1. The Power of Promotional Products Promotional Products Association International

2. Table Of Contents Section A: Industry Information and Statistics Section B: Applications of Promotional Products Section C: Case Studies Section D: Conclusion

3. SECTION A INDUSTRY INFORMATION AND STATISTICS

4. Items used to promote a product, service or company program, including advertising specialties, premiums, incentives, business gifts, awards, prizes, commemoratives and other imprinted or decorated items. What are Promotional Products?

5. . How big is the Promotional Products Industry? $16,552,291,971 Source: The PPAI 2001 Sales Volume Estimate

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

8. Top Ten Selling Individual Products n 1. Pens n 2. Mugs and Cups n 3. Golf/Polo Shirts n 4. T-shirts n 5. Caps/Hats n 6. Calendars n 7. Jackets n 8. Key Tags/Rings n 9. Tote Bags n 10. Mouse Pads n ( These results are based on responses from a representative sample of distributors in a survey conducted exclusively for PPAI by University of Southern Mississippi.)

9. Top Buyers of Promotional Products by Industry 1. Financial 1. Financial 2. Health Care 2. Health Care 3. Not-For-Profits 3. Not-For-Profits 4. Education 4. Education 5. Manufacturers (unspecified) 5. Manufacturers (unspecified) 6. Insurance 6. Insurance 7. Automotive 7. Automotive 8. Government 8. Government 9. Entertainment and Sporting Events 9. Entertainment and Sporting Events 10. Media 10. Media 2000 Top Buyers Study by PPAI

10. Buyer Trends In a 1998 study of 839 business people: n 95% use promotional products n 30% increased their promotional product budget this year n 72% use distributors n Quality of ideas rated #1 factor in selecting a distributor n 42% of respondents rated price as the #2 factor in selecting a distributor

11. SECTION B APPLICATIONS OF PROMOTIONAL PRODUCTS

13. Advantages of Using Promotional Products 4 Flexible 4 Tangible and long-lasting 4 Impact easily measured 4 Higher perceived value 4 Complements targeted marketing 4 Complements other advertising media

14. SECTION C CASE STUDIES

15. Clients Respond to Business Gifts A 1998 study by Wayne State University demonstrated that business gifts not only improved sales but also customer attitudes. A 1998 study by Wayne State University demonstrated that business gifts not only improved sales but also 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 value ) letter plus a gold desk set (A $40 value )

16. Clients Respond to Business Gifts 1 = very dissatisfied/very unlikely to buy and 7 = very satisfied/very likely to buy

17. Trade Shows n To promote traffic at its booth, an exhibitor sent invitations to 4900 trade show registrants. Registrants were further broken down into smaller groups, each of which received from zero to three gifts(before, at, and/or after the show). n The researchers measured booth traffic, post- show memory of having received the invitation and goodwill toward the company.

18. 1991 Study by Exhibit Surveys, Inc Trade Shows Booth Visitation Rates 176% Increase

19. The use of promotional products in this study increased: Booth visitation Remembrance of the invitation Feelings of goodwill

20. Improve Direct Mail Response Rates with Promotional Products n The use of promotional products in conjunction with a sales letter can make a significant difference in direct mail response rates. n The use of promotional products can also improve a business effectiveness in converting leads to sales appointments.

21. Findings * In terms of appointments secured Source: 1992 study by Silver Marketing Group

22. The inclusion of a Promotional Product to a mail promotion increased the response rate by 50% The use of Promotional Products as an incentive to respond generated four times as many responses as a sales letter alone The use of a Promotional Product as an incentive to respond reduced the cost per response by two- thirds. The inclusion of a Promotional Product to a mail promotion increased the response rate by 50% The use of Promotional Products as an incentive to respond generated four times as many responses as a sales letter alone The use of a Promotional Product as an incentive to respond reduced the cost per response by two- thirds.

23. Repeat Business n New customers who receive promotional products, on average, return sooner and more frequently, and spend more money than new customers who receive coupons. In two separate studies, SMU researchers tested whether promotional products would outperform coupons in the area of repeat business and sales. Promotional product recipients spent 27% more than coupon recipients and 139% more than welcome letter recipients over an 8-month period. n Promotional product recipients were also 49% more likely than coupon recipients and 75% more likely than letter recipients to return and patronize the business in each of the eight months studied.

24. Total 8-Month Spending

25. Employee Awards and Incentives n In 1994 Baylor University randomly surveyed 1.500 people, asking their opinions regarding employee awards and incentives. n Survey recipients were asked to rate how most employees felt about awards and incentives.

26. n The survey found that: –Employees like awards and incentives –Employees are motivated to win awards –Employees work hard to win awards –Employees encourage their coworkers to work toward awards and incentives.

27. Motivating through Incentives l A 1999 survey by the Incentive Federation Inc., revealed that incentive programs are both highly effective as well as cost efficient. l The survey was sent to 4,000 executives in a cross section of American Companies. Respondents were current users of merchandise and travel items for motivation/incentive applications. l The study revealed that American businesses spend $23 billion annually on merchandise and travel for motivational use.

28. How Incentives are Used Source: 1999 Incentive Federation Study

29. Percentage of Incentive Programs that Achieve Established Goals Source :1999 Incentive Federation Study

30. Generate Customer Referrals Using Promotional Products n A 1993 study by Baylor University found that customers who receive promotional products are more willing to provide leads than customers who dont receive promotional products. n Twenty Mary Kay consultants participated in a study where half of them distributed promotional gifts to customers and the other ten offered no promotional items to their customers. Both groups then asked customers (200 in all) to refer names of acquaintances.

31. Findings Source:1993 Baylor University Study

32. Customers who received a promotional product were 14% more likely to provide leads than those who did not Sales people who gave promotional gifts to their customers received 22% more referrals than sales people who did not use promotional products 40% of the salespeople who used gifts commented on how well the gifts were received by their customers Customers who received a promotional product were 14% more likely to provide leads than those who did not Sales people who gave promotional gifts to their customers received 22% more referrals than sales people who did not use promotional products 40% of the salespeople who used gifts commented on how well the gifts were received by their customers

33. Build Customer Goodwill with Promotional Products n Promotional products foster customer goodwill toward a company and its salespeople. n A 1992 study by Baylor University, involved a textbook publisher sending 4000 educators either: 1) a pocket calculator plus a letter, 2) a lower priced highlighter pen plus a letter or 3) a letter only.

34. Findings Feelings of Goodwill Toward Company and Sales Representative Source:1992 Baylor University Study

35. The use of promotional products in this study resulted in: in: l An increase in feelings of goodwill toward the company and its salespeople l A more positive attitude among those who received the calculator than for those who received the less expensive highlighter pen l On questions relating to the customers personal feelings toward the company and its sales representatives, customers who received the calculator scored 52% higher than the letter only group.

36. Dimensional Mailings n The packaging of promotional products can evoke curiosity as well as an increase in direct mail response rates. A 1993 Baylor University study revealed that the use of dimensional mailers can significantly improve response rates over direct mail alone. n For this study 3000 school administrators were divided into three groups and received either: 1) sales letter and sales literature, 2) sales letter, literature and a promotional product, 3) the sales letter, sales literature and promotional product but delivered in a box with a die-cut slot.

37. Dimensional Direct Mail Response Rates Source:1993 Baylor University Study

38. Improve Response Rates to an Advertising Campaign With Promotional Product Mailings In a 1996 study PPAI helped a national tile distributor integrate the use of direct mail and promotional products into a print advertising campaign. One group of subscribers received only the trade ad. Other groups received a sales letter, a promotional product, or a promotional product incentive along with the trade ad.

39. Findings Source: 1996 study by Dallas Marketing Group

40. SECTION D CONCLUSION

41. The value of Promotional Products is in their ability to carry a message to a well-defined audience. Because the products are useful to and appreciated by the recipients, they are retained and used, repeating the imprinted message many times without added cost to the advertiser. The information contained within this presentation will provide a greater knowledge of promotional products, the industry and its applications.

42. This information has been made available to you courtesy of Promotional Products Association International For more Information contact: PPAI, 3125 Skyway Circle North, Irving, Texas 75038 www.ppa.org UPIC: PPAI