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COMPANIES SEE ITEMS AS GOOD MARKETING TOOLS
Trade Show Underscores Boom In Promotional Items
From Promotional Products Association International.
The exhibitors at the Promotional Products Association International trade show at America's Center have enough refrigerator magnets on display to cover every Frigidaire, General Electric and Amana at an appliance super center.
But the higher-end merchandise at the show, which brings together 5,000 manufacturers and distributors of promotional products, explains why the industry posted double-digit sales gains the past few years.
For every magnet or plastic pen, exhibitors offered fresher more distinctive items - like wind chimes decorated with company logos, or beveled acrylic trophies for use as employee or customer awards.
Sales of all such merchandise jumped 25 percent last year to $11.9 billion, the Promotional Products Association International says.
"e;More and more companies are seeing the value of promotional products as a marketing medium,"e; said Stephen Slagle, the group's president.
The gains are attributable both to higher volume and to higher prices.
"e;People want bigger, more expensive things,"e; said John Dickerson of Zeit Co. of Salt Lake City, a maker of acrylic awards. When Zeit got into the industry nine years ago, the average selling price for its awards was $10 to $15, Dickerson said. Today, the figure is $30 to $40, he said.
Business gifts account for more of the promotions market these days, and cheap giveaway items account for less.
About 1,250 exhibitors are showing off merchandise at the St. Louis show, which runs through Saturday. The organizers estimate that 15,000 different items are on display.
Shirts, caps and other "e;wearables"e; account for 24 percent of the industry's sales. Writing instruments have the second biggest share of the market (11.9 percent), followed by glassware and ceramics (9.4 percent), calendars (7.7 percent) and recognition awards (6.4 percent).
The top purchasers of promotional goods, according to a Baylor University study, are health care organizations-hospitals nursing homes and clinics.
Next come financial institutions, nonprofit groups, insurance companies, trade and professional groups, general manufacturers and utilities.
The market for promotional products has expanded again this year, Slagle said, although he declined to say how close the growth would come to last year's mark. "e;I think it will be double-digit again,"e; he said. "e;The industry seems to be on a real upward trend."e;
Sales have surged in part because more companies are entering the business, especially on the distributing end, Slagle said. Distributing promotional products is ideal for women who want to divide their time between business and family, he said.
"e;It's low capital investment and you can work from home,"e; he said, noting that many companies market their goods over the Internet. "e;You can have a virtual office."e; The end users of promotional products are diverting more of their marketing money to the medium because they see new ways to target specific audiences with specific messages, Slagle said.
Manufacturers of promotional products have kept their merchandise from getting stale by offering style updates, and by improving the materials, lettering or other applications, Slagle said.
Some companies, like Senator Pen Corp. of Greensboro, N.C., also are broadening their product lines and using technology to reduce or hold down costs. "e;We've got pens from 33 cents on up to $500,"e; said Stephanie Keen West Coast sales manager.
Senator added a metal pen line this year to give customers more options, Keen said. The company also is promoting its new computerized laser system that can etch four sides of a pen at once, without costly resetting, she said. "e;That's a big thing for people in the industry, because every time you want another location, it's another 30 cents,"e; she said.
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