The Power of Promotional The Power of Promotional ProductsProducts

Promotional Products Association Promotional Products Association InternationalInternational

Table Of ContentsTable Of Contents

Section A: Industry Information and StatisticsSection A: Industry Information and Statistics

Section B: Applications of Promotional ProductsSection B: Applications of Promotional Products

Section C: Case StudiesSection C: Case Studies

Section D: ConclusionSection D: Conclusion

SECTION ASECTION A

INDUSTRY INFORMATION AND INDUSTRY INFORMATION AND STATISTICSSTATISTICS

Items used to promote a product, service Items used to promote a product, service or company program, including advertising or company program, including advertising

specialties, premiums, incentives, specialties, premiums, incentives, business gifts, awards, prizes, business gifts, awards, prizes,

commemoratives and other imprinted or commemoratives and other imprinted or decorated items.decorated items.

What are Promotional What are Promotional Products?Products?

.

How big is the Promotional Products Industry?

$16,552,291,971

Source: The PPAI 2001 Sales Volume Estimate

GROWTH OF INDUSTRY SALESGROWTH OF INDUSTRY SALES(PPAI Sales Volume Estimates by Year)(PPAI Sales Volume Estimates by Year)

$5.012 $5.129$5.23 $6.22

$7.01$8.04 $9.49 $11.88 $13.18

$14.94$17.85

$16.55

0

2

4

6

8

10

12

14

16

18

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

In Billions Of Dollars

2001 SALES BY PRODUCT CATEGORY(2000 figures in parentheses)Food

1.7% (1.9%)

Electronic2.3% (2.3%)

Textiles 2.4% (2.0%)

Personal 2.2% (2.6%)

Wearables29.3%

(29.1%)

Writing Instruments10.6% (10.5%)

Desk7.6%

(7.0%) Calendars 7.0%

(5.3%)

Games2.6% (4.4%)

Glassware5.5% (4.7%)

Recognition4.0% (4.1%)

Sporting Goods3.3% (4.0%)

Computer 3.1% (3.1%)

Other2.9% (3.5%)

Housewares2.6% (2.8%)

Bags5.9%

(6.9%)

Automotive3.5% (2.8%)

Buttons3.5% (3.1%)

Top Ten Selling Individual ProductsTop Ten Selling Individual Products

1. Pens1. Pens 2. Mugs and Cups2. Mugs and Cups 3. Golf/Polo Shirts3. Golf/Polo Shirts 4. T-shirts4. T-shirts 5. Caps/Hats5. Caps/Hats 6. Calendars6. Calendars 7. Jackets7. Jackets 8. Key Tags/Rings8. Key Tags/Rings 9. Tote Bags9. Tote Bags 10. Mouse Pads10. Mouse Pads ((These results are based on responses from a representative sample of These results are based on responses from a representative sample of

distributors in a survey conducted exclusively for PPAI by University of distributors in a survey conducted exclusively for PPAI by University of Southern Mississippi.)Southern Mississippi.)

Top Buyers of Top Buyers of Promotional ProductsPromotional Products

by Industryby Industry

1. Financial 1. Financial 2. Health Care 2. Health Care 3. Not-For-Profits3. Not-For-Profits 4. Education 4. Education 5. Manufacturers (unspecified) 5. Manufacturers (unspecified) 6. Insurance6. Insurance 7. Automotive7. Automotive 8. Government8. Government 9. Entertainment and Sporting Events9. Entertainment and Sporting Events 10. Media10. Media

2000 Top Buyers Study by PPAI

Buyer TrendsBuyer TrendsIn a 1998 study of 839 business people:In a 1998 study of 839 business people:

95% use promotional products95% use promotional products 30% increased their promotional product budget this 30% increased their promotional product budget this

yearyear 72% use distributors 72% use distributors Quality of ideas rated #1 factor in selecting a Quality of ideas rated #1 factor in selecting a

distributordistributor 42% of respondents rated price as the #2 factor in 42% of respondents rated price as the #2 factor in

selecting a distributorselecting a distributor

SECTION B

APPLICATIONS OF PROMOTIONAL

PRODUCTS

2001 SALES BY PROGRAM CATEGORY

(2000 figures in parentheses)

Other2.0% (1.9%)

Not-for-Profit Programs

4.2% (3.8%)

Customer Referral5.1% (5.0%)

Safety Education/Incentives

3.4% (2.9%) Marketing Research1.2% (1.5%)

Public Relations5.7% (5.1%)

New Customer/Account

Generation4.9% (5.2%)

New Product/ServiceIntroducion 5.0% (5.3%)

Employee Service Awards

7.3% (6.5%)Trade Shows8.0% (7.7%)

Brand Awareness7.9% (8.6%)

Internal Promotions7.6% (8.4%)

Employee Relations & Events

11.4% (11.2%)

Dealer/Distributor Programs

11.6% (11.7%)

Business Gifts14.7% (15.2%)

Advantages of Using Promotional Advantages of Using Promotional ProductsProducts

Flexible Flexible Tangible and long-lastingTangible and long-lasting Impact easily measured Impact easily measured Higher perceived valueHigher perceived value Complements targeted marketingComplements targeted marketing Complements other advertising mediaComplements other advertising media

SECTION CSECTION C

CASE STUDIESCASE STUDIES

Clients Respond to Business GiftsClients Respond to Business Gifts

A 1998 study by Wayne State University A 1998 study by Wayne State University demonstrated that business gifts not only improved demonstrated that business gifts not only improved sales but also sales but also customer attitudes.customer attitudes.

Results were compared among three groups: Results were compared among three groups: a) The letter Group -a group that received a a) The letter Group -a group that received a letter of thanks letter of thanks b) The Silver Group - those that received a b) The Silver Group - those that received a letter plus a silver desk set (a $20 value)letter plus a silver desk set (a $20 value) c) The Gold Group - those that received a c) The Gold Group - those that received a letter plus a gold desk set (A $40 valueletter plus a gold desk set (A $40 value))

Clients Respond to Business GiftsClients Respond to Business Gifts

3.02.8 3.6

3.7 4.2

4.7

0.00.5

1.01.52.02.5

3.03.54.0

4.55.0

Letter Letter+Silver Gift Letter + Gold Gift

SatisfactionIntent to Buy

1 = very dissatisfied/very unlikely to buy and 7 = very satisfied/very likely to buy

Trade ShowsTrade Shows

To promote traffic at its booth, an exhibitor sent To promote traffic at its booth, an exhibitor sent invitations to 4900 trade show registrants. invitations to 4900 trade show registrants. Registrants were further broken down into Registrants were further broken down into smaller groups, each of which received from zero smaller groups, each of which received from zero to three gifts(before, at, and/or after the show).to three gifts(before, at, and/or after the show).

The researchers measured booth traffic, post-The researchers measured booth traffic, post-show memory of having received the invitation show memory of having received the invitation and goodwill toward the company.and goodwill toward the company.

1991 Study by Exhibit Surveys, Inc

Trade ShowsTrade ShowsBooth Visitation RatesBooth Visitation Rates

11.6%

4.2%

0%

5%

10%

15%

20%

25%

Product + Offer for MatchingIncentive at Show

Invitation Only

176%

Increase

The use of promotional products in this study The use of promotional products in this study increased:increased:

Booth visitation Booth visitation

Remembrance of the invitation Remembrance of the invitation

Feelings of goodwill Feelings of goodwill

Improve Direct Mail Response Rates with Improve Direct Mail Response Rates with Promotional ProductsPromotional Products

The use of promotional products in conjunction The use of promotional products in conjunction with a sales letter can make a significant with a sales letter can make a significant difference in direct mail response rates.difference in direct mail response rates.

The use of promotional products can also The use of promotional products can also improve a business’ effectiveness in converting improve a business’ effectiveness in converting leads to sales appointments.leads to sales appointments.

FindingsFindings

1.8% 2.7%

7.3%

-1%

1%

3%

5%

7%

9%

11%

13%

15%

Sales Letter Letter &Promotional

Product

Letter plus offerof Promotional

Product Incentive

* In terms of appointments secured

Source: 1992 study by Silver Marketing Group

The inclusion of a Promotional Product to a mail The inclusion of a Promotional Product to a mail promotion increased the response rate by 50% promotion increased the response rate by 50%

The use of Promotional Products as an incentive The use of Promotional Products as an incentive to respond generated four times as many to respond generated four times as many responses as a sales letter alone responses as a sales letter alone

The use of a Promotional Product as an incentive The use of a Promotional Product as an incentive to respond reduced the cost per response by two- to respond reduced the cost per response by two- thirds. thirds.

Repeat BusinessRepeat Business

New customers who receive promotional products, on New customers who receive promotional products, on average, return sooner and more frequently, and spend average, return sooner and more frequently, and spend more money than new customers who receive coupons. In more money than new customers who receive coupons. In two separate studies, SMU researchers tested whether two separate studies, SMU researchers tested whether promotional products would outperform coupons in the promotional products would outperform coupons in the area of repeat business and sales. Promotional product area of repeat business and sales. Promotional product recipients spent 27% more than coupon recipients and 139% recipients spent 27% more than coupon recipients and 139% more than welcome letter recipients over an 8-month period.more than welcome letter recipients over an 8-month period.

Promotional product recipients were also 49% more likely Promotional product recipients were also 49% more likely than coupon recipients and 75% more likely than letter than coupon recipients and 75% more likely than letter recipients to return and patronize the business in each of recipients to return and patronize the business in each of the eight months studied.the eight months studied.

Total 8-Month SpendingTotal 8-Month Spending

$219

$173

$92

$0

$50

$100

$150

$200

$250

PromotionalProduct

Coupon Sales Letter

Employee Awards and IncentivesEmployee Awards and Incentives

In 1994 Baylor University randomly surveyed In 1994 Baylor University randomly surveyed 1.500 people, asking their opinions regarding 1.500 people, asking their opinions regarding employee awards and incentives.employee awards and incentives.

Survey recipients were asked to rate how Survey recipients were asked to rate how most employees felt about awards and most employees felt about awards and incentives. incentives.

The survey found that:The survey found that:– Employees like awards and incentivesEmployees like awards and incentives– Employees are motivated to win awardsEmployees are motivated to win awards– Employees work hard to win awardsEmployees work hard to win awards– Employees encourage their coworkers to Employees encourage their coworkers to

work toward awards and incentives.work toward awards and incentives.

Motivating through IncentivesMotivating through Incentives A 1999 survey by the Incentive Federation Inc., A 1999 survey by the Incentive Federation Inc.,

revealed that incentive programs are both highly revealed that incentive programs are both highly effective as well as cost efficient.effective as well as cost efficient.

The survey was sent to 4,000 executives in a cross The survey was sent to 4,000 executives in a cross section of American Companies. Respondents section of American Companies. Respondents were current users of merchandise and travel were current users of merchandise and travel items for motivation/incentive applicationsitems for motivation/incentive applications ..

The study revealed that American The study revealed that American businesses spend businesses spend $23 billion$23 billion annually on annually on merchandise and travel for motivational use.merchandise and travel for motivational use.

How Incentives are UsedHow Incentives are Used

82%

66%61%

48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Sales Incentives Consumer/ UserPromotions

Non-SalesRecognition/ Motivation

Dealer Incentives

Source: 1999 Incentive Federation Study

Percentage of Incentive Programs Percentage of Incentive Programs that Achieve Established Goalsthat Achieve Established Goals

83.10%83.70%

88.30%

80.00%

81.00%

82.00%

83.00%

84.00%

85.00%

86.00%

87.00%

88.00%

89.00%

Dealer Programs Consumer/ User Programs Sales Programs

Source :1999 Incentive Federation Study

Generate Customer Referrals Using Generate Customer Referrals Using Promotional ProductsPromotional Products

A 1993 study by Baylor University found that A 1993 study by Baylor University found that customers who receive promotional products are customers who receive promotional products are more willing to provide leads than customers more willing to provide leads than customers who don’t receive promotional products.who don’t receive promotional products.

Twenty Mary Kay consultants participated in a Twenty Mary Kay consultants participated in a study where half of them distributed promotional study where half of them distributed promotional gifts to customers and the other ten offered no gifts to customers and the other ten offered no promotional items to their customers. Both promotional items to their customers. Both groups then asked customers (200 in all) to refer groups then asked customers (200 in all) to refer names of acquaintances.names of acquaintances.

FindingsFindings

44%

13.3%

35.8%

11.7%

0%5%

10%15%20%25%30%35%40%45%50%

Referrals PerSalesperson

Number ofCustomers giving

Referrals

Gift

No Gift

Source:1993 Baylor University Study

Customers who received a promotional Customers who received a promotional product were 14% more likely to provide leads product were 14% more likely to provide leads than those who did not than those who did not

Sales people who gave promotional gifts to Sales people who gave promotional gifts to their customers received 22% more referrals their customers received 22% more referrals than sales people who did not use promotional than sales people who did not use promotional products products

40% of the salespeople who used gifts 40% of the salespeople who used gifts commented on how well the gifts were commented on how well the gifts were received by their customers received by their customers

Build Customer Goodwill with Promotional Build Customer Goodwill with Promotional ProductsProducts

Promotional products foster customer goodwill Promotional products foster customer goodwill toward a company and its salespeople.toward a company and its salespeople.

A 1992 study by Baylor University, involved a A 1992 study by Baylor University, involved a textbook publisher sending 4000 educators textbook publisher sending 4000 educators either: 1) a pocket calculator plus a letter, 2) a either: 1) a pocket calculator plus a letter, 2) a lower priced highlighter pen plus a letter or 3) a lower priced highlighter pen plus a letter or 3) a letter only.letter only.

FindingsFindings

Feelings of Goodwill Feelings of Goodwill Toward Company and Sales RepresentativeToward Company and Sales Representative

3.222.72

2.12

0

1

2

3

4

5

6

More ExpensiveGift (Calculator)

Less ExpensiveGift (Highlighter)

Sales Letter

Scale: 1=negative/6=positive

Source:1992 Baylor University Study

The use of promotional products in this study resultedThe use of promotional products in this study resulted

in:in:

An increase in feelings of goodwill toward the An increase in feelings of goodwill toward the company and its salespeople company and its salespeople

A more positive attitude among those who received A more positive attitude among those who received the calculator than for those who received the less the calculator than for those who received the less expensive highlighter penexpensive highlighter pen

On questions relating to the customers’ personal On questions relating to the customers’ personal feelings toward the company and its sales feelings toward the company and its sales representatives, customers who received the representatives, customers who received the calculator scored 52% higher than the letter only calculator scored 52% higher than the letter only group.group.

Dimensional MailingsDimensional Mailings

The The packaging of promotional productspackaging of promotional products can evoke can evoke curiosity as well as an increase in direct mail response curiosity as well as an increase in direct mail response rates. A 1993 Baylor University study revealed that the use rates. A 1993 Baylor University study revealed that the use of dimensional mailers can significantly improve response of dimensional mailers can significantly improve response rates over direct mail alone.rates over direct mail alone.

For this study 3000 school administrators were divided For this study 3000 school administrators were divided into three groups and received either: 1) sales letter and into three groups and received either: 1) sales letter and sales literature, 2) sales letter, literature and a promotional sales literature, 2) sales letter, literature and a promotional product, 3) the sales letter, sales literature and promotional product, 3) the sales letter, sales literature and promotional

product but delivered in a box with a die-cutproduct but delivered in a box with a die-cut slot.slot.

1.9% 2.1%

3.3%

0%

1%

2%

3%

4%

5%

Sales Letter Letter andPromotional

Product

Letter,PromotionalProduct &

DimensionalPackaging

Dimensional Direct Mail Response Rates

Source:1993 Baylor University Study

Improve Response Rates to an Advertising Improve Response Rates to an Advertising Campaign With Promotional Product MailingsCampaign With Promotional Product Mailings

In a 1996 study PPAI helped a national tile distributor In a 1996 study PPAI helped a national tile distributor integrate the use of direct mail and promotional integrate the use of direct mail and promotional

products into a print advertising campaign.products into a print advertising campaign.

One group of subscribers received only the trade ad.One group of subscribers received only the trade ad.

Other groups received a sales letter, a promotional Other groups received a sales letter, a promotional product, or a promotional product incentive along with product, or a promotional product incentive along with

the trade ad.the trade ad.

FindingsFindings

.70%

2.30%

4.20%

9.55%

0%1%2%3%4%5%6%7%8%9%

10%

Trade Ad Ad+Letter Ad+ Stress Ball Ad + CalculatorIncentive

Source: 1996 study by Dallas Marketing Group

SECTION DSECTION D

CONCLUSIONCONCLUSION

The value of Promotional Products is in their ability to The value of Promotional Products is in their ability to carry a message to a well-defined audience. Because carry a message to a well-defined audience. Because the products are useful to and appreciated by the the products are useful to and appreciated by the recipients, they are retained and used, repeating the recipients, they are retained and used, repeating the imprinted message many times without added cost to imprinted message many times without added cost to the advertiser.the advertiser.

The information contained within this presentation will The information contained within this presentation will provide a greater knowledge of promotional products, provide a greater knowledge of promotional products, the industry and its applications.the industry and its applications.

This information has been made This information has been made available to you courtesy of available to you courtesy of

Promotional Products Promotional Products Association InternationalAssociation International

For more Information contact: PPAI, 3125 Skyway Circle For more Information contact: PPAI, 3125 Skyway Circle North, Irving, Texas 75038 North, Irving, Texas 75038

www.ppa.orgwww.ppa.org UPIC: PPAI UPIC: PPAI