Chapter 3

Museum management and marketing

Introduction

This chapter examines the role a number of relevant factors have played in
developments within museum management. Specifically, it examines the part each has
played in changes to the role of marketing within the organisational structures of
museums, both in Australia and overseas. Consequently, the first section looks at the
rise of a business philosophy within the museum sector. In particular, this section
discusses three issues that have affected the management and marketing functions
within the museums sector: museums as not for profit organisations; professionalism in
the sector; and tension between the roles of manager and curator.

The second section provides insight into the changes to funding and income models in
Australia. To illustrate global differences it also describes the situation in the UK and
the USA. The next section then considers the consequent place of the marketing
function in museums generally and the case museums specifically. To do this it first
analyses the concept of market orientation and how that can be applied to the museum
sector. It then considers the role of marketing within the case museums and proposes
that there is an evolutionary process evident in the way museums have turned to
marketing as a result of the pressures noted in the first two sections.

This chapter concludes by looking at the numerous and diverse constituencies and
stakeholders, or as described here, publics, that museums need to satisfy, and market to.
It considers the idea that the existence of various publics indicates that the museum
sector needs to take into account the changes the twentieth century brought to its
environment, and tailor its marketing strategies accordingly.

Chapter 3 – Museum management and marketing 40

 The rise of a business philosophy

In the USA the decade between 1970 and 1980 has been identified as the period in
which museum management began to incorporate contemporary practices from the
wider management field (Weil, 2000). Events such the first Museum Law Conference in
1973 and the publication of the Museum Accounting Guidelines by the Association of
Science-Technology Centers in 1976 clearly indicate a move to a business philosophy
that was not evident until this time.

In the UK it is the 1980s that are considered as a period of transition (McLean, 1993).
At least partially, this stemmed from the then Conservative government’s promotion of
private sector business practices. When considering four regional museums in the UK
Kawashima (1997) noted that those institutions had imposed upon them “strategic
management, or management of a museum as a whole organisation” (1997: 71). That is,
museums were encouraged to undertake strategic planning “in order to optimise the
value and benefits produced by given inputs, or budgets” (Kawashima, 1997: 71). As
will be shown below, this is a view of the museum—defined as an organisation simply
‘producing’ a product with a process that involves inputs—that has been prevalent in
the past.

In Australia 1975 is considered to be a watershed year for the development of museums

(Rentschler & Geursen, 1999). That was the year that the Committee of Inquiry on
Museums and National Collections, headed by P.H. Pigott (running from April 1974 to
November 1975) delivered its findings, as discussed in Chapter 2. To reiterate briefly
here, the resulting report was significant for not only considering changing funding
models, but also the roles of museums in society. In addition, it supported the concept
of marketing within museum management. It recommended, for example, that market
research be conducted by the state museums under study here (Pigott et al., 1975).

Overall, there are three significant issues that underpin the rise of a business philosophy
within the museum sector and require more detailed analysis. They are issues that have
shaped the sector and therefore have affected the management of, and marketing

Chapter 3 – Museum management and marketing 41

functions within, museums themselves; that is, museums as not for profit organisations,
professionalism in the sector, and tension between the roles of manager and curator.

Museums as not for profit organisations

In many respects, museums’ beginnings have affected the ways they have been
perceived both internally and externally, and consequently the language and behaviours
that have guided their strategies. As noted in Chapter 2, the early museums were
originally collections assembled by private individuals with a view to displaying them
to savants and scholars. Then, in the nineteenth century museums were perceived both
by government and the public as places of education (McLean, 1997), with government
also considering museums as a method of social control, and to promote national pride.
Subsequently, there has been a significant shift in focus as museums, firstly, have
evolved from institutions available only to a cultural elite to institutions aimed at
educating the general public. For example, Victoria’s Industrial and Technological
Museum, established in 1869, had a strong education focus and has been seen as the
first attempt at a technical school (Rasmussen, 2001), as considered in the previous
chapter. The second shift is clearly that of museums becoming broader-based public
institutions. Amongst other issues (noted elsewhere in this thesis), this shift means that
it has been more accurate for some time to describe museums, particularly the six case
study museums discussed here, as ‘not for profit’ organisations. As such then, words
like charitable, benevolent and philanthropic that were part of a museum discourse
throughout the nineteenth and well into the twentieth century, are no longer appropriate
when describing museums or their goals and objectives (Weil, 2000). This fact is
recognised in Australia where the Museums Australia (2002) definition of a museum
specifically notes their not for profit status.

The recognition that modern museums are not for profit organisations (McLean, 1997;
Weil, 2000) places them firmly in a context that allows for the application of
management theories. There are significant contributions to the literature in the not for
profit area (see for example, Andreasen & Kotler, 2003; Sargeant, 2005, in marketing;
and Drucker, 1990; Hudson, 2003, in general management), from which it is evident
that there are a number of issues that are peculiar to not for profit organisations. In a

Chapter 3 – Museum management and marketing 42

marketing contribution, Paton (1996) argued that not for profit marketing meant
marketers needed to consider additional objectives and constituencies, and involves
additional types of exchanges when compared to marketing in the for profit area.
Andreasen and Kotler (2003) separate these issues into two broad dimensions that a not
for profit manager must consider:

(1) the nature of the relationship between the nonprofit and its regulatory and
support environment, and
(2) the nature of the basic exchanges the organization is trying to create.
(2003: 22)

Andreasen and Kotler’s (2003) first point relates to governance, and concerns such
issues as the level of public scrutiny not for profits must deal with, and funding (to be
covered in more detail in a later section), and consequently, to the issues of revenue
streams and profitability. The organisational goals in relation to revenue for not for
profit organisations are inherently different to profit-making organisations, no more so
than in museums. As Weil (2000) has noted:

no matter how ‘business-like’ a fashion a museum may legitimately be called

upon to operate—it is still not a business, and to produce a positive financial
outcome is not its goal… in a museum, money is not an end in itself—it is only a
means (2000: n.p.).

If not for profits do not aim to make a profit, and by definition this is the case (McLean,
1997), the question of measuring performance against organisational objectives in
financial terms becomes an issue (Drucker, 1990; McLean, 1997; Sargeant, 2005)1. In
the not for profit sector, then, profitability is simply not the main criterion for success.
This poses the question of what are the criteria upon which to assess the success of a not
for profit organisation.

Oster (1995: 23) has observed that “consistency with mission” can be a partial
substitute for profitability in the management of not for profit organisations, and that

1
Performance indicators for museums are outside the scope of this thesis, but it does need to be
recognised that there has been considerable debate on the issue for a number of years. See, for
example: Paulus (2003); Weil (2002).

Chapter 3 – Museum management and marketing 43

this explains the increased significance of mission statements in not for profits
compared to profit-making organisations. Museums, as not for profit organisations,
measure their performance against the organisational objectives framed in their mission
statements, as opposed to the purely financial. Other organisations and individuals
interested in the not for profit organisation—their ‘publics’, to be discussed in the final
section of this chapter—also use the mission statement as a basis upon which to judge
performance, as in, for example, the analysis of a charitable institution’s administrative
and marketing expenditure compared to its mission and the funds raised (Andreasen &
Kotler, 2003). This is, of course, not to say that financial performance is not important
in the not for profit sector. As will be argued below, in the twenty first century this is far
from the case.

This issue of the increased significance of mission statements for not for profits relates
to Andreasen and Kotler’s (2003) second point noted above, the nature of the basic
exchanges the organisation is trying to create. Marketing texts usually define marketing
in a similar manner to this definition from Kotler, Brown, Adam & Armstrong (2004):

[Marketing is] a social and managerial process by which individuals and groups
obtain what they need and want through creating and exchanging products and
value with others (2004: 8).

The point that Andreasen and Kotler (2003) highlight is not in disagreement with this
basic definition. There is an exchange in relation to not for profit organisations, and it
can be economic in nature. A visitor to a museum may pay an entrance fee and receive a
service experience in exchange. They may purchase from the museum shop or
restaurant. However, it is the other types of exchange that pose difficulties for
marketing management in not for profit organisations and hence museums. It is useful
to illustrate the point using one of the case museums under discussion in this study,
Melbourne Museum. (See Chapter 6 for a more detailed overview of this museum.) The
following is Museum Victoria’s vision statement from its annual report for 2005/2006:

Museum Victoria will reach out to an increasingly diverse audience through its
collections and associated knowledge, using innovative programs that engage and
fascinate. We will contribute to our community’s understanding of the world and

Chapter 3 – Museum management and marketing 44

 ensure that our inheritance is augmented and passed to future generations
(Museums Board of Victoria 2006: 5).

The exchanges between ‘firm and customer’ relate to human behaviour, experience,
ideas, and values, in short, concepts that are difficult to ‘sell’ in the same manner as a
more concrete product. While the museum experience is perhaps easier to conceptualise
than other products within the not for profit sector, and arguably easier to market, there
are considerable obstacles. Furthermore, sometimes these obstacles can be hard to
define, and manage, such as a museum’s need for recognition, and moral and
professional support amongst peers (McLean, 1997). Others, for example, framing
value propositions to entice volunteers, or donors, or convincing a governing body to
pursue a certain exhibition strategy, are characteristics of the not for profit sector that
have clearly influenced the way in which museums have had to market themselves and
therefore the shape of museums generally. They have, for instance, had to adopt many
of the professional management practices found in the business sector, a point to be
discussed in the next section.

Professionalism in the sector

In an article discussing the changes that have occurred in museums in the latter half of
the twentieth century, Hudson (1998) considers that one of the major factors that has
shaped the modern museum is the rise in professionalism among those who work in
them (1998: 45). (His other factors were the increase in independently funded museums,
the increase in disposable income and the rise of social expectation of what government
will provide.) Hudson (1998) stated, in what is a serious comment despite the tone, that
in the past those who worked in museums were there largely due to “fate and an
inclination towards the quiet life” (1998: 47). In Australia this rise in professionalism
has been evidenced by what Rentschler and Geursen (1999) call “a shift of authority
from the layperson to the professional director” (1999: 13). In a study of art gallery
annual reports from 1976 to 1996 they found that early directors were predominately
either highly educated, with doctorates in their area of expertise, or connoisseurs of fine
art. In the later part of their study period directors were moving towards a philosophy of
“community access and audience development”—essentially managerial concepts—and
away from “elitism and connoisseurship” (1999: 13). (This transition will be discussed

Chapter 3 – Museum management and marketing 45

further in the next section.) In other words, there was a move from museums being run
by the scholarly, but amateur, manager to the professional.

This is not to say, however, that those working in museums since they became ‘public’
institutions have not thought of themselves as belonging to a ‘museum profession’.
There has been a professional self-consciousness evident amongst those who work in
museums since the 1880s (Kavanagh, 1991).2

At least partly, though, the rise in professionalism in museums can be explained by

developments in the wider management and business community. For example, it has
been pointed out that there was a general growth of professionalism in the not for profit
sector as a whole in the latter part of the twentieth century (Koteen, 1997). As was
noted previously, there has been considerable pressure on not for profit organisations to
adopt management and business practises. Training and development for those in the
‘profession’ is one way that this has been brought about. Peterson (1986) has observed
that in the arts and cultural sector during the 1970s there was a growth in the number of
graduate arts administration programs based in university schools of business in the
USA. This has been reflected in the museums sector, where, throughout the latter part
of the twentieth century, there was a proliferation of professional development
seminars, training courses and university programs around the world (Hudson, 1998).
Part of the motivation for this was the realisation in the museum profession that the
“more casual management practices” of the past were no longer adequate (Weil, 2000:
n.p.). In the UK in the late 1980s a considerable number of museum studies and heritage
management courses commenced (Kawashima, 1997). These programs effectively
placed museum staff alongside other professions that required the study of professional
theory and practice. Significantly, it also exposed them to the study of management
theory and practice.

2
The issue of defining and determining the extent to which museum workers, such as curators,
constitute a ‘profession’ is outside the concerns of this thesis. However, Kawashima (1997)
provides a useful discussion.

Chapter 3 – Museum management and marketing 46

One result of this increase in professionalism within the museum sector, however, is the
tension between the roles of manager and curator, and the related idea that a museum
director may be one or the other, but perhaps not both. This will be discussed in the
following section.

Managers vs curators
There are two facets to the tension between the roles of manager and curator. The first
relates to the fact that, as Kotler and Kotler (1998) have said, “traditionally museum
directors have been drawn from the ranks of museum curators and researchers” (1998:
64). Most often they were appointed “on the basis of knowledge and love of objects”
(Kawashima, 1997: 95). Clearly, even in a small modern museum this is not enough of
a skill base to manage what has now become a business organisation. In the major
museums the trend now is to appoint directors at least partly on management skills.
Kotler and Kotler (1998) cite a former museum director’s list of attributes required of a
modern museum director. The successful candidate should have:

1. … [an] intellectual vision, the capacity to develop the mission and push it
in a significant new and more public direction;
2. … [an] ability to build strong programming that will appeal to existing
audiences and arouse support among new constituencies;
3. … experience and expertise in relation to museum’s distinct offerings and
the target markets it has to attract;
4. and … [an] ability to enlarge the museum’s financial base by engaging in
more community relationships, forming more partnerships with
corporations and other supporters, and building a broader and larger
membership base (Boyd, 1995: cited in Kotler & Kotler, 1998; 64).

Though this is a quote from a former director in the USA, where the funding base has
always been reliant on non-government sources, it is still relevant internationally, and
for Australia particularly. A director of a museum is now expected to have skills in
management areas such as human and financial management, and in marketing areas
such as image building, raising funds, and building audiences and community support.

At a forum of museum directors in Australia in late 2004 the issue of whether a museum
director should be a ‘professional’ museum person, that is a person who has a museum
background, or a career manager, was still contentious (Museums and Galleries

Chapter 3 – Museum management and marketing 47

Foundation of NSW, 2004). That is, many considered that a director should come from
the ranks of the curatorial staff, or at least have an art background—to have experience
‘in the trade’ in other words. The opposing view is that a professional and skilled
manager can, in effect, ‘manage’ any form of business. The forum noted that in the past
art critics and others with little or no business management experience could become a
museum director, but that in the contemporary context directors did need to have
management skills (Museums and Galleries Foundation of NSW, 2004). In Australia
the issue of a director being a career manager is even more contentious when the
museum is federally constituted and funded and the appointed director is a career public
servant, as happened with the National Museum of Australia (Martin, 2004).

Nonetheless, the significant point is perhaps that a director’s management skills are
more important in the contemporary museum sector than they have been in the past.
Gilmore and Rentschler (2002) have pointed out that traditionally “the director was
perceived as the keeper of objects, as one who performed the custodial role for the
cultural heart of the institution”, whereas today “museum management entails
understanding both the custodial role and the need to attract visitors” (2002: 745).
Directors may well come from a curatorial background, with strong academic
qualifications, but now they will need to bring with them the skills needed to manage a
complex organisation (Smithsonian Institution, 2003: 13). In respect of the marketing
function, the management dilemma is for them to become better marketing managers
without losing creativity and expertise in custodial management (Gilmore & Rentschler,
2002). However, coming from a curatorial background does not preclude a person from
becoming a successful museum director. Indeed, one art museum director with a
business degree was cautious of a move to museums being run be persons without art
history qualifications, stating “you have to have people who can think with both sides of
their brain” (Stille, 1991: 36).

The second facet to the tension between the roles of manager and curator stems from
their separation in the modern museum. It has been suggested that the rise of
professionalism in museums, discussed in the previous section, may cause tensions
between the curators and the museum administrators and managers—the former, the

Chapter 3 – Museum management and marketing 48

traditional guardians of the museum’s collection, and the latter, the persons responsible
for the museum’s financial viability (Anheier & Toepler, 1998). The basis of this is the
increasing specialisation required in the modern museum. In the past the
curator/director was involved in a wide range of activities that now have their own
specialists (Kawashima, 1997). For example, business professionalisation now means
there need to be financial and human resource staff; the educational role of museums
that developed from the late twentieth century has meant education officers and
instructional designers are frequently on staff; and larger museums may have IT
technicians and exhibition designers. The role of ‘manager’ is similarly increasingly
being seen as ‘specialist’ as well. So, regardless of whether the director of a museum
has a curatorial background, or has been selected from outside the museum sector on
the basis of a certain skill set, they will need to be undertaking a management (and
marketing) role. While the curators perhaps no longer guide the museums, they still
‘guard’ the collection, and there is inevitable tension between that role and at least some
of the functions a manager of a large organisation must manage.

Fundraising is certainly one such area which can cause tension, even between the
director and a governing board. A well known director of a large French art museum is
said to have announced her intention to retire early, stating that she was “trained to look
after pictures”, and not to “persuade people with money to give it to the museum”
(Hudson, 1998: 48). However, fundraising, like sponsorship and commercial activities,
is a reality in the modern museum; a fact to be discussed in the next section.

New museum income models

There are two issues relevant to this study in relation to museum income. The first is
accountability. In recent years there have been increasing demands for accountability of
public monies around the world, with the area of arts and cultural funding no exception
(International Federation of Arts Councils and Culture Agencies, 2004). The climate of
accountability has been instrumental in bringing about the rise of the professional
administrator in the arts and cultural arena (Peterson, 1986). For instance, in the

Chapter 3 – Museum management and marketing 49

museum sector, Weil has attributed the incorporation of contemporary practices from
the wider management field into museum management in the 1990s (noted in the ‘The
rise of a business philosophy’ section above) to:

the increasing need of government funders, corporate sponsors and other donors to
be assured that the considerable sums they were pumping into museums were being
well-employed and for the purposes intended (Weil, 2000: n.p.).

Weil (1994) has previously said that for museums the requirements of government
funding has meant that they have had to move from a focus on inputs to a focus on
outputs and finally to a focus on outcomes—these being the impact a museum has upon
the visitor and society (1994: 42). Consequently, cultural organisations must
demonstrate not only:

(a) that they can account for the resources entrusted to them, and (b) that they
used those resources efficiently, but above all (c) they also used those resources
effectively—they used them to produce a positive outcome in the community they
intended to serve (Weil, 1994: 43).

In the Australian setting, a former Director of the National Museum of Australia,

considers that cultural institutions can only gain by being responsive to the move to
greater accountability (Casey, 2003). However, while the increased pressure for public
accountability and transparency has been one of the drivers of the emergence of
outcome evaluation for the museum sector, there is still considerable debate on how to
measure the impact of museums (Scott, 2004).

The second issue is that there has been pressure on museums around the world to be less
reliant on traditional income models (Tobelem, 1998), with the result they now need to
seek new funding sources, such as commercial opportunities or sponsorship. In the UK
in the mid-1990s some museums started charging admission or asking for entrance
donations as a means of alleviating funding shortfalls (Kawashima, 1998). While it is
argued here that the end result is similar, that is, increased pressure on the museum
sector to be ‘business-like’, there have been differences in these pressures for museums
internationally. In the USA the economic recessions of the 1980s saw museum funding
from all tiers of government reduced (Kotler & Kotler, 1998). However, the major

Chapter 3 – Museum management and marketing 50

change to the museum income structure in the USA has been the rise of new funders.
Up until the mid-twentieth century US museums predominately depended on private
patrons for both their acquisition budgets and their general operating costs, with a
museum’s wealthy, philanthropic trustees providing support. In a 1995 US government
survey it was shown that only 22% of museums’ funding came from private individuals,
compared with 30 to 40% for all other arts and cultural sectors (Weil, 1997). The new
funders in the USA museums are foundations, corporations and government (Anheier &
Toepler, 1998), who bring pressures to bear on museums different to those they have
experienced in the past, which has consequently impacted on how they act.

In the UK in the early 1990s the Conservative government’s policy was to encourage
plural funding—forcing museums to raise some of their own funds—with a
concomitant focus on more business-like management practices (Kawashima, 1997) and
an emphasis on providing “value for money” (Weil, 1994: 43). This has resulted in a
move towards a more customer focussed sector, even though the major source of
funding is still the government. A similar philosophy was apparent in Australia where,
from the 1980s, and due to the rise of economic rationalism, the relationship between
museums and government as funding body changed considerably—with museums
needing to “prove their worth” (Scott, 2003: 293) to maintain their funding. Another
difference in the UK is that it does have a significant ‘independent’ museum sector,
independent in that they do not receive government funding, that has shaped the sector
in that country (Hudson, 1998). Such museums, disapprovingly called the ‘heritage
industry’ (Merriman, 1991), must rely on entry fees and commercial activities for
income, and as a consequence are said to be more “market-oriented” (Kawashima,
1997: 23) than government funded institutions.

The income models are quite different in Australia from other parts of the Western
world, due to the way museums were established. As Casey and Wehner (2001) have
noted, Australian colonial governments contributed funds to establish the precursors to
the major state museums, this thesis’s case studies. They were created as public
institutions from the first. This, then, matched their relationship to their audience at the
time. Australian museums were “born modern” (Anderson & Reeves, 1994: 82), as they

Chapter 3 – Museum management and marketing 51

began their lives open to the public, and supported by the public purse (however
grudgingly at times). This financial situation has not changed a great deal to the present
day, inasmuch as government funding makes up a significant percentage of the museum
sector’s total funding. For example, Australian Bureau of Statistics (2005a) data for the
years 2003–2004 show that across the entire Australian museum sector 68% of income
was sourced from government. Australian Bureau of Statistics data on museums have
only been available since the years 1996–1997. In that period funding was at 64%, with
1997–1998 at 68%, and 1999–2000 also at 68% (Australian Bureau of Statistics, 1998:
17; 1999: 10; 2001: 9). It is useful to look at how these figures compare with those for
the USA in the latter years of the twentieth century—under 30% of museum funding
was from government (Weil, 1997).

Certainly, the case study museums under consideration here all still predominately
derive their funding from their respective state government. Table 3.1 shows the
percentage of each Museum’s total revenue that comes from state funding, combined
with Commonwealth and local government grants.

Despite these relatively high levels of government funding, there is considerable

pressure on Australian museums, as there is on museums around the world, to expand
their revenue streams from non-government sources, either by developing new
audiences (Casey & Wehner, 2001), or as was noted above, by seeking new funding
sources, commercial opportunities, or sponsorship. Overall, there has been a move to
new funding models for museums, and the relationships between funders and
organisation have changed (Rentschler, 2004). As was demonstrated in Chapter 2, how
museums are perceived by society has also changed. The result is that museums have
had to rethink their organisational strategies, and consequently the role of marketing in
their organisational structure, the focus of the next section.

Table 3.1
State, Commonwealth and local government grants as a percentage of total revenue
(Approximate figures derived from each Museum’s 2005-2006 Annual Report)

Chapter 3 – Museum management and marketing 52

 Museum Percentage of Total Revenue

Australian Museum 69

Museum Victoria 77

Queensland Museum 76

South Australian Museum 71

Tasmanian Museum and Art Gallery 84

Western Australian Museum 81

The development of the marketing function3

One of the first references to marketing in the museum sector was in Kotler and Levy’s
(1969) seminal article “Broadening the concept of marketing”. There they posed the
question of whether museums’ then reputation for being “cold marble mausoleums”
was a result of a “failure in the manner of presenting what museums have to offer”
(Kotler & Levy, 1969: 11), implying marketing was the answer. Of course, as McLean
(1997) has noted, this article was written at a time when museums were largely immune
to market forces. The developments under discussion in this chapter had yet to affect, or
perhaps even be noticed by, museums. Indeed, in the UK the term ‘marketing’ did not
even appear in the professional museum sector until the late 1980s (Kawashima, 1997).
However, over the last 25 years museums have become aware of how marketing can
perform a vital role in their organisation’s strategies (Rentschler, 2002). As Kotler and
Kotler (1998) have pointed out:

…marketing, with its focus on the museum experience from the point of view of
visitors and consumers, reflects the latest stage in museum evolution (1998: 15).

In Australia the latter years of the twentieth century saw marketing in the form of visitor
research impact on the way museums viewed their audience (Casey & Wehner, 2001).
This is not to say that marketing has been universally accepted by the museum

3
This section formed the basis of a refereed conference paper: Lehman, K. (2005). Details of
this, and other publications drawn from the research for this thesis, are given in Appendix A.

Chapter 3 – Museum management and marketing 53

profession. There is still some scepticism about the usefulness of marketing in cultural
organisations such as museums (Kolb, 2000), and confusion about the marketing
concept itself (Neilson, 2003). Nonetheless, and as will be shown below, while
marketing is not necessarily in a position of strategic significance within all museums’
organisational structures, the fact remains that it is now part of the discourse of the
museum profession.

According to Tobelem (1998) the introduction of marketing into the museum sector can
be attributed to four distinct factors. The first is the growth of the sector itself, which
covers two related areas. The first is simply the proliferation of museums in recent
years. For example, by the close of the twentieth century in the UK there were
approximately 2,500 museums and galleries, a considerable increase on the 900 in
existence in 1962 (Kawashima, 1997). The second part of this factor is that museums
are now diverse and complex organisations. For the case museums, which are large
government funded bodies, this means significant budgets and a large staff. Museums
generally now need to operate across many functional and social areas, requiring them
to mount research projects, manage extensive community and school education
programs and operate in the commercial world with sometimes large retail outlets and
facilities hire businesses (Peterson, 1986).

The second factor is that of funding. As has been discussed in the ‘New museum
income models’ section above, the issue of funding has shaped the modern museum.
Furthermore, marketing now has a significant role in the generation of income
additional to that provided by traditional sources, such as government. Australian
museums have had to develop new audiences to expand their revenue streams from
non-government sources (Casey & Wehner, 2001; Rentschler, 2004).

Tobelem’s (1998) third factor he describes as revolving around the:

competitive environment into which the proliferation of cultural institutions and
the increased range of leisure time activities has propelled the museums and
monuments (1998: 343).

Chapter 3 – Museum management and marketing 54

As suggested in Chapter 2, in the latter part of the twentieth century museums were not
taking note of the changing tastes of the museum visitors market. By the 1960s, with a
new social and economic order in place, the museum sector was in competition with
other activities (see Table 2.2): from ‘stay at home behaviours’ such as television, the
Internet, and socialising; cultural and education activities; entertainment activities
(Kotler & Kotler, 1998). Museums are, of course, also in competition with one another
for market share (Casey & Wehner, 2001)—at least in the larger Australian cities.

The final factor is said to be the need to understand the museum visitor better. The idea
that an organisation needs to understand its market in order to offer the good or service
that is wanted is paramount in any marketing or customer driven philosophy. It is
however, particularly significant for the museum sector, given the significant social,
political and economic changes outlined in Chapter 2. These changes have had a
profound effect on how museums must operate, and how they are perceived—changes
that museums must respond to (McLean, 1997).

While museums have responded to an extent by incorporating marketing into their

organisational strategies, museums are not necessarily market or customer oriented just
because they have marketing officers or a marketing department (McLean, 1993). There
is a more underlying ethos that needs to be in evidence for them to be considered
“people-centered” (Nielsen, 2003: 23). Further, there is debate on the concept of market
orientation, and then how that can be applied to the museum sector.

Marketing management orientations

A number of scholars have investigated the role of market orientation within the
business philosophy of the private sector (Kohli & Jaworski, 1990; Slater & Narver,
1994). The idea of a market orientation, as an application of the marketing concept, is a
philosophy with considerable support in today’s business world (though there is
opposition: see for example Henderson, 1998). However, there has been something of
an evolutionary process, with market orientation having replaced the previous sales
orientation that was prevalent between the mid 1950s and the early 1970s, and the

Chapter 3 – Museum management and marketing 55

production orientation that went before it. That is, the way business organisations have
viewed marketing has changed over the last hundred years.

The notion of such an evolution has been applied to marketing arts and cultural
organisations (Byrnes, 2003; Kotler & Scheff, 1997), as well as to the museum sector
(Tobelem, 1998). There are differences in the museum sector compared to business,
though. The first is that there is a difference in the ethos of not for profit organisations
in the arts and cultural arena, which can mean that the terms and descriptions seen in the
literature in relation to market orientation do not accurately reflect the sector. As well,
while market or customer orientation has been discussed in relation to not for profit arts
organisations (Gainer & Padanyi, 2002; Sorjonen & Uusitalo, 2003; Voss and Voss,
2000), the application of market orientation theories to the museum sector have been
rare (although, see Rentschler and Geursen (2003) for one example). The second
difference is that there has been a time lag between the point at which the private
business sector began incorporating marketing and the concept of customer value into
its philosophy, and the point at which museums did the same. Museums were exhibiting
a transition from manufacturing and sales to satisfying the needs of the customer during
the 1980s, while the corporate sector experienced a similar transition during the 1950s
and 1960s (Lewis, 1986). These differences mean that it is useful to view the market
orientation concept through a ‘museum lens’.

This section of the chapter considers the idea that there has been an evolution within the
museum sector, as there has with for profit businesses and organisations, from a product
to a sales to a market orientation. Further, it suggests that the role of marketing within
individual Australian museums varies in organisational significance, and that individual
museums can be placed on a continuum which can then be used to link the location of
the marketing function to the museum’s marketing management orientation. First, the
three orientations will be outlined within a museum context—through the ‘museum
lens’ noted above.

Chapter 3 – Museum management and marketing 56

Basic (product) orientation
The earliest concepts of marketing centred around the product. At the turn of the
twentieth century many innovations and inventions provided an increased range of
goods available for purchase. In addition the general public had a higher amount of
disposable income with which to purchase. The product orientation dominated business
thinking from the beginning of capitalism to the mid 1950s, with business concerning
itself primarily with production, manufacturing, and efficiency issues. A product
orientation means that an organisation need only produce a product that offers quality,
performance or features, be that a good or a service, for it to sell—the ‘build a better
mousetrap, and the world will beat a path to your door’ argument (Kotler et al., 2004).
This approach can lead to what Levitt (1975) originally termed ‘marketing myopia’.
Marketing myopia is the failure to define an organisation's purpose in terms of its
function from the customer’s perspective. For instance, Levitt (1975) used the example
of railway companies, who defined their markets in terms of trains, rather than
transportation, consequently failing to recognize the challenge of competition from cars,
airlines, and buses. To avoid marketing myopia it is necessary to consider the needs and
wants of the consumer in more general terms rather than product-specific terms.

Symptomatic of an arts organisation with a product orientation is the tendency for

managers to be “caught up in a love affair” (Kotler & Scheff, 1997: 33) with their
product and fail to see that their market has changed, whether that be due to social,
economic or other factors. The organisation will focus on improving their existing
product, confident that the customer will buy it regardless.

The Smithsonian Institution (2002a) has linked the location of the marketing function to
the success of exhibitions within museums, and determined three orientations based on
the location. The ‘basic’ approach outlined here aligns with their “non-marketing
orientation” (Smithsonian Institution 2002a: 5), where the organisation does not
consider marketing as integral to its strategic planning, and therefore does not have a
‘market’ focus. At its simplest then, the museum following this basic orientation may be
more interested in its collection—its product—than its audience. The curator might

Chapter 3 – Museum management and marketing 57

‘blame’ low attendance figures on the ignorance of the consumer rather than any
problem with the product (Tobelem, 1998).

Functional (sales) orientation

In general, organisations exhibiting a sales orientation believe that consumers exhibit
buying inertia or resistance and need to be persuaded to purchase. The rise of this
orientation within business philosophy led to the increased significance of advertising
and personal selling as part of the marketing mix (Kotler & Scheff, 2003). This is
because the focus is “on creating sales transactions rather than on building long-term,
profitable relationships with customers” (Kotler et al., 2004: 19). The incorrect
assumption is that the customer will be persuaded by an advertising campaign to
purchase a good or service that they do not want, and that they will like it enough to
purchase again. It also assumes that there will not be any negative repercussions
stemming from their not liking the product, for example, their telling friends and
colleagues of their dissatisfaction. This is also incorrect, for as Farber and Wycoff
(1991) have suggested, the average satisfied customer tells three others about their
positive experiences, while the average dissatisfied customer tells 10 others of their
negative experiences.

While it has been noted above that there is an evolutionary process in relation to the role
of marketing in the private sector, a sales orientation can still be seen in many modern
organisations. Typically these organisations believe that it is possible to increase the
size of their market by selling. Arts organisations are no different—marketing’s
function’ is to ‘sell’ the product. It can also be seen in the case of museums. With this
‘functional’ orientation, as it is termed here, marketing enters the strategic planning
process only in connection with an advertising and promotion strategy that relates to a
specific exhibition or event. This is what the Smithsonian Institution (2002a) has called
an “advertising orientation” (2002a: 5).

In other words, marketing is a function necessary to achieve an objective, such as

increasing revenue. The blockbuster exhibition is a good example. There are short term
benefits to ‘selling’ a blockbuster, an increase in visitor numbers for instance, but the

Chapter 3 – Museum management and marketing 58

role of marketing is not to develop a relationship with a customer, only to sell the
product. The blockbuster exhibit is still common throughout Australian museums and
art galleries, despite the recognition amongst museum directors of their negative
implications (Museums and Galleries Foundation of NSW, 2004).

Strategic (market) orientation

It was noted above that an organisation exhibiting a product orientation aims to sell
what they produce, as opposed to producing what their market wants. Similarly, the
sales orientation approach ignores customer needs and wants, instead focussing on
“customer conquest—getting short term sales with little concern about who buys or
why” (Kotler et al., 2004: 20).

A market oriented organisation is one that allows the wants and needs of customers, as
well as its competitive environment, to inform its strategic decisions, ideally with its
corporate culture systematically committed to creating customer value. An arts
organisation with a customer focus, for example, would use research to plan different
approaches to communicating with its different audiences (Byrnes, 2003). According to
the Smithsonian Institution (2002a), the museums that are the most successful in
attracting large audiences tend to have a “marketing orientation” (2002a: 5), where
marketing is a senior level position that participates in strategic planning. They focus on
the market and this informs their overall strategies. The term used here to categorise the
orientation of such institutions is ‘strategic’.

However, there are two criticisms that can be levelled at the usefulness of the customer
orientation generally, and in the context of the museum sector particularly. The first is
that a stated marketing orientation does not necessarily mean that there is a customer
focus. That is, it needs to be recognised that there could be a significant gap between the
‘official’ policies and the actions of organisations. The second criticism is that a market
orientation is not necessarily appropriate for the arts or creative sector. Kotler and
Scheff (1997) have said that a “purely market-centered philosophy is inconsistent with
what the concept of art is all about” (1997: 17). By this they mean that part of
motivation for art—modern museums have the same underlying aims—is to provoke

Chapter 3 – Museum management and marketing 59

and challenge. The question is how an organisation that constantly challenges the
‘status quo’ can simultaneously exhibit a customer focus.

In the not for profit theatre industry in the USA Voss and Voss (2000) found that
customer orientation is associated negatively with firm performance. But they did note
that the not for profit theatre sector exhibited one set of industry conditions that may not
be favourable to a customer orientation, that is:

not for profit goals; high rates of intangible and artistic innovation; customers
who may not be able to articulate their preferences; and lead [first adopter]
customers who rely on the product experience of the artist to inform and challenge
them (Voss & Voss, 2000: 78).

The implication is that other ‘sets’ may be favourable. This would be the case for other
industry sectors within the general artistic and cultural sector. So, while museums
exhibit some of the above conditions—not for profit goals, and perhaps customers who
may not be able to articulate their preferences, the sector is sufficiently different as to
benefit from a customer orientation.

The orientation evolution

It is worth repeating Weil’s (1994) point noted earlier: museums have moved in recent
years from a focus on inputs (its collection, its resources), to a focus on outputs (its
exhibitions), and finally to a focus on outcomes (the impact it has upon the visitor and
society) (1994: 42). At its simplest then, the museum following a basic orientation may
be more interested in its collection—its product—than its audience. With the functional
orientation, marketing within the museum organisational structure is a function
necessary to achieve an objective, such as increasing revenue by promoting exhibitions.
For the museum with a strategic orientation, marketing is integral to planning and
informs the culture of the organisation and its staff, and will be linked to objectives such
as visitor impact.

An evolution through various stages of marketing awareness within museums and

performing arts organisations has been considered by Rentschler (1998; 2002) in a

Chapter 3 – Museum management and marketing 60

study of marketing articles in seven major international journals, which discovered
periods of development, where marketing was viewed in different ways over time. In
the foundation period (1975–1984), museums and performing arts organisations did not
consider marketing in any holistic sense and concentrated on promotional activities. The
professionalisation period (1985–1994) had marketing playing a limited role in
organisational strategy. The most recent period covered, the discovery period (1995–
2000), found marketing to be now included in the arts organisations’ “standard
operating procedures” (Rentschler, 2002: 13). Gilmore and Rentschler (2002) have also
considered the changes in museum management from a custodial to a marketing
emphasis, reflecting an evolution from product to customer.

The evolution through these orientations within the museum sector has also been
evident in the increase in visitor studies since the 1980s. As was noted in Chapter 2, the
increasing use of visitor studies and evaluations within the museum sector shows that
there has been a change from “a functionalist, ‘object-centered’ ideology toward a
humanist, ‘people-centered’ one” (Neilson, 2003: 23). As suggested above, however,
the museum sector has been slower than the private business sector to recognise the
potential uses of marketing. Casey and Wehner (2001) consider that in Australia the
increasing profile of the marketing profession in the 1960s did impact on the way
museums viewed visitors. However, as they also note, it was not until 1991 that the
Australia museum sector saw its first permanent evaluation and visitor research co-
ordinator, employed by the Powerhouse Museum in Sydney (Casey & Wehner, 2001).

Nonetheless, from the 1960s onwards Australian visitor research was seen as a vital tool
in the development of strategies and policies that would better enable museums to tailor
their programs to not only their current audiences, but also to non-visitors (Casey &
Wehner, 2001). Subsequently, and as has been noted previously, there has been a
significant increase in visitor studies since the 1980s. This is evidence of the evolution
from a product to a sales to a market orientation within the museum sector, as there has
with for profit businesses and organisations, as understanding your target market is at
the heart of a marketing. A lack of interest in visitor studies—the basic data for market

Chapter 3 – Museum management and marketing 61

research—is, therefore, indicative of a lack of interest in marketing itself (Kawashima,
1997).

A further complication comes with the understanding that not only are there visitors, the
‘external’ target market/audience, but that there is an ‘internal’ audience as well
(McLean, 1993), and these publics are a complex phenomenon requiring strategic
management. The next section will look at the numerous and diverse publics that
museums now need to satisfy, and of course, market to. The fact there are various
publics to market to makes the concept of integrating marketing communications, which
will be introduced in Chapter 4, vital for the management of a museum.

Marketing to the museums’ publics4

The concept of an organisation having various ‘publics’, to which they have to either
simultaneously or at different times market to, has been addressed in the general
marketing literature. For example, Kotler et al. (2004) state that: “a public is any group
that has an actual or potential interest in, or an impact on, an organisation’s ability to
achieve its objectives” (2004: 168) and lists seven such groups that all organisations are
involved with. It is useful to outline these here:

Financial: Financial publics are those entities that influence an organisation’s

ability to raise funds, such as banks, investment firms and shareholders.
Media: The media publics include the print and broadcast media, and are the
group that can be influential in carrying news, features and editorial comment.
Government: All organisations can be influenced by government decisions,
regulations or legislation, relating to such diverse issues as trade tariffs and public
safety.
Citizen-action: These publics include consumer groups, environmental groups
such as Greenpeace as well as industry lobby groups.
Local: Local publics can include community groups and resident groups, that
might influence organisations to be ‘good local citizens’.

4
This section formed the basis of a refereed conference paper: Lehman, K. (2006).

Chapter 3 – Museum management and marketing 62

 General: The general public’s attitude to an organisation can have significant
influence on its strategies.
Internal: Internal publics in the case of a ‘general’ organisation includes its
salaried workforce, managers, and boards of directors.
(Kotler et al., 2004: 168)

These groups provide a sound overview of how the business sector organisation
interacts with its publics. However, in relation to the not for profit sector, the concept
that the organisational goals are inherently different to a profit making organisation has
been widely recognised (Hudson, 2003), as outlined in the previous ‘Museums as not
for profit organisations’ section. Along with these differences in organisational goals
comes a different, and sometimes more significant, set of relationships between publics
than those evident in the profit making business sector (Andreasen & Kotler, 2003).
Sargeant (2005) proposes that the concept of multiple “constituencies” (2005: 27)
makes the division between attracting resources and allocating resources in not for
profit organisations much more complex. Andreasen and Kotler (2003) have also
considered publics in the not for profit sector generally. They have viewed the not for
profit organisation as a “resource conversion machine”, where Input Publics supply the
resources that are converted by Internal Publics into useful products that are delivered
by Partner Publics to the organisation’s Consuming Publics (Andreasen & Kotler,
2003: 76). Kotler and Scheff (1997) proposed a similar model for the performing arts
sector. The actual groups are similar to the general model but they give a clearer outline
of the not for profit sector when arranged according to their functional relationship to
the organisation. Table 3.2 sets out a resource conversion model of museum’s publics,
where equivalent additional groups within each public relevant to museums have been
added.

Some groups not evident in the profit making sector are extremely significant in the not
for profit sector. Though public companies may have a board of directors that exercise
control, the governing body of a not for profit organisation such as a museum can have
considerably more influence over policy and strategy (McLean, 1997). While they are
frequently meant to be representative of sectors of society, perhaps to represent
stakeholders, they can be inclined to have their own agendas and interfere in the daily
operations of the museum. This is of particular concern to the museum profession in

Chapter 3 – Museum management and marketing 63

relation to the perceived increase in the politicisation of museum boards, where the
board may be subject to pressure from government (Museums and Galleries Foundation
of NSW, 2004).

Table 3.2
A resource conversion model of museums’ publics
(Adapted from Andreasen & Kotler, 2003; Kotler & Scheff, 1997)

Input Publics donors, funding bodies, regulators,

sponsors, lending museums

Internal Publics senior management, curators,

government departments, boards of
management, trusts, staff, volunteers

Partner Publics other museums, exhibition

promoters, government agencies,
marketing firms, advertising agencies

Consuming Publics clients/customers, educational

institutions, research community,
local citizens, activists, the general
public, the media.

Another significant group in the not for profit sector are the volunteers, included in
Table 3.2 in the Internal Publics section. Volunteers are an increasingly scarce and
invaluable resource in the not for profit sector (Bussell & Forbes, 2002). In Australian
museums volunteer management is considered to be an integral part of human resource
management, and is increasingly professional (Van Tienan, 2001). As a recent
Australian Bureau of Statistics (2005a) publication showed, volunteers outnumbered
paid employees by a ratio of almost 3:1 in the years 2003–2004, indicating that
Australian museums rely on volunteers for a considerable percentage of their labour
force. It is vital that such ‘support’ publics as the board of directors and volunteers are

Chapter 3 – Museum management and marketing 64

considered by museums, as not for profit organisations, particularly when their
marketing strategies involve their donative activities (Andreasen & Kotler, 2003).

The model depicted in Table 3.2 includes the numerous and diverse publics that
museums need to satisfy. As an alternative, McLean (1993), writing specifically on
museum marketing, notes that museum’s “constituencies” (1993: 14) can be divided
into two broad groups, that is, the visitors and the funders. McLean (1993) recognises
that the issue is more complex than simply dividing the constituencies into two. For
example, she points out that in some circumstances the visitors—read the general
public—are the funders, if they either pay an entrance fee, or contribute to the
museum’s upkeep through taxes, which may certainly be the case for many local
museums. Similarly, the funding bodies themselves provide more that financial support.
Museum boards and trusts can have a wide range of responsibilities, including the
provision of sound governance. Publics can, then, play more than one role, and do not
act in isolation from each other—facts that can make museum management more
difficult than for profit business management (Kawashima, 1997).

Nonetheless, such broad groupings of publics do not illustrate the complexities of the
current twenty first century environment in which museums find themselves. For
example, museums have developed a role as economic development engines within
communities, as tourist destinations in cultural precincts driving income and
employment (Kotler & Kotler, 2000). Similarly, local and regional governments are
increasingly using clusters or hubs of museums and other cultural institutions as the
impetus for the redevelopment of public space (van Aalst & Boogaarts, 2002): for
example, New York’s ‘Museum Mile’ and Berlin’s ‘Museum Island’. Such roles mean
the days of museums having a narrow constituency base—collection, research and
professional activities—is long gone. Similarly, while McLean’s (1993) ‘funders’ do fit
into the Input Publics mentioned above, in the contemporary context the group needs to
be widened to include ‘potential’ funders. This has particular relevance in the Australian
museum sector. That is, in light of the changes to the funding model for museums
generally, there needs to be marketing strategies within museums directed at attracting
continuing support. Corporate sponsors then become a legitimate public for the modern

Chapter 3 – Museum management and marketing 65

museum, as does the potential donor or benefactor. Donations can be particularly
important for new acquisitions (Crisp, 2005), with personal philanthropy on the rise in
both the UK and Australia (Crisp, 2006). As well, museums do need to consider, for
instance, a marketing program to attract bequests as part of individuals’ wills. They
need to consider commercial opportunities where appropriate. In short, museums need
to consider marketing strategies that take account of the realities of the twenty-first
century environment if the museum sector is to prosper.

Conclusion

This chapter has examined a number of factors that have influenced recent
developments within the museum sector, and the impact those factors have had on the
role of marketing within the organisational structures of museums. The first section
looked at the rise of a business philosophy within the museum sector, and noted three
issues that have directly affected museum management and marketing. The first, the
museum as a not for profit organisation, showed that the characteristics of the not for
profit sector have shaped museums, and therefore, the way in which museums have had
to market themselves. As part of this, museums have had to adopt professional
management practices from the business sector, which was the second issue considered.
Thirdly, along with the increase in the professionalism of the sector came an inevitable
tension between the roles of manager and curator, which is at least partly indicative of
the increased specialisation in museums.

The second section began by discussing the move to make not for profit organisations
such as museums more accountable. It then considered the new income models evident
in the museum sector. Essentially, despite relatively high levels of government funding
there is significant pressure on museums to expand their revenue streams either by
developing new audiences, seeking new funding sources, exploiting commercial
opportunities, or attracting sponsorship (Rentschler, 2004). The result of these new
models, and the rise of the business philosophy noted in the first section, is that

Chapter 3 – Museum management and marketing 66

museums have had to change their organisational strategies, as well as the role
marketing plays in them.

The next section discussed the place of the marketing function in the museum sector
with particular emphasis on the case study museums. An analysis of the concept of
market orientation and how that can be applied to the museum sector followed. It then
considered the role of marketing within the case museums and proposed that an
evolutionary process is evident in the way museums have accepted marketing as a
means of achieving organisational objectives. Marketing has moved from the periphery
to be more central in museum manager’s concerns, but it still does not necessarily play
a strategic role in all museums. At a minimum, marketing was seen as a tool for
‘reaching’ the public, but it was pointed out that the visitor is not the only audience and
museums need to consider other groups in their marketing strategies.

This chapter, then, concluded with an analysis of the concept of there being various
‘publics’, stakeholders that museums need to satisfy, and consequently market to. It was
noted that there are different models that give different interpretations of the publics
involved. Further, models that come from the for profit business sector place too little
emphasis on publics vital to museums. A modified resource conversion model was
shown to have the most utility in understanding the role of publics in the museum
sector. Overall though, the concept of the publics demonstrated that museums do need
to take into account a broad range of marketing strategies that reflect the changes in
environment that the twentieth, and now the twenty-first, century have brought to the
museum sector. Museums are now recognising that one blanket marketing strategy will
not work for all their publics—individuals, organisations and society are all much more
complex, and consumers are much more sophisticated, than they were even twenty
years ago. As a consequence, modern museums successfully communicating their value
to their publics are using marketing strategies formerly only found in the business
sector.

Chapter 3 – Museum management and marketing 67