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Munich Oktoberfest as a Product Creating Value Case Study


Oktoberfest is a traditional German festival. With a history that stretches over more than two centuries, the fest has turned from a local tradition to a globally popular event, attracting people from different corners of the world. In addition to millions of foreign and German guests (around seven million visitors in 2013), there are also international versions of Oktoberfest in Beijing (China), Sydney (Australia), Bangalore (India), London (the United Kingdom), Blumenau (Brazil), Cincinnati (the United States), and other countries. Not even terrorist attacks in 1980, or critical security issues (incidents, sexual assaults, and cases of violence) during the following years, could decrease the festival’s attractiveness, which is constantly growing in popularity (Alcacér, Bettinger, & Philippi, 2013).

What Is the Oktoberfest as a “Product”?

Over time, Oktoberfest has evolved into a globally recognized brand. From this perspective, the festival can be perceived as a unique combination of products and services offered under the brand. Keeping in mind that the idea of product as a concept refers to a particular offering provided by a company or organization (or set of companies), Oktoberfest can be shown to be a product by reviewing the commodities offered to guests during the festival. Traditionally, these are beer, pretzels, chicken and beef dishes, and miscellaneous souvenirs (Alcacér et al., 2013). Moreover, a product can be defined from the perspective of market demand. Because the interest in Oktoberfest is constantly growing (both in revenues and the number of guests), the festival can be perceived as a product. At the same time, a product can be interpreted from a company’s internal perspective by evaluating customer demand. In Oktoberfest and other festivals, cities are to be considered instead of companies, as they yield an estimate of customer demand. In this way, Oktoberfest is a product because the authorities of Munich, as well as of other cities around the globe, review the most popular products and services and present them at the festival to increase value and market demand (Alcacér et al., 2013; Kahn, 2015).

Does the Munich Oktoberfest Create Value?

The issue of creating value can be investigated from two perspectives: economic and social. According to the economic approach, value is created when people are willing to spend their money on a particular product or visit a particular event. In comparison, from the social perspective, creating value is associated with the desire to own a particular product or become a part of an event (Walter, 2015). It can be demonstrated that the Munich Oktoberfest creates value from both perspectives. In economic terms, people are eager to visit the festival and spend their money on the most commonly offered products and services, such as enjoyable experiences and entertainment, as can be proven by the constantly growing revenues gained by the organizers. Socially, Oktoberfest is one of the most anticipated events of the year, and the number of visitors, both German and foreign, continue to increase every year. Moreover, the fact that there are international versions of the Munich Oktoberfest and points to the desire of potential guests around the globe to become a part of the festivities (Alcacér et al., 2013).

Who Captures Any Value Created by the Munich Oktoberfest?

Because creating value is perceived from two perspectives, capturing it can also be seen in social and economic dimensions. Economically, it is evident that arrangers and represented companies capture value because they receive revenues from the organized event. Nevertheless, other actors enjoy economic benefits from the festival. For instance, those who rent out tents and offer accommodation and transport are also involved in distributing created value, as they are part of the revenue-generating apparatus (Alcacér et al., 2013). Socially, the city of Munich and other cities holding copies of the traditional Bavarian festival, capture value because they become more attractive to foreign tourists and create a particular mood, motivating people to become involved in similar fests.

Key Strategic Issues

Regardless of the overall attractiveness and success of Oktoberfest, some strategic issues should be addressed. For instance, Oktoberfest is a drinking festival. This means that both German citizens and foreign visitors come to enjoy beer and snacks. Nevertheless, the freedom of entrance is limited because the same breweries are typically represented during the fest. Even though they are the most popular beer producers, from the perspective of market freedom, the festival is oligopolistic, as six breweries have dominated for over a century (Alcacér et al., 2013). Even though this choice is motivated by correspondence with the famous 1487 Munich Purity Standards, the fact remains that new entrants are forbidden from becoming involved in the fest.

In addition to the oligopoly challenge, there is a somewhat similar approach to reserving tables in the tents. Even though they are considered to be free to those who purchase a minimum of two liters of beer or pay for dinner entrées, the issue of table reservations is still critical. Just as there are oligopolistic breweries, there are also dominant visitors who can reserve the same tables annually regardless of following the required procedures and payment policies (Alcacér et al., 2013). These challenges point to either inconsistency in management strategies or the desire to focus on the festival’s commercial aspect, giving preference to increasing revenues instead of respecting tradition.

Conclusions and Recommendations

The previously discussed facts lead to two strategic management issues to address: the entrance of new breweries and equal access to reserving tables. To cope with the challenges, it is advisable to focus on two aspects of strategic management: diversification and control measures (Rothaermel, 2017). Diversification applies to the first issue (oligopoly of breweries) because beer is a product. In this case, the idea would be to get other producers complying with the purity standards involved to diversify the product range and help people choose the product they like, therefore supporting new local manufacturers and contributing to their future growth.

As for the second issue (reserving tables), it is paramount to recall that Oktoberfest is a tradition with a unique culture. However, to guarantee that this culture is preserved, it is advisable to implement strict control measures so that everyone following minimum requirements can reserve a needed table. This recommendation is motivated by the fact that thousands of new guests come to visit the festival every year. In the case of failing to implement control measures, these visitors might not be interested in becoming part of the tradition because of discomfort or perceived violations of their consumer rights. That said, regardless of the universal interest in the Munich Oktoberfest, it is essential to pay special attention to honoring traditions instead of focusing on the event’s financial aspects.

References

Alcacér, J., Bettinger, C., & Philippi, A. (2013). Web.

Kahn, K. B. (2015). Product planning essentials. Armonk, NY: M.E. Sharpe.

Rothaermel, F. T. (2017). Strategic management (3rd ed.). New York, NY: McGraw-Hill.

Walter, C. (2015). Arts management: An entrepreneurial approach. New York, NY: Routledge.

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IvyPanda. "Munich Oktoberfest as a Product Creating Value." November 15, 2020. https://ivypanda.com/essays/munich-oktoberfest-as-a-product-creating-value/.

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IvyPanda. 2020. "Munich Oktoberfest as a Product Creating Value." November 15, 2020. https://ivypanda.com/essays/munich-oktoberfest-as-a-product-creating-value/.

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IvyPanda. (2020) 'Munich Oktoberfest as a Product Creating Value'. 15 November.

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