One I've enjoyed recently is Reis and Trout's Marketing Warfare. Beyond gems such as them complaining about Coke abandoning the slogan 'the real thing' (don't worry guys, it came back!) and discussion of different types of strategy, they also made the following nice distinction:
Every marketer has three types of products: one kind of product to advertise, one kind to sell and one kind to make money on.
It's wasteful to advertise a product just because you can sell it and make money on it, even if you can make big money on it.
Would a motion picture theater advertise the popcorn it sells? No, you advertise the movie and you make money on the popcorn and the drinks.
Automobile dealers advertise a car at its stripped price and hope they don't sell one that way because they make their real money on the automatic transmission, power breaks, AM/FM radio, and the other accessories.
Conceptually, a burger chain advertises the burger, sells the french fries along with the burger, and makes money on the soft drinks. That's the pattern that will drive profits down to the bottom line. If the kids drink enough of your 90 cent Cokes, you can almost afford to break even on everything else.The obvious parallels in the arts would be advertising a theatre production, selling the show with an after-show talk, but making money on beer, ice-cream and programmes. Or advertising a special exhibition, selling entrance to the whole museum or gallery, but making money in the café and gift shop.
Of course, we're unlikely to make the mistake of advertising the ice-cream rather than the show. But perhaps we're not always as quick as we might be to take advantage of the 'peripherals' where the real margin is to be had. I suspect it was recognition of this that prompted the takeover of Crucible Corner and the opening of Crucible Café by Sheffield Theatres (and of course at their 40th birthday they made a point of encouraging people to stay and use the paid bar for as long as possible!), as well as the well-stocked bar at Square Chapel in Halifax.
The distinction between what you advertise and what people buy is a more interesting one, perhaps. In Oliver Uberti's engaging lunchtime talk from the National Arts Marketing Project Conference, he shows (at 36:07 in) items from the gift shop of the Museum of Unnatural History: bottles of 'formaldehyde', 'semi-formaldehyde', 'informaldehyde' and 'businesscasualdehyde'. It's a great gag, and relies on the full range for its full effect (it's also selling a story – of the joke and the amazing, fun place they discovered it in – rather than the product per se). But of that range, which ones are likely to sell? They're all $7, but I'd guess you'd go somewhere else to meet your everyday formaldehyde needs. And 'businesscasualdehyde' perhaps feels a bit laboured on its own (though you might get it if you were buying a whole set). I'd guess that 'informaldehyde' is the main one they shift (albeit as a novelty), with the others just being advertising. But if you put a bottle of 'informaldehyde' on a shelf on it's own, I doubt it would sell as well.
I suspect that there are a range of shows that are advertised in theatre's programmes that add value as much by their contribution to overall market positioning as to sales. This is generally discussed in terms of artistic mission ('I know it's not going to be as popular, but it's the sort of thing we're here to do') but could also be seen as market positioning: the difference between what you advertise and what you sell. If you are seen to be putting on creative and edgy work, then it adds a bit of spark to the 'mainstream' works, which is really where the game is won or lost.
This suggests that rather than just treating them as 'good things in themselves, but of little practical consequence', the 'small-hitters' (the studio shows, the minor temporary exhibitions) should be seen as an active and important part of the advertising for the 'big hitters'. This makes the relationship between the two (by developing the profile of actors/artists for later, greater things, or tailoring the reputation of the venue) as potentially being as important as their short-term sales.
Reis and Trout emphasise the need to (in their militaristic analogy) 'attack on as narrow a front as possible'. Following on from the previous quote in discussing the 'Burger Wars', they say:
The biggest mistake companies make is confusing the product they sell with the product they should advertise. it doesn't matter so much what you sell to a customer once that customer is in the store. But advertising the same item might be a big mistake if it undermines your position.However, in the arts (in many cases; within reason), diversity and innovation strengthens, rather than distracts from, the core offer. Creativity is our 'hamburger position'*. That may make the more appropriate parallel for 'supporting' product concept cars and/or rally cars, that emphasise the qualities that people then buy in their production model equivalents.
Selling fish sandwiches is one thing; advertising fish sandwiches is another. Especially if inclusion of that product undermines your hamburger position.
That said, unless the different products do support each other in a coherent market position, arts organisations need to beware diversifying their offer too far. Too often, arts organisations act (and are encouraged by funders to act) as if they are the 'market leader', who can afford to have multiple product lines, rather than as 'guerillas', who need to find a patch of territory that they can make their own and hold. The next couple of years are likely to be particularly difficult for organisations that are over-extended. Gaining clarity about what you need to be advertising, selling and making money from is an important step in avoiding this risk.
*I'm trusting you to know I can tell the difference between making art and flipping burgers!