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Managing Marketing: Branded Merchandise, Product Safety and Supply Chain Ethics

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Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Adrian Davidson is the Managing Director of Inck Merchandise and a National Board Member of the Australasian Promotional Products Association (APPA). Adrian shares the significant risks associated with Branded Merchandise and Promotions Products in regards to safety and supply chain compliance. Yet often there is significant financial pressure to cutting-corners to achieve the cheapest possible outcomes, putting the brand reputation and the organisation at risk.

You can download the Ultimate Guide to Promotional Product Safety here.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.

Today I’m sitting down again with Adrian Davidson, managing director of Ink Merchandise and national board member of APPA which is the Australasian Promotional Products Association, Welcome Adrian.

Adrian:

Thank you Darren for the invitation to talk to you.

Darren:

Well look I just feel like I am slumming it because Promotion Products, isn’t this the trinks and tricks of marketing? Haven’t we slid down from the high-end strategy to the gifts that are given out to people to make them buy products?

Adrian:

The trinkets and trash, luckily you’ve only done it for 45 minutes, I’ve done it for my whole career. I started my career in advertising in London and now I work in the industry so it’s probably a bigger problem for me but in terms of perceptions, yes, I think we have.

Darren:

So from my perspective in an agency, everyone’s focus use to be the TV ads, now it’s the big digital idea or the App or something like that and then almost as an afterthought is promotional items.

However, there are certain categories that seem to spend a lot more time and effort getting that part right. Why do you think that is? And look I’ll pick alcoholic beverages as one because I know everything from Eskis to drink coasters to whatever, what is it about promotional items, I think you said to me you prefer to call them branded merchandise?

Adrian:

I prefer to call them branded merchandise mainly for two reasons. The first one is to avoid the embarrassing start to this podcast because I think there is a negative connotation and as an industry, I think we have ourselves to blame.

The moment you mention promotional products, particularly to a marketing person they think of being hounded each week from promotional companies just trying to sell them stuff.

And then the second thing is that it is a lot bigger than just promo products. So branded merchandise is a product that’s branded so that could actually be a niche retail product; it could be a licensed product so I think it is just a better description of the industry.

Darren:

Okay so we are not just talking about the junk are we, because when you talk about branded merchandise it actually could be quite sophisticated or even quite valuable, can’t it?

Adrian:

Absolutely but sadly we probably are talking about a lot of junk, we have got to be real. It is like the 80/20 rule with everything, if you look at a standard promotional product where it is used tactilely, where it’s bought cheaply; there is a lot of junk out there.

That’s an issue worth discussion and the problem is that situation is getting worse as the world opens up. It is very easy to buy stuff from a China factory direct however there are some fantastic examples when you peel back the onion of branded merchandise that perhaps are brilliantly executed and they are not just cheap giveaways.

Darren:

I think McDonald’s and the happy meals and the little plastic toys that they use to produce by the tonne, I’m sure there were absolute containers coming straight out of China with these little plastic toys to give away with every happy meal.

And yet there was so much controversy especially from a group of consumers saying this is just basically landfill, isn’t it? A lot of these small toys for kids just end up being thrown in the trash.

Adrian:

They do and that’s an issue and you can’t escape the fact that that is the case so I find it interesting that has been the situation for a long long time.

The thing that excites me is that it is bringing promotional products and that to the forefront, maybe a little uncomfortably but it’s like anything if it is not adding value and if it’s not working and if it is causing harm it shouldn’t be swept under the carpet.

What fascinates me is an example like Coles little shop.

Darren:

Well, that was another one that copped a huge amount of backlash.

Adrian:

So you have to ask why a multibillion-dollar company would take that risk. Coles, we work with them to a certain extent but they must just have a leading PR agency that would know where their brand sits and the sort of activities they should do to protect that brand and yet they still went ahead with that. It suggests that as a marketing technique, worked.

Darren:

I think if I remember rightly the first round worked really well. It actually drove incremental sales and an increase in basket size. If you remember rightly the mechanism was you had to spend a minimum amount to actually get your collectible item.

Adrian:

I think it was $30.

Darren:

So then the second one was the one that had the backlash because maybe it was as much the danger they were going to start relying on this. This obvious consumption was going to be the only way Coles was going to rely on driving sales and maybe that was the mechanism that got people’s backs up.

Adrian:

I think it was. I think the biggest thing was the timing because it came around the time they banned single-use plastic bags.

So with the second program and obviously with a program of that scale, I’m guessing that the sort of quantities that would be distributed would be in the tens of millions. I’m guessing that’s probably a 50 or 60 million dollar investment from Coles’ perspective and then you’ve got to look at all the product and line extensions that go with that.

So yeah there’s no denying as an industry and when you look at the scale, there are some significant issues that need to be addressed.

Darren:

There’s also a perception and I want you to tell me if this isn’t wrong, that there isn’t a lot strategy and creativity in the promotions or branded merchandise. That all the creative thinking is happening further up in the creative agency or whatever, but in actual fact is that right or wrong?

Adrian:

I think it’s right mainly because of the reality of the situation. We’ve been very fortunate enough to be involved in a couple of projects where we’ve been briefed early in the piece by the innovation team or by an agency.

You speak to a lot of very high-level marketers and procurement teams and agencies the whole time. I don’t think you often hear them say well the most important step is to get our branded merchandise or our promotion product supplier at the table on day one.

I think by definition at such time that a promotional product or give away is part of the tactic or part of the campaign, that’s the time we generally join the table and we are always very excited to be at the table at that stage. So you are right, there’s not a lot of strategic thinking.

I looked up the term strategic merchandise marketing which is trying to encourage people to be strategic in the area and merchandise marketing. It doesn’t actually exist on Wikipedia, there’s no content and funnily enough I looked up books on promotion marketing and there was I think one published in 1975 and the next follow up book is in the late 80’s so it’s not a highly sought after area.

Darren:

So it’s a category that is ripe for disruption isn’t it for those practitioners that put the extra mile in?

Adrian :

It is. I’ve got a confession, I probably shouldn’t admit this but I’ve always said the day the investment bankers get involved in our industry we are dead. It’s not being insulting but if you get really smart people and as I said a couple of times a year we get in a room with the planners with the strategic agencies on a big program and it’s just brilliant. When you’ve got sharps minds in this space you can get great results.

Darren:

I think one of the things when you get a piece of branded merchandise that is relevant and yet unexpected, it really has an impact. Like pens, branded pens are like that commodity that so many businesses send out with their logo or their brand on it.

It’s like that just becomes another of hundreds of pens that I get given. It’s finding that thing that is so relevant and yet unexpected and you must see this, it comes in fashions.

Remember when keep cups were suddenly the thing that everyone had.

Adrian:

Yeah and I think that is current at the moment so you are right the traditional promotional products, again looking at the Pareto principle and the 80/20, I don’t know if we are ever going to escape the 80% of products that are shoved out there.

I would say almost exclusively it is done tactically, also it’s expensive. To have a digital impression compared to giving someone a physical product and it’s not just the product; it is actually distributing it as well so I can understand why people go for a cheap cost-effective option. Sadly you can buy a pen for as little as 20 or 30 cents so there are some harsh realities.

Darren:

So you bring up an interesting point there because it is largely tactical because it’s often not at the lead of the strategy. Does that explain why often budgets and pricing are under so much pressure in this category?

Adrian :

I would say so because when you are giving away a physical product, often to promote a physical product it is just a potentially high-cost thing as part of the budget, particularly when you are wanting to build awareness and get reach. For example, we do a lot of activations at major events. Let’s say the Australian open or a state of origin game and you want to turn the stadium maroon or blue you are talking tens of thousands of something to give away. So if it’s $1 it is going to cost you $50,000 or $60,000, if it’s 30 cents it is going to cost you $20,000, so there are some physical constraints around that which do drive the price conversation for sure, quite naturally.

Darren:

Because one of the issues would have to be balancing the budget with safety, wouldn’t it?

Adrian:

I think that’s the biggest single issue that we face at the moment because before we started this podcast we were chatting about kids pyjamas as an example. One thing we say is that products might look the same, take pens or take pyjamas, you can pretty much put two visibly identical products on the table yet one of them could destroy your brand or reputation or even cause physical harm or death and the other one could be completely safe.

From an environmental point of view one of them could last ten months and the other one last ten years, so this is what fascinates me and it’s what keeps me working in the industry because on the surface its trinkets and trash and I actually love it and I like when you see that level of ignorance or that lack of interest in what I do, I don’t spend a lot of time, but I find it quite amusing because for me every day I get inspired and engaged in actually how much depth there is in the big thing.

For us, we have the product safety on the product side but the big issue is the people side and where they are made and getting down into tier one, tier two, tier three supply chains.

Darren:

You are absolutely right. So much time and effort go into making the TV ad or the outdoor sight which has got the brand on it but you’re working in a category where an advertiser is choosing a product, putting their name on it and almost handing it as a gift to their customers and potential customers.

You are telling me it is often under very tight cost control or a desire to make it as cheap as possible and yet is there consideration for what their residual impression will be from that branded experience. If you give me a gift and it breaks in two weeks or you give me a gift and I hand it to my child and they choke on it or you give me a gift and it somehow fails, what does that say about my brand?

Adrian:

I think you can destroy brands with that. If you give a dangerous, at the upper end of the spectrum, customer experience that suddenly gets the attention of companies.

So going back to where we actually started some brands do this area well. I had a think about this and sadly there are two categories and they might actually be in both. There are the brands that have been burnt and I wouldn’t name names but we have worked very extensively with some global brands and they have actually led us.

So they have done initiatives in their global teams where they have had product recalls or they have had safety issues generally around glass or around kids or whatever. We have worked with those brands often under very difficult conditions because they still treat our area like a commodity.

But the amount of work they have done around compliance and this has also been led from a packaging point of view. Go back twenty years and you could probably stick something in the microwave and all the inks were migrating into the product or if you put it in the freezer, so they realised they should probably have a look at their packaging because of extremes of temperature.

When they finished with the packaging they got on with promotional products because they thought hold on we are giving kids a lunchbox and that’s actually going to be in contact with food or mouth.

Darren:

In your experience what percentage of manufacturing is coming out of China or Asia compared to all other locations?

Adrian :

I would say in our space it is probably over 90%, so those companies who have been burnt have realised their brand reputation is at stake and they have realised that actually they have to look at this space and we have to get it under control.

The second area is, annoying to people this stuff works, so the beer companies and the liquor companies, it’s like heroin to them because once you’ve given away a surfboard or esky and half of those go to the store manager, they can’t stop because there would be a revolt so that’s the two reasons they do them.

I would say a very very high percentage comes out of China, we choose to manufacture in China predominantly but it’s not cheap, it’s a myth that China’s cheap.

Darren:

I think China, like any market you can get things very cheap but they come with corner-cutting or you can get really well-manufactured things but it costs you money to get it well manufactured.

There are so many options in China, aren’t there. So many suppliers, so many manufacturers and you can see very cheap items but they usually don’t come with the same quality. At the same time, Chinese manufacturing can match anyone in the world but it’s not going to be as cheap as the cheapest version is it?

Adrian:

A hundred percent and I think what’s blown me away is going to the Canton Fair regularly, I’m not sure if you’ve been there, which is on pretty much for a month twice a year and I went to the electronics fair a couple of years ago.

We are used to walking around here looking at the brands, you know Apple and Samsung, maybe seeing a couple of brands and I walked into this hall and there would have been 30 or 40 brands which had stands or product ranges which were an Apple or a Samsung.

So again the scale and scope of what is and can be manufactured in China is staggering.

We are dealing with people that want to see the innovation and the creative and the pretty ideas which is generally the marketing teams or the agencies or we are dealing with generally indirect procurement who are more interested in the supply chain and cost etc.

We had a situation a couple of years ago where we were supplying a product, it was quite a large contract, very high profile, it was an annual event and the tender came up because they were a large organisation and they had tenders every few years.

We actually put two prices on the table because we said look we can anticipate what’s going to happen, you have gone out to tender, there are 3 or 4 suppliers and you are going to see samples or this item that we have been supplying and to be honest you are not really going to be able to tell the difference between the two.

We are going to give you pricing from our factory and we have selected this factory and we have worked with them for the last three years without ever having a quality issue etc. etc. and we are going to give you a pricing, we are going to go to the market and give you the cheapest pricing we can get and you choose.

And hats off to them, the lower pricing was more in line with what they were receiving from the market and they ending up sticking with us and actually going with a higher price.

Darren:

This is an area I know is really important to you Adrian and I know Inck have produced guidelines for this around safety. When I was looking through it I saw a great case study for Starbucks. Remember that backlash about plastic straws and Starbucks produced a steel straw didn’t they.

Adrian:

So that’s a good example. We’ve got to be quite strong with our customers because if we are told right we are banning plastic straws, give us an alternative because we must have straws, the way we approach things is we do a risk analysis because who in their right minds would think a straw could cause death so that’s a good example. And because we are putting very large quantities out there, it’s the way we chose to work.

Darren:

The other thing is the implications. We are sitting here talking about this. We are not talking about who designed the metal straw, we are not talking about who fabricated or supplied it. We are not talking about any of that, we are talking about the brand that actually commissioned it and gave it away.

Adrian:

Correct.

Darren:

So ultimately the responsibility as you say sits with the brand because it’s the brand that will suffer the most damage. And yet if you are going to market buying on price you are going to get a supply chain there, every step of it is not necessarily going to be focused on safety, they are going to be focused on delivering to price aren’t they.

Adrian:

A hundred percent and I can absolutely guarantee that when you are buying on price there are going to be issues in the supply chain. So as a standard procedure we basically say we can buy at this price and we have a very strict and methodical buying process.

So even with our existing products that we buy regularly from existing factories, we get 3 to 5 factories who quote. It is quite amazing when we actually do our homework 85% of the time we are not going with the cheapest factory because we have uncovered a reason.

So it’s really simple and I’ve listened to a couple of your podcasts about benchmarking and having low, medium and high. When you do benchmark or when you measure and when you become an expert in your area you smell a rat when you see pricing that is too low and you know the damage and you think well actually this is a red flag and now we are on to a risk management issue.

Darren:

My favorite saying at the moment is, if it is too good to be true it probably is.

Adrian:

It definitely is.

Darren:

Yeah because you don’t get windfalls like that just falling out of the sky.

Adrian:

And that is why I work in this industry. I started my career working for DDB in London in advertising and I moved over to promotional marketing and I had 5 years on the client-side so what got me into the industry was working with Lion-Nathan.

So they realised we are a drinks company and we are spending millions and millions in this area so why don’t we just do it ourselves so we set up an internal business which they then on-sold.

So from working with intangibles and creativity I worked for many years on the agency side, went to the client-side and I use to struggle so much because you look at the remuneration model, we use to have a cost sheet for sales promotions where we’d make margins.

No one ever wanted to pay for creativity or the concept fee so for me what attracted me was actually having a physical product we could sell and we make our margin when we are actually delivering that physical product.

It just fascinates me when you are actually making something just seeing how many elements there are involved and the complexity.

Darren:

Going back to safety, it’s not enough is it just to meet the safety guidelines because in Australia we have very strict safety guidelines and in other countries, they have different guidelines and some have no guidelines at all. But the example of the metal straw for Starbucks, I’ve seen metal straws for sale in Australia, so metal straws are clearly not outside the guidelines in Australia.

Adrian:

It’s funny, we think we have lots of safety guidelines in Australia but it is actually not the case. It is not illegal to knowingly sell an unsafe product in Australia so there is no overarching safety standard which is a whole separate issue and subject and something that people are pushing for.

So when I started in this industry we were doing liquor brands, we were doing things that plugged into the wall so I’ve learned over the years just avoid things that plug into the walls.

So when a beer brand comes to you and they want 1000 fridges and you do the numbers and it’s a million-dollar order but then actually you realise the standards around electricity so there’s probably a few mandatory standards that exist for products and you are right, metal straws wouldn’t even come under it and those things around food safety.

So the longer I’ve worked in this industry the more complex we’ve realised that that area is which is why we are now trying to lead and help educate and inform people around some of the areas that they need to be careful of.

Darren:

So what is the process? There are minimal guidelines as you say, what is the process of thinking through the implications for the brand when they come to you or the agency has come to you and they say we want something that is really going to knock the socks of and by the way we’ve got a limited budget.

How do you come up with something that is safe, minimises the risk, that also meets the criteria of what they are trying to achieve?

Adrian:

The longer we work in it the bigger the portfolio and the deeper the understanding that we have. I think one of the challenges, why the industry has such a negative perception, is it actually boils down to the budget which might be ten cents or even a dollar or a couple of dollars and the safety requirements.

For example, if we are doing a liquor brand we can’t do anything that would appeal to kids so we  just go through a fairly standard risk assessment process.

In the creative process we might come up with a hundred ideas but when you actually put them through that filter you might have 4 or 5 that pop out. Being honest about it the biggest issue I believe for marketers is an opportunity cost because there is low hanging fruit here.

In our experience we are working on great brands, we are working with smart people, they’ve got substantial budgets to spend and the amount of times we are invited to sit down at the table with a creative agency and put everybody in a room together, and it only needs to be for 30 minutes on a particular project, that’s where the innovation and real creativity comes out.

It might be a pen but it could be adapting it in some way, so unfortunately what happens is people revert to off the shelf products and they revert to something which is standard which is why we generally don’t sell innovation.

Darren:

A lot of what’s seen as promotional products or branded merchandise are things that are given away. Is there a trend or is there an increasing opportunity of actually designing and developing things that become almost a product in their own right?

You know, something that goes with the product that enhances the brand experience and has such value that consumers are willing to pay for it or is it always a promotional giveaway?

Adrian:

I think we are going to see a shift away from promotional giveaways for the sake of giving them away. We do very little conference items. I cannot stand turning up to a conference and there’s a compendium and a pen that has some utility at that time.

Darren:

The show bag we call it.

Adrian:

Realistically they are single-use. I think there are some big trends happening and I think there’s going to be a push away from those low cost giveaways.

However, if they are responsibly made, if there is an opportunity for them to be recycled, but one of the big issues I have is with the packaging industry. One thing we don’t really question is the huge amount of packaging used.

Particularly online, my daughter’s bought a couple of things online and I have almost fallen over when I’ve seen the cost and the extent and the complexity of the packaging that comes with it. So I think there are other industries that need to be accountable.

From our perspective, the frustrating thing is that this really works. It cracks me up if you go to a Waratahs game and you’ve got doctors and lawyers and a higher socio-economic group and you get a couple of the Wallabies players walking around after the game throwing a foam ball that’s probably a 30 cent item and they are almost wrestling each other and they probably are, as they’ve had a few drinks, so frustratingly enough this stuff works.

People love tangible products and again I believe there is still great longevity in this business. What has to happen is accountability and scrutiny, so I say bring it on if we get drawn into a large organisation and we are sitting in front of their quality team and their procurement team.

So on a couple of projects recently, they’ve been global projects, we’ve been in the factory in China with the European quality team, complete transparency and we walk around together and say that’s right and that’s wrong and that collaborative approach and that change is really refreshing. It is what motivates me.

Darren:

Adrian what I’m getting out of this conversation is that you are really almost a manufacturing outsourcing function, aren’t you? You are manufacturing branded products.

Adrian:

A hundred percent. So we are a service provider. We don’t have existing products that we sell and we are an agent. Again I would love to pretend otherwise, I’d like to say no we’ve got IP, we are completely different to anybody else but that’s exactly it.

What we try and do is inform and educate and influence it. I’ve listened to a couple of your podcasts around the challenges to procurement and around the lack of knowledge.

There was one really interesting thing where they were talking about the marketing team actually spending time in the procurement team and sharing that knowledge and that information.

What we have realised in particular with agencies because I can say I’ve worked for an ad agency myself, I think I was an ad snob. These were the days of above the line and below the line so the thought of going below the line was a career slide. It is actually people are a little embarrassed to say we don’t know.

What is amazing is when we work with clients and customers for a number of years where the barriers come down and then they say look how does it work in a factory, how do we actually do this once there is that trust in the relationship.

The approach I’ve realised we should take now is actually just sharing it and saying this is how we work rather than being worried about our competitors stealing it or there being any great secrets. Taking button batteries as an example, there are a few really serious potential issues where this stuff needs to be discussed.

Darren:

And beyond manufacturing and the safety of manufacturing, there’s also the increased responsibility around supply management and so I would imagine acting as an agent to go and source manufacturing you would also have to be incredibly aware of all of the issues in managing supply chain; environmental sustainability, end to end impacts from manufacturing to disposal, slavery and working conditions, and all of these would have to be part of the consideration, wouldn’t they?

Adrian:

100%.

It is a very complex area and there is legislation around that now—the modern slavery reporting requirements are bringing that to the surface. I say bring it on because when we look at the people producing these products there has to be transparency and accountability.

The encouraging thing is once you start talking about the sort of products and brands we work with, the promotional products industry even though on the surface it is putting lots of trinkets and trash out there when you look at the fashion industry or even the fishing industry we score quite highly.

China, there is very little child labor. So, I’ve realised going down that journey we should be proud of what we do and we actually rate quite highly. Generally a lot of those issues around jobs that are dirty, difficult, or distant, so modern slavery risks where you have low paid people on a fishing boat out in the oceans with no visibility doing a dirty job, that’s where there are massive issues.

In fashion, you can have home workers in countries like Bangladesh etc so luckily in our industry, in the marketing industry there are risks but actually there is some good news because you walk through China and most factories are new and modern and things are done properly.

Darren:

Now you did mention earlier Adrian, your two main groups of clients are the sort of marketers and agencies and the direct procurement people. Is there a difference between their awareness of the supply chain issues between the two? I would imagine procurement people would be all over the requirement to have a clean supply chain, more so than agencies or marketers or am I wrong?

Adrian:

Look I think it actually comes down to the individual. That’s my observation so certainly in their roles and this also comes down to what they are measured on.

I think we are playing a long game here. I’ve had a couple of quite staggering experiences in my career and one in particular was when we were dealing with a buyer in a procurement area where we were supplying a product at a very high quantity.

We said the global standard here for this particular material, in this case, was PVC, and they said to us we don’t care about that it is just about price. The reason I realised was that it wasn’t a KPI for them so they weren’t measured on that.

So we are all busy, we’ve got kids, we’ve got families, and we’ve got jobs so my observation is this has to come from the top down. And where again the companies that are doing this well are the companies that are being caught out.

At the moment that really senior level comes down and these are your KPI’s and now if we have a product recall or this is our corporate policy and it is going to be enforced that is where that change happens.

I will name names because of all the businesses we have worked with Twining’s are amazing. So we are not able to work with the local suppliers. They are doing this at a global level so it’s probably a bit easier for them because they might have a handful of offices around the world.

But if they have to source 50 umbrellas from a local supplier we have to do a SAQ, which is a self-assessment questionnaire which even for the supplier in Australia it goes through the really detailed areas to get them signed off. If they are not signed off they are told they cannot buy this product.

Darren:

It’s fascinating because these are huge issues for corporations. The risk management that occurs within large corporations and the impact that that has all the way down to sourcing their trash and trinkets branded merchandise, you would think it should be essential anyway because anything your brand is on you should ensure it meets the minimum standards if not the highest possible standard.

Adrian:

It should and I can tell you that when it does hit that table it gets their attention. I had a phone call at 9 o’clock one evening about 4 or 5 years ago from the head of legal for this particular organisation and they said you have just produced X, you have to stop distribution, they have to be recalled, we’ve had a consumer, in this instance, it was a garment, and their son has gone into anaphylactic shock.

Darren:

Wow.

Adrian:

So this had hit the top straight away hence them even having my mobile number. So the really good thing is that I knew this wasn’t the case. So we put a hold on everything and we went back to the factory and they could produce the Optech testing certificate.

So luckily because of the process that we follow you can’t cause anaphylactic shock because it’s a food issue. So we went through all the steps, we provided all the documentation and with T-shirts actually you have to be very careful because there are some hideous chemicals so there was some potential for there to be some quite serious issues.

Sure enough two or three weeks down the track they said thanks we have gone through the process and we are satisfied that isn’t the case.

When these incidents do occur, businesses get a very quick and robust lesson in what their supply chain actually looks like. From my perspective, it is always so much better to do it upfront.

One thing I’ve thought of is that we say promotional products are low risk, they are not low risk, what I have realised is that they are low spend. So this is just about some scrutiny coming into our industry. So above the line and below the line, it was all media, and just as people started looking at promotional products digital came along.

Darren:

I think that’s the paradox that is really hitting me that for a category, I started this by saying I felt I was going into this by the shallow end of the pool but in actual fact, there are so many risks associated with a part of the marketing supply chain that is crudely often an afterthought and that also is under so much pressure for cost.

Yet you would think because of the risks associated you would want to put in place a framework and I know you guys have, haven’t you. You’ve done quite a lot of work at Inck developing guidelines and processes. One around safety and the other around the supply chain. Without blowing your own trumpet is this an industry-based initiative or is this something you are leading?

Adrian:

No, it is something we lead and look I would love to blow my own trumpet and I would love to appear altruistic. But the harsh reality is I have three teenage kids and I own a business, so what I realised pretty quickly is that if there is a product issue, number one I could destroy my career. I quite like my clients, I could destroy their career or their business or the brand they are working on.

Take Blackmores, when we started working with Blackmores, they are responsible for the Talley’s, their share price, that brand value was through the roof at the time. This was the time when their share value was shooting up and we were putting lots of items out into the market. If there was a product issue we could have caused massive damage to that.

That was an Asia area. So quite honestly the reality is when we bring products into this country across the border, as the director of this company if someone is harmed the buck stops with me and the buck stops with us, so it is a necessity for us.

The thing that is scaring me at the moment is the lack of understanding with the people buying direct. Interestingly we talk about market procurement, one thing I’m fascinated about is measurement and ROI because you can’t really measure the success of promotional products.

You could, it’s just that no one has really spent any time putting the measures in there.

I can tell you 90% of the people we talk to don’t even know how much they are spending in this area.

If you are talking to a business they might even uncover a spend of many millions. They don’t know who’s buying them so that’s why I say we are playing the long game. I reckon I could be sitting in front of you in ten years and if we have made 50% progress then there’s a lot of work to be done.

So, yes we have, we have a product safety framework and we have never had a product recall and we are very careful what we do. It is common sense for me, if I’m playing the price game and I’m selling cheap products I’m introducing a massive amount of risk into my life.

If we work with customers that value this and we want to pay the proper price and we are working with great suppliers, the risk is almost negligible.

Darren:

Well Adrian we have run out of time. It’s a fascinating topic. I absolutely apologise because it is certainly more sophisticated and more complex than what I thought when I came into this conversation so thank you for sharing that with me.

Before we go though I have one question to ask you and that is of all the branded merchandise you have ever produced for your clients, which one is your favourite?

Ideal for marketers, advertisers, media and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here

 

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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