Friday, April 10, 2009

MMPI's Falanga: the case for a Med Mart

I talked today with MMPI vice-president Mark Falanga, who gave me a better explanation than I've heard before about why MMPI thinks the Medical Mart will be successful.

To succeed, Cleveland's Medical Mart has to attract at least three audiences. 1) Medical manufacturers have to rent showrooms in the mart. 2) Medical conferences and trade shows have to book the convention center. 3) Non-medical conventions have to book the convention center too.

The showrooms will offer "tremendous economic benefits for a company," Falanga says. "They can set up their equipment in a manner best suited for showing off the benefits of their equipment. They'll have permanent displays, and not have to move all over the country. The company can benefit from the traffic of each of the trade shows cycling through the facility over a year."

The Medical Mart should give Cleveland an advantage in attracting medical conferences and trade shows. "The showrooms will, by and large, be occupied by anchor companies... with more customers than anyone else," Falanga forecasts. So, "each of those trade shows will be anchored by some of the largest manufacturers in the business. Those manufacturers will drive a lot of customers into those shows." So the showrooms will attract more attendees -- medical equipment buyers. The promise of more buyers will attract more temporary exhibitors, and vice-versa, making the trade shows successful, MMPI believes.

That's how MMPI's other facilities, including the Merchandise Mart in Chicago, succeed. "We pioneered this concept of marrying a temporary trade show to a permanent showroom," Falanga says.

But it hasn't been done in the medical industry before. Talking to Cleveland city council in February, Falanga talked about the possibility of Cleveland attracting 10 percent of all the nation's medical trade shows and 5 percent of all medical conventions -- or 60 shows and 100 conferences a year. That's what MMPI's estimate of $1 billion a year in economic spinoff is based on. "I was using that as hypothetical example," Falanga says. "I just wanted to put into perspective how attainable that is."

Last month the Plain Dealer cast doubt on the $1 billion a year figure, in part by asking if 60 medical shows will really come to Cleveland. The PD noted that San Diego -- which doesn't have a Med Mart, but does have immaculate weather -- hosts 16 medical conventions in a year.

Is 60 shows optimistic? "It might be," says Falanga. "We’ll see how it all goes."

The worst-case scenario is spelled out in the county's deal with MMPI. If the company can't book five trade shows or conferences and 10 showrooms in the next year, the county can back out.

Falanga says the bookings may start slow, but will build on each other. "The reality is, we'll attract some showrooms, which will attract trade shows and conferences, but doing that will attract more showrooms, so we'll be able to attract more trade shows and conferences," Falanga says.

"It’s going to take many years for this to ramp up, for Cleveland to prove itself to the medical community. It’s a long term plan, but we’ve got a clear focus on what we’re going after, and we think it’s all attainable."

I'll post more about my conversation with Falanga this weekend.

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