The Role of Promotional Products in Future Marketing

Marketing has evolved over the decades. If we lookat latest marketing methods, it has moved from traditional advertisements especially on digital media such as TV, print media etc. and moved to more reward based mediums such as promotional products and referral schemes. Various studies have shown that promotional gifts shows great result and as impactful as traditional word of mouth. It even exceeds the efficiency of other marketing methods such as advertisements, customer reviews and online generated word of mouth. Word of mouth builds over an extended period of time and it requires initial adopters of the product called innovators to use and disperse their reviews to other people. Sometimes, negative word of mouth gets generated which can hamper the adoption rate of any product which is a nightmarish scenario for any company. To mitigate this situation, promotional giveaways actas a great medium to generate counter active positive word of mouth as well as increasing initial adoption of the product by the people to propel the growth and dispersion of the product in the market.

The reward mechanism inculcated in advertising gifts provide a greater push to decision making of the prospective customer to buy a certain product. If we look at recent studies on customer behaviour, promotional products offer necessary impact on the decision threshold of the customer and when it is crossed, the customer purchase the product. Many big brands have understood the effectiveness of this phenomenal marketing strategy and has added it to their marketing campaigns.

The Study

Large corporates and companies spend a significant portion of their entire marketing budget, nearly one-third, on promotional products. This is due to their in-depth marketing research under taken indifferent demographics and consumer spectrum which revealed that reward based promotional gifts leaves a greater impact on the customers, driving them to purchase products of these companies. These companies spend over 6-30% of their total marketing budget on promotional products due to the fact that these products help them in increasing their brand awareness, reinforcing their brand value among the customers, establishing better connection, positive and mutually beneficial relationship with the customers as well as getting an edge over their competitors. Considering the impact of rewarding the customers, corporate gifts have become the most popular purpose of these promotional products followed by offset printed materials and event merchandise. Corporate gifts are also used by these companies for employee motivation.

If we look at SMEs, at present they are investing only a small fraction of their total marketing budget on promotional goods, mere 6%, which is expected to rise to 33%. This change in strategy is due to their recent findings which reflected that promotional products help them inconnecting with the customers. It also helps them in increasing their awareness among potential customers. It also increases brand loyalty among the customers which results in repeat purchases as well as make them stand out of their competitors. Unlike large corporates, SMEs use promotional products like offset printed material such as postures, signs and even corporate gifts. It is essentially due to the fact that they have relatively smaller marketing budget and they look for better ROI. All these factors points to the emerging trend of increase in total expenditure by SMEs on promotional products which is going to rise in upcoming years.  APPA study

It is found that most of the promotional products are sourced through preferred or existing suppliers of the product. This help in reaching out to more prospective customers and increasing the awareness of the product in the market. Online advertising and referral from friends channels are less used by the companies, relatively. This shows the growing trend of using promotional products by not only large corporates but also by SMEs and even Not-for-Profit organizations.

Example

Among the promotional products, corporate gifts are mostly used by the companies as most effective medium. These gifts appeal the reward mechanism of the person driving him to try out and buy the product offered by the companies. Corporate and event merchandise along with off-set printed merchandise such as brochures, posters, signs etc. are also used by the companies in equal fashion. Employee motivation and incentive programs are relatively used at lesser amount followed by gifts with purchase. However, these latter forms of promotional products does deliver good ROI especially for the companies who have restricted marketing budget.

Another key aspect of growing importance of promotional products as marketing medium is that most of the people remember the name of the company which offer them a promotional product. A great advertising gift becomes a constant reminder of a company’s brand, everytime it is used. For instance, if a company offers its branded coffee mug, every time the consumer uses it, he is reminded of the company. It not only increases customer loyalty but also improves customer relations of the company which creates a personal connection between the customer and the company. By means of including contact details, a company can generate more leads from new customers as these promotional products act as business card. A useful promotional product also helps a company in localising and customizing its brand message. A company can add an attractive logo or design to its promotional gift which increases the perceived value as well as desirability of the product to any particular audience. This helps in creating more brand awareness among the potential customers.

Another major reason why companies are shifting from discounting their product to offering promotional products such as free gift item is that a branded gift item is generally less costly than monetary discount but it is perceived as more worth, monetary wise, by the customer. For example, instead of offering 10% discount on any item which essentially converts to a certain amount of monetary value, a promotional gift which is worth lesser than that amount leaves a better impact on the customer as well as act as constant reminder to the customer which may result in repeat purchase.It also enhances the brand value of the company in the customer’s mind. Also, understanding the customer’s behavioural trait that dictates that free gifts are additional product that they got from purchase of any particular product from a company, which creates a feeling of getting rewarded by purchasing the product. This results in positive impact on feedback mechanism of the customer’s mind creating favourable feeling towards the company especially when they think about the brand again in the future.

Conclusion

All these factors make promotional products as one of the best way of marketing a product as well as generating more brand awareness, better customer relations, increasing repeat purchases, etc. which makes it the future of marketing.