The whys and hows of the power of promotional products as a vital ingredient in your strategic marketing mix.

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: Research 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? $19,440,837,547 Source: The PPAI 2007 Sales Volume Estimate

6. Growth of Industry Sales (PPAI Sales Volume Estimates by Year)

7. 2007 SALES BY PRODUCT CATEGORY (2006 Figures in parentheses) Wearables 30.71% (30.78%) Writing Instruments 10.39% (9.95%) Calendars 5.51% (6.47%) Drinkware 6.32% (5.64%) Bags 7.05% (5.81%) Desk/Office/ Business Accessories 6.19% (6.28%) Recognition/Awards/Trophies/Jewelry 3.55% (3.56%) Other 2.32% (2.34%) Textiles 2.25% (2.05%) Sporting Goods 2.57% (2.95%) Magnets 2.37% (2.23%) Housewares 2.35% (2.64%) Computers 3.31% (2.28%) Automotive 2.48% (2.31%) Clocks & Watches 1.62% (1.87%) Buttons/Badges/ Ribbons 1.82% (2.26%) Stickers & Decals 2.07% (2.58%) Electronics 1.69% (1.74%) Games 2.21% (2.49%) Food 1.75% (1.91%) Personal 1.68% (1.86%) Source: 2007 PPAI Product and Program Category Surveys

9. SECTION B APPLICATIONS OF PROMOTIONAL PRODUCTS

10. 2007 SALES BY PROGRAM CATEGORY (2006 in parentheses) Source: 2007 PPAI Product and Program Category Surveys Employee Relations & Events 13.80% (8.46%) Trade Shows 10.68% (11.36%) Brand Awareness 12.84% (8.87%) Dealer Distributor Programs 6.16% (7.73%) Public Relations 7.05% (8.75%) New Customer/Account Generation 9.98% (7.61%) New Product/ Service Introduction 5.78% (5.29%) Employee Service Awards 5.44% (5.43%) Not-For-Profit Programs 8.16% (5.89%) Internal Promotions 6.30% (3.47%) Customer Referral 6.76% (2.33%) Safety Education/Incentive 2.78% (3.04%) Marketing Research 1.53% (1.36%) Other 2.73% (1.84%) Note: (Business Gifts as a category has been eliminated in 2007)

12. SECTION C RESEARCH STUDIES

28. Clients Respond to Business Gifts A study by Wayne State University demonstrated that business gifts not only improved sales but also customer attitudes. Results were compared among three groups: a) The letter Group -a group that received a letter of thanks b) The Silver Group - those that received a letter plus a silver desk set (a $20 value) c) The Gold Group - those that received a letter plus a gold desk set (A $40 value) A 1998 study by Wayne State University

29. Clients Respond to Business Gifts 1 = Very Dissatisfied/Very unlikely to buy and 7 = Very Satisfied/Very likely to buy

30. Trade Shows 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). The researchers measured booth traffic, post-show memory of having received the invitation and goodwill toward the company. A 1991 Study by Exhibit Surveys, Inc

31. Trade Shows Booth Visitation Rates 176% Increase

34. Findings * In terms of appointments secured

36. Repeat Business 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. 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. A 1994 Study by Southern Methodist University

37. Total 8-Month Spending

38. Employee Awards and Incentives In 1994 Baylor University randomly surveyed 1,500 people, asking their opinions regarding employee awards and incentives. Survey recipients were asked to rate how most employees felt about awards and incentives. A 1994 Study by Baylor University

41. How Incentives are Used

42. Percentage of Incentive Programs that Achieve Established Goals

43. Generate Customer Referrals Using Promotional Products A 1993 study by Baylor University found that customers who receive promotional products are more willing to provide leads than customers who don’t receive promotional products. 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. A 1993 Study by Baylor University

44. Findings

47. Feelings of Goodwill Toward Company and Sales Representative

50. Dimensional Direct Mail Response Rates

51. 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. 1996 study by Dallas Marketing Group

52. Findings

53. SECTION D CONCLUSION

54. 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.

55. This information has been made available to you courtesy of Promotional Products Association International and Dynamic Image Marketing Systems, Inc. For more Information contact: Dynamic Image Marketing Systems, Inc 1465 Sand Hill Rd Ste 1017 Candler, NC 28715 828.687.1893 - www.dynamicimage.biz