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Branding counts from mugs to steak knives - Australian Financial Review

5th November 2015
Branding counts from mugs to steak knives - Australian Financial Review Corporate gifts and promotional products have become a bigger part of the marketing mix as more companies look for new methods to boost sales and customer loyalty.

The Australasian Promotional Products Association says the promotional products industry in Australia generated sales of $2.02 billion in 2006, up 30 per cenl up on the revenues it generated in 2003.

These figures cover corporate gifts and consumer "gift with purchase" products and include spending on items from baseball caps and coffee mugs imprinted with a corporate name to dearer types of apparel and computer technology items.

APPA chief executive officer William Kestin says promotional products have been steadily taking market share from other types of marketing, such as direct mail and advertising, since 2000.

"Promotional products are now a full alternative to other types of marketing like direct mail, and larger corporates are increasing their spending on promotional products" Kestin says.

A key factor is longevity of use of products, which makes many companies view expenditure on these products as cost effective.
Kestin says 71 per cent of business travellers surveyed recently at Sydney Airport reported having received a promotional product in the last 12 months.

"Moreover, 33.7 per cent of this group had the item on their person," he says. "The item was promoting the giver's logo repeatedly to the participant and their associates. The survey also found that 55 per cent of people kept their promotional product for more than one year, and 75.4 per cent said they kept their promotional product because it was useful" Many companies now consider promotional products in the early stages of developing a marketing campaign and will closely integrate the products with advertising and direct mail strategies.

Companies organising promotional marketing pieces on a regular basis to go with a direct marketing campaign are aware that the higher volume runs must include a three to four month production period to be able to produce a cost effective and completely customised product.

"(Marketing) people also allow time prior to this to develop and select a product and to be clever in their approach to a campaign so the product carries the message once the literature is thrown away.

Those marketers who leave little time to organise such campaigns can expect to almost double their cosis. You'll be able to pick them a mile away as they are the ones who will end up resorting to the mugs and pens.

With the growth in business-to-business marketing, there has been increased expenditure on expensive gift items, such as CD players, computer memory sticks and golfwear and accessories.

The product staples of the industry are caps and apparel, which make up 27 per cent of industry sales, according to APPA. The next most popular items are writing instruments, followed by
office and other business accessories.

Promotional product firms argue that the industry is benefiting from a climate in which advertisers are taking a critical look at advertising expenditure and returns.

Operators say the better the quality of a promotional product, the longer it lasts and the more desirable it is to use. This makes cost per exposure diminish over time unlike the fixed exposure cost of advertising and direct mail.

Chris Tolhurst
Excerpt From The Australlan Flnanclal Review,  Thursday 8 February 2007 BUSINESS INCENTIVES SPECIAL REPORT
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