The source literature contains many different definitions of culture. This complex phenomenon is the subject of description and study by various disciplines: sociology, cultural anthropology, ethnography, cultural economics, and the emerging new discipline of culture management (including strategic and marketing management). Each of these disciplines studies and describes culture from its own perspective, leading to a lack of agreement regarding basic theoretical and methodological issues, which can even be seen in the different ways of understanding the main concepts used to describe socio-cultural reality, its phenomena, and its processes. Verbal and terminological disputes are not uncommon, in which the interpretation of the author's statements is inconsistent with their intentions. This is because when cultural researchers, workers, and managers who are directly involved in the promotion of culture use the same terms and descriptive phrases, they do not necessarily speak about the same objective reality, even when using the word “culture” (Grad and Kaczmarek 2005: 11).

Culture is one of the fundamental concepts of contemporary humanities, and although the use of the term only became widely popularized in the twentieth century, its etymological origin dates back to classical antiquity. The Latin word cultura originally meant simply the cultivation of soil, but Cicero, in the Tusculanae Disputationes, expanded its use to intellectual phenomena, calling philosophy the culture of spirit (Kłoskowska 1983: 9). Considering the etymology of this word, we could say that it describes everything that man does and that surrounds him, with the exception of the natural world. In the broadest meaning, culture is the entire material and spiritual heritage of humanity collected, preserved, and enriched over the course of its history, passed down from generation to generation (Polish language dictionary 1995: 1015). According to Szczepański (1965: 47), culture is the entirety of the material and non-material products of human activity, values, and practices recognized, objectified, and adopted within any collectivity, transferred to other collectivities and to future generations.

Tackling the issue of management and strategic marketing in the cultural sector, it is necessary to define the concept of culture, which delineates the scope of the characterized phenomena. When we compare the uses of the word “culture” as used by cultural managers, employees of cultural institutions, and cultural industries, and where culture is understood as a result of research in such disciplines as philosophy, sociology of culture, or cultural anthropology (ethnology), we note significant differences. In the first case, in official nomenclature, culture is simply used to refer to ways and means of disseminating culture, i.e. the form of disseminating culture (cultural activities). In this case we can speak about a practical and administrative understanding of culture. According to this approach, culture is “the whole of a specific type of projects: soirées, sightseeing tours possibly combined with visiting museums and architectural monuments, reader contests, folklore festivals, activities of various types of amateur groups: singing, dance, theater groups, etc.” (Kmita 1982: 5-6). In this sense, culture becomes synonymous with “cultural life”, that is, the collective participation in public forms of the dissemination of culture. In the second case, it is difficult to talk about a single notion. There are plenty of different theoretical and academic concepts of culture; with all their diversity, however, none of the theoretical and academic concepts of culture coincide with that block of events and group activities which are referred to as culture in practical and administrative terms.

Ethnological scientific literature devoted to culture has grown so much that an overview and the systematization of this concept has become a vital necessity. The most comprehensive overview of this kind thus far is presented in the 1952 paper by Kroeber and Kluckhohn. A critical overview of the concept of culture made by Kroeber and Kluckhohn takes into account six types of definitions of culture, or actually six different aspects which tend to be emphasized in various definitions, but rarely occur on their own or independently. These include the following aspects: descriptive, historical, normative, psychological, structural, and genetic (Kłoskowska 1983: 21).

The descriptive definition is the classic form of the early ethnological definitions. It is represented by, among others, the still-useful classic definition by Tylor: “Culture or civilization, taken in its wide ethnographic sense, is that complex whole which includes knowledge, belief, art, morals, law, customs, and any other capabilities and habits acquired by man as a member of society” (Kłoskowska 1983: 21). Historical definitions appearing in the second category mentioned by Kroeber and Kluckhohn emphasize the aspect of tradition constituting culture; for its definition, they use such expressions as inheritance and legacy. Normative definitions emphasize the subordination to standards as a property of cultural behavior; they focus on the unity of a “lifestyle” characterizing particular cultures. The definitions classified by the authors in the psychological category include the mechanisms of the mental development of culture, and thus the process of learning and forming habits. This category also includes definitions defining culture as an adaptive system. Structuralist definitions are characterized by their focus on the overall character of different cultures and their internal connections; definitions of this type speak about a specific culture or different cultures, not about culture in general. Genetic definitions place an emphasis on explaining the origin of culture, its juxtaposition to nature, and its character as a product of the social coexistence of humans.

The notion of culture is so internally varied that when describing marketing and strategic aspects of management, we cannot subject it to an overall analysis. It is necessary to isolate its specific areas. Culture can be divided into many areas, in an obvious way, as a set of forms of social consciousness. Each of them constitutes a specific form of social consciousness. As a result, we can distinguish between the following fields of culture (Kmita 1982: 73-74):

e Technical/functional culture, i.e. a form of social consciousness which regulates the

primary practice (production, consumption, exchange);

e Language, i.e. a form of social consciousness which regulates the practice of

language communication;

e Customs, i.e. a form of social consciousness which regulates customs;

e Art, i.e. a form of social consciousness which regulates artistic practice;

e Science, i.e. a form of social consciousness which regulates the practice of research (science);

e Public political and legal awareness, i.e. a form of social consciousness which regulates political and legal practice;

e Public pedagogical awareness, i.e. a form of social consciousness which regulates institutional (school and non-school) teaching practice;

e Magic, i.e. a form of social consciousness, now basically a relic, in the past regulating the “material and magic” practice;

e Religion, i.e. a form of social consciousness which regulates religious practice;

e Public secular/worldview awareness, i.e. a form of social consciousness which regulates the secular/worldview-forming (“philosophical” in the broadest sense of the word) practice.

Therefore, the entire culture of a given society can be classified as follows: the first division of this culture is formed by the field that is defined as a technical/functional culture and which is a socio-subjective regulator of primary “material” practice (production, exchange, consumption), while the second division is made up of all the other fields of culture (language, customs, art, science; social, political, and legal awareness; social pedagogical awareness, magic, religion, social secular/worldview awareness). It is evident that these other fields of culture do not make up a single form of social consciousness; we can only speak of a certain sphere of social consciousness, a certain sphere of culture - a sphere of symbolic culture.

Kmita, in addition to the division of the cultural fields into technical/functional culture (civilization) and symbolic culture, also introduces a further breakdown into the culture of tangible values, and a worldview-forming sphere of symbolic culture. The first part of the second division covers not only technical/functional culture, but also some fields of symbolic culture. Hence, it can be applied to the division of symbolic culture itself. In this case, we obtain: symbolic culture of tangible values otherwise known as symbolic culture in the narrower sense, and the worldview-forming sphere of symbolic culture. The distinctions made between the spheres of culture are shown in Figure 1.1.

Worldview-forming Culture of tangible practical values sphere of symbolic culture

Technical/functional culture Symbolic culture (civilization)

y

Symbolic culture in the narrower sense

Figure 1.1 Division of culture. Source Kmita (1982: 85)

The fields of symbolic culture which have been accounted for have been divided as follows:

e Symbolic culture in the narrower sense (symbolic culture of tangible practical

values): language, customs, art, science; social, political, and legal awareness;

e Worldview-forming sphere of symbolic culture: (“pure”) magic, religion, social

secular/worldview-forming awareness.

Therefore, the culture of tangible practical values, covering normative beliefs, which determine tangible practical values, is divided into two different spheres: technical/functional culture, and symbolic culture in the narrower sense.

The immediate aim of this distinction of culture is to outline a certain concept of culture, and above all the area which we will use when describing the marketing and strategic aspects of management in culture and cultural industries. Therefore, for the purposes of this paper, the term “culture” is used in its “practical-administrative” sense, identifying culture with forms of making participation in culture more popular, and the cultural entities organizing this participation. In addition, it should be noted that we will be moving in the realm of symbolic culture, and more specifically in the realm of symbolic culture in the narrower sense outlined above. The main field of culture will be art, i.e. a form of social consciousness regulating artistic practice.

2 Relationships between culture, cultural industries, and creative industries

Theoretical approaches to the analysis of the commercial use of culture see this phenomenon in different ways, which leads to the variety of names it is given, such as “cultural industries”, “creative industries”, “leisure industries”, “industries based on intellectual property rights”, or “creative economy”.

The concept of “cultural industries” first appeared in 1947 among the representatives of the so-called Frankfurt School in an essay titled “The Culture Industry: Enlightenment as Mass Deception” by Theodor Adorno and Max Horkheimer, and it was initially used to criticize the modern, mass approach to entertainment. The combination of the words “culture” and “industry” was used in order to shock the reader and disavow popular forms of entertainment, such as second-rate press and film, or music aimed at a mass audience. Today, the term “cultural industries” has lost its pejorative connotations, and it is used to identify those industries that “combine the creation, production and commercialization of a product with an intangible and cultural nature, where the product (its contents) is usually protected by copyright” (UNESCO 2005). These are industries which concentrate on the production of various cultural goods and services, as well as industries whose production is based on the industrial duplication of the original works of artists. Among them in the culture market we can distinguish:

e Audiovisual and film industry;

e Publishing and press industry;

e Recording industry.

Based on the approach of the Frankfurt School, cultural industries are characterized by the following features:

e Economic perception of the product, in which it is important to ensure an adequate rate of return on investment; this economically rational condition often results in the need to avoid novelty as too unpredictable, to provide appropriate “filling” of the product with personalities known to consumers (e.g. movie stars) or to provide an adequate number of attractive special effects;

e Standardization of production associated with the concentration of producers and conducive to the economies of scale, where the increased number of manufactured products reduces their unit cost (e.g. printing books);

e Dichotomy of internal contradictions present in the product, individualization versus standardization, art versus entertainment (e.g. screening a film at the cinema);

e Continuous prolonging of the satisfaction of needs, in which the consumer receives only a semblance of the fulfillment of their expectations and is encouraged to purchase another product which might better satisfy their need for beauty or the need for artistic experience (e.g. a symphonic concert at London’s Barbican Centre).

In 2011, the European Statistical Office (Eurostat) completed work on the ESSnet- Culture Final Report, which sets a uniform way of estimating the contribution of entities from cultural and creative industries to the national economy, for all European Union countries. In it, the sector of cultural industries is described as a group of different areas of activity related to the production of cultural goods, which includes various forms of businesses with different mechanisms for generating revenue. The interpretation of this sector in such a way is the basis of the key document for the future cultural policy of the European Union, referred to as the Essen Declaration. This declaration, which is a summary of the conference “Culture Industries in Europe - A Comparison of Development Concepts” (the conference took place in Essen on 19-21.05.1999, during the German presidency of the EU), identifies ten axioms defining the role of culture industries for the economies of European countries, and indicates directions for further work on policies to support their development (Table 1.1).

Table 1.1 Essen Declaration - ten axioms for cultural industries

CULTURAL INDUSTRIES

Represent a distinct economic sector, whose components make up the rich mosaic of complementary sectors of the economy, which on a regional and local level make it possible to identify individual profiles. Statistical research and conventionally used categories do not include the richness and diversity of structures, as a consequence cultural industries must be treated as a separate entity in relation to economic policy, cultural policy, and urban development. Only when this condition is met, is it possible to fully appreciate the importance of cultural industries to the economy and society, employment policy, urban development, and infrastructure.

Are future-oriented, their characteristic feature is a high level of creativity and innovation in a market where most goods and services have no substitutes. Cultural industries have developed both in terms of content and new technologies. In key areas of employment, cultural industries require comprehensive professional training, knowledge in the field of culture and a high level of qualifications, as well as a huge commitment.

Can secure and create sustainable employment at regional level by generating jobs outside the public sector. Various sub-sectors of cultural industries, dominated by small and medium-sized enterprises, offer many opportunities to create new jobs. They are also strongly rooted in local environments and regional networks.

Can help to reinforce endogenous regional potential, because they depend greatly on traditional and cultural diversity, know-how, and innovation networks existing in towns, cities, and regions of Europe. In the age of globalization, products and services provided by these industries emphasize the regional profile and have a positive impact on the conditions underlying general economic development.

Deploy Europe’s historic heritage in the competitive global market, Europe 's greatest potential is its history and traditions. The cultural richness and diversity of Europe are the product of centuries of work of creative artists, craftsmen, technicians, and their clients. Cultural industries are based on this potential, at the same time contributing to its future development. In many areas of employment in culture-related areas, cultural industries protect the existing cultural landscape, contributing in this way to maintaining the contrast and to reducing the effects of global mass consumption.

Need an active culture policy, despite the fact that they promote the development of culture at a local level they are not, however, able to sell their goods or provide services in the absence of a diverse cultural environment, supported by the public sector.

Need an active economic policy; sectoral strategies and policies should be developed taking into account the many components of the market of the cultural industries, in order to improve the conditions for the development of cultural industries in European cities and regions. This will also contribute to the strengthening of existing structures and the development of innovative potential. Support programs should be established for new companies emerging in the sector of cultural industries, which take into account their needs and individual help should be provided to them, e.g. in the form of access to specialized information, advisory services, or capital.

Require support from urban-development policy; urban environments, which appeal to the international community from an employment and housing location point of view, are preconditions for the development of cultural industries. Both small and medium-sized enterprises are willing to use existing cultural heritage in their activities and programs aimed at tourists. Cultural industries strengthen the position of the centers of European cities, making them more varied and safer.

Require integrated urban and regional policy; a combination of simultaneous support for culture, economy, and urban areas as part of a development policy can create synergy effects in many areas of urban and regional development. The establishment of such strategies and projects will require new forms of cooperation and the creation of new partnerships for bringing these separate policy areas closer in cities and regions. With the reform of the EU’s system of structural funds, the cultural sector has been granted a new status. It was decided that both on the European level and in individual Member States, more resources from the structural funds should be dedicated to promote this sector.

10. Require a fitting context in Europe; the future development of cultural industries depends on the context, provided by a formal and legal framework and infrastructure - they must take into account the specific conditions of cities and regions, as well as the presence of open and flexible partners both in the public administration and financial sector. The trade in cultural goods and services provided by cultural industries requires a balanced level of taxation, social welfare contributions, unified legislation to protect copyright, etc. European policy can support these processes by harmonizing the legal and economic framework within which these processes occur.

Source Essen Declaration: Ten Axioms for the Culture Industries in Europe (1999)

The message from Essen regarding the economic, social and cultural importance of cultural industries has a tremendous value. It certainly showed the possibility of a new approach to the cultural sector, which is formed not only by the traditional, usually subsidized fields, but also industrial areas. It was also decided that cultural industries, like the culture on which they are based, are worthy of promotion, support, and the attention of the public authorities.