FAQ s for INDUSTRY PARTICIPANTS & NEED TO KNOW FOR PROMOTIONAL PRODUCT PROFESSIONALS.
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1 FAQ s for INDUSTRY PARTICIPANTS & NEED TO KNOW FOR PROMOTIONAL PRODUCT PROFESSIONALS
2 Meet Our Speakers Bill Yelland Jae Rang Lisa Leitch
3 PPPC Vision & Mission PPPC Vision Statement Our vision at the Promotional Product Professionals of Canada is to be the voice of the Best Branding Solution in Canada. PPPC Mission Statement Our mission at the Promotional Product Professionals of Canada is to lead, inspire and advance the promotional products industry through the strength of its participants.
4 PPPC Values We shall inspire creativity and innovation in all aspects of our service to the association members and the participants in the industry. We shall respect the opinions of, and fairly represent all categories of membership in the Promotional Product Professionals of Canada. We shall support the communities in which we live and operate. We shall emphasize communication, education, recognition and development of our members within our association and within the community. We shall conduct our business affairs with uncompromising integrity.
5 PPPC Values We shall be the voice and the spirit of the Promotional Products Industry in Canada and we shall lead the industry to greater heights through continuous improvement. We shall strengthen business relationships between suppliers, distributors and clients by providing products and services of the greatest value through creativity, innovation, and quality. We shall respect the rights of all of our members with dignity and equality.
6 About the Promotional Products Industry
7 History & Evolution of the Promotional Products Industry The first known promotional products are commemorative buttons, tracing back to 1789, when George Washington was elected president In 1881, calendar advertising was introduced Jasper Meek a newspaper owner was a major contributor to the budding promotional industry The Promotional Association in Canada began in 1956 as the Specialty Advertising Counselors of Canada Inc. Works closely with PPAI Promotional Products Association International in the U.S. Thriving and dynamic industry growing as promotional consultants who provide creative promotional solutions to help companies grow their business and achieve their marketing objectives
8 Defining Our Industry Today Promotional Product Professionals Are: Professional problem solvers Solution providers What are promotional products? Tangible symbols or products Tens of thousands
9 5 Disciplines
10 5 Disciplines Specialty Advertising: a promotional message placed on a useful item and given with no obligation. Premiums: give a useful item with some strings attached, example, buy a book, get a free bookmark. Incentives: a promotional product is a premium when it is offered as an incentive to produce a specific action. Example reach a sales target and get a free vacation (incentive travel programs, sales incentives). Rewards: promotional products signifying performance Business Gifts: items given by businesses to employees, customers, suppliers and other important stakeholders.
11 Logo Application Many decorating techniques to apply the logo: Screen printing Embroidery o Different locations o Tone on Tone effect Sublimation Cresting Engraving Puff printing Pad Printing Digital Foil Stamping Offset Process
12 Overview of the Industry Canadian Sales Volume: $3.97 Billion in 2009
13 Distributor Product Category Breakdown For 2009 Wearables/Apparel continues to be the dominant product category within the industry with 30% of the sales. Source: PPPC Survey 2009
14 Distributor Sales by Program Type For 2009 Business gifts continue to lead the way as the top client program. Source: PPPC Survey 2009
15 Industry Growth Average annual growth in industry revenues is 13% for distributors and 14% for suppliers. PPPC represents the cream of the crop in the industry. PPPC distributors account for a significant 46% of industry revenues, representing 19% in Canada. Similarly, PPPC supplier members accounts for a whopping 86% of industry revenues but only two-fifths of businesses. Source: PPPC Survey 2009
16 Distributor Margins Average Mark up : 84.2% Average Gross Profit Margin : 45.7% Source: PPPC Survey 2009
17 What Does It Take to do Business in This Industry? Integrity & Professionalism Business plan Win-Win Partnerships Know your business Know your key client type Technology Custom Products Artwork & Proofing System Financing
18 PPPC Code of Ethics 1.1 Conduct business at all times in ways that maintain high ethical standards. 1.2 Demonstrate a commitment to honesty, integrity, truth, fair competition, customer service and good taste in both business practices and promotional activity. 1.3 Obey the letter and spirit of the law. 1.4 Strive to be good corporate citizens in terms of philanthropy, respect for the environment, job creation, product health and safety, and support for society's well-being.
19 PPPC Code of Ethics Cont d 1.5 Reject any business practice that is misleading, illegal, unprofessional or otherwise in violation of this Credo. 1.6 Avoid any action that violates or diminishes the legal and civil rights of customers, employees, or others with whom they may have a business relationship. 1.7 Notify the Association when they encounter behaviour that is or appears to be inconsistent with these standards; and 1.8 Do nothing to bring the reputation of the industry into disrepute.
20 Supplier-Distributor-Client Model Manufacturer/ Importer Multi-Line Representative Supplier Direct Houses Distributor Advertising/ Marketing Agencies Promotional Buyer
21 Supplier/Distributor Relations Relation: aspect or quality that connects two or more people as being or belonging or working together Suppliers Long term relationships Distributor needs Help Distributors educate Promotional Buyers Respect distribution channel Take responsibility
22 Supplier/Distributor Relations Distributors are the extended sales force for suppliers Supporting the model benefits everyone Suppliers selling direct defeats the model Social Compliance is the responsibility of all parties Respecting Core Competencies of Suppliers & Distributors is key Sales policy disclosure in the PPPC roster fosters transparency Distributors going direct off shore defeats the model PPPC is not a regulatory body
23 Promotional Product Ordering Process Supplier offers a range of products Distributor Recommends products to Client Client chooses product and issues PO Distributor issues PO to Supplier Order confirmation Artwork proof Product decorated with logo Product shipped to distributor or client Invoicing & Payment
24 The Unwritten Rules Suppliers & Distributors General competition Benefits of supporting the chain Triangle trust & partnering attitude Concern about the internet clients going direct Invoicing & Payment Pricing honouring same pricing to all distributors Competition makes us better Competitive Pricing & Quotes
25 Together, Distributors & Suppliers must respect each other as unique businesses that are being profitable together. Supplier relationships are just as important as client relationships
26 Positioning yourself as a Professional Promotional Consultant Are you selling stuff or are you selling solutions? In this industry, there are many people who are order takers, interested in promotional product transactions, not value added solution selling This is your opportunity to differentiate yourself in the industry and position yourself as a Professional Promotional Consultant You are providing a solution to the client who will appreciate & respect you for your expertise You ll increase your top line sales dollars and your bottom line dollars and make more money!
27 Client s Perspective Clients are looking for: A promotional partner who asks questions to understand their business and marketing needs Provides strategic and relevant promotional solutions Professional Promotional Consultant who attends promotional tradeshows and looks for new and innovative promotional products and pro-actively presents them to the client Professional Promotional Consultant who provides recommendations on different products and logo application Keeps them informed throughout the order process, i.e. acknowledgement of order, delivery date and follows-up after the order is delivered
28 TOP 10 Reasons to work with a Professional Promotional Consultant 1. Consultants are the experts in their field 2. Good consultants go beyond just selling products 3. Professional consultants have access to vast product research resources, including an extensive database which contains more than 300,000 products 4. Consultants are in tune with the trends, including hot items and the newest products and processes. A qualified consultant can add creativity, innovation and imagination to your overall program to achieve your goals
29 TOP 10 Reasons to work with a Promotional Consultant 5. Your consultant is more than just a salesperson 6. Personalized service is the role of a consultant vs. buying direct on the internet 7. Industry consultants can offer experienced advice on how (and IF) to imprint items 8. Trained consultants can save you money in the long run 9. Consultants will work with you to get your artwork imprinted properly 10. Professional promotional products consultants can assist you in developing a workable distribution plan for your products. Source: PPAI
30 Product Sourcing PPPC Suppliers Supplier Catalogues & Showrooms Tradeshows Industry Publications: Idea Book Supplier e-blasts PK Products Sessions
31 Sourcing Tool - Promocan
32 Using the Sourcing Tool - Quote/Flyer Building Tool Set V-Spec Sampling Create custom product to integrate into your proposal proposal to your client For additional information/education Visit the PPPC YouTube channel
33 Product Updating For Suppliers PDF of your catalog Images and text Upload your catalogue material to: pppcupload.officebeacon.com 7 to 10 day turnaround for your catalogue to appear on promocan.com in both search engine and in virtual ecatalog format.
34 Product Selling vs. Program Selling Product Selling Consultative Selling Program Selling Custom orders Most distributors focus on one time product selling. This type of selling has several advantages and disadvantages
35 Advantages of Product Selling No inventory or fulfillment Sales are low risk Margins do not need to reflect the cost of fulfillment, warehouse space, additional personnel, etc Orders tend to be larger than program orders
36 Disadvantages of Product Selling Lack of consistent ordering No formal client arrangement More work May be highly competitive Growth of internet comparative pricing
37 Types of Program Selling Merchandise/On-line Stores Sales/Employee Incentives Recognition Years of Service Loyalty Safety Programs Dealer Incentives Consumer
38 Advantages of Program Selling Results in larger sales Reduces competition Develops long-term & strong client relationships Additional one-off orders/other departments Professional solutions provider & expert More creative, fun & rewarding!
39 What s Important to the Client? Provide a turn-key solution Employees/Customers want logo stuff Consolidate purchasing = purchasing power Controlled Branding One vendor = partnership Simplify order logistics & efficiency
40 Company Store Program Selling "In-Stock Merchandise Program" Inventory is managed "In-Stock" items generally ship within hours Catalogue - printed or on-line Suitable for clients who are spending $100,000+ or more in promotional merchandise on an annual basis
41 Booking Program Alternative Option No commitment to inventory May be offered through order form, catalogue or on-line Minimum order quantities Orders are combined to reach minimums Deadline for placing order Shipping is generally two to six weeks
42 Industry Discount Codes & Profit Margins CODE Discount Calculation A or P 50% 50% B or Q 45% 55% C or R 40% 60% D or S 35% 65% E or T 30% 70% F or U 25% 75% G or V 20% 80% H or W 15% 85% X 0% 100%
43 How Do We Calculate These Codes? A client is interested in purchasing a quantity of 400 mugs from you. The supplier s catalogue coding is $5.00 (A) You would like to sell these mugs at 40% margin. What is your total cost and sell price for a quantity of 400 mugs?
44 How Do You Calculate Your Net Cost? Product lists at $5.00 on a (A) discount code A discount code is a 50% discount. To calculate your cost % = 50% cost Your net cost is: $5.00 X 50% = $2.50 $2.50 x 400 quantity = $1,000
45 Mark-up vs. Margin What s the Difference? Mark-up: 40% mark-up is +40% on your calculator $1, X 1.40 = $1, sell price ($400 gross profit) Margin: 100% - 40% margin = 60% of your selling price $1, /.60= $1, sell price ($ gross profit) The difference is $266.66!!! 40% + Margin is the Industry Recommendation
46 Calculate Your Annual Gross Profit Example: Total Annual Sales (selling price) $500,000 Minus net cost of goods purchased $300,000 Equals Gross Profit Amount: $200,000 Gross profit as a % margin divide gross profit by total sales: $200,000/500,000 = 40% (gross profit margin)
47 Why Gross Profit Margin Matters WHAT BUSINESS ARE WE REALLY IN? We are in the business to make a profit - not to break even, earn just a living or worse lose money! DO THE MATH If median gross profit margin is 35% If median operating costs are 18% If sales persons 50/50 split is 17.5% Therefore GPM left represents a loss! (0.5%)
48 A Small Difference Can Make a Big Difference! A modest 2% increase in gross profit margin can yield surprising results! 2% x $500,000 annual sales = $10,000 increase profit Additional money in your pocket!
49 Why is it so important to Manage Margins? Reduces inappropriate Margins in the Industry Bottom line profit margins are more important that just getting the sale at any price Apply the "2% magic formula" to increase your margins Reduces price bidding/cutting mentality within the industry Position yourself as a Professional Promotional Product Consultant You re worth it!
50 Sales Compensation According to a recent Manpower survey, the most difficult positions to fill in any Organization, are the sales positions. Many variations of gross profit split 50/50 or 60/40 depending on the distributor and support provided Trends towards salaried sales force with commission/bonus structure Commission/bonus should be based on profit margins, not total dollar sales
51 Marketing Your Business You are in the Promotional Marketing Business How will you market your business? Do you have a marketing and sales plan for your business? How will you demonstrate the power of promotional products to promote your business? Suppliers offer special self-promotion offers to help you promote your business to your clients and prospective clients
52 Branding Brand is the promise. The big idea and the expectations that reside in each customer s mind about a product, service or company. Branding used to be associated with big consumer products now every business talks about brand. A strong brand stands out in a densely crowded marketplace. Products are created in the factory. Applying the logo application creates the brand
53 What is your Brand? Are you consistently representing the brand of your company? Typical marketing materials such as your logo, business card, signage, facility, lobby, marketing materials, packaging, shipping documents, invoicing, voice mail messages, signatures, etc, should consistently represent your brand. Everyone of these elements touch your customers & prospects and re-enforces who you are and your brand. Is your brand consistently represented throughout your organization?
54 About the Promotional Product Professionals of Canada
55 PPPC Membership Categories Suppliers Premium & Incentive Suppliers Distributors Multi-Line Supplier Agencies Franchise Members Reciprocal & Associate Members PPPC provides services to Industry Participants who subscribe to the association. Subscribers pay an annual Account Maintenance Fee and pay between 25-30% more than members for the limited selection of products and services made available to them.
56 Membership Benefits Promocan On-line Product Sourcing* PPPC National Convention* PPPC Professional Development & Certification* PPPC Tops & Tops+ Shows PPPC Local & National Networking Opportunities* PPPC Print Publications - The Idea Book, PPPC Roster*, Marketingedge PPPC Digital Publications E-Weekly* Pantone Products* - discounted PPPC Partnership Points Rewards Program* PPPC On-line Members Lounge* PPPC Membership Directory* PPPC Image Award Entries & Show* PPPC Scholarship/Bursary Program* * Membership Exclusive
57 PPPC Value Benefits Discounted Freight Rates for UPS & CANPAR* Save on group insurance starting at 2 employees with Associum* Save on credit reports, collection services and more with Access Credit* Support for yourself & your employees with NABS Save on artwork & digitizing and more with Office Beacon* Save on credit card processing rates with EVO Canada* Save on print, mail, fulfillment and distribution with Data Direct* Ensure the best product quality for your clients with UL Verification Services * Membership Exclusive
58 PPPC Value Benefit Partners
59 Governance National Board of Directors representing distributors, suppliers and multi-line agencies across Canada Committees Regional Chapters with Board of Directors in BC, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Atlantic Canada PPPC Head Office Team Members in Montreal
60 PPPC Tradeshows & Events PPPC-Sponsored Shows The PPPC National Convention - Canada s Annual Trade show with over 500 booths and over 3500 visitors. The Industry at its best. TOPS and TOPS+ Regional traveling shows held in major cities across Canada in both spring & fall. Canada s promotional products tradeshow for Distributors invited clients. Opportunity for Distributors to invite their clients on select days. Visit for show dates/locations
61 Trade Show Rules Show Rules and Regulations make for quality, orderly and effective trade shows. Rules have directly contributed to PPPC s trade show success over the years. At PPPC shows, every category of participants knows who the others are by badge colour. All visitors are qualified by the association and have a purpose. There is no confusion. Exhibitors know which visitors they can provide information and literature to and of what nature. Suppliers contact information is not printed on their materials and distributing net price lists is not permitted.
62 Trade Show Rules Cont d Distributors can feel comfortable inviting the clients in Canada s largest showrooms as exhibitors set the stage to lead clients back to their Distributors with any requests. Clients are specifically identified to a host-distributor who is provided with their client attendance report. PPPC manages shows for the benefit of its members. Shows belong to the members and show profits are reinvested toward member benefits.
63 PPPC Publications
64 PPPC Image Awards
65 PPPC Image Awards Each year, PPPC honours the outstanding creativity of it members through the Image Awards. Competition open to members only of promotions including one or more promotional products in a single business promotion. Gold, Silver and Bronze awards are bestowed on entries receiving the highest aggregate score in each category. Prizes for this competition are presented each year at the PPPC s National Convention.
66 The PPPC Certification Program TAS CAS MAS MAS+ Be recognized as an expert in the promotional industry. The program is revamped to suit your promotional direction. Certified Advertising Specialist CAS complete 75 points 3 years active industry experience 6 required courses (15 points), plus 60 additional points Exam Multiple Choice Master Advertising Specialist MAS additional 100 points 5 years active industry experience No required courses Industry service is required minimum of 1 point, maximum of 15 points
67 How to Earn Your CAS/MAS Points PPPC Trade shows & Events PPPC Online audio sessions PPPC Teleseminars & Webinars PPPC Chapters Meetings & Events Canadian Professional Sales Association PPAI Shows & Events in the US Industry Service Other approved courses, seminars & workshops of your own
68 What s New?
69 Premiums & Incentives Isn t Cash the best Motivator? Products in this Category Include: Electronics, Household, Recreational Leisure, Outdoor, Travel, Jewelry, Gift Cards with a focus on lifestyle type products to reward employees/consumers. P & I Programs Types are: Sales incentive, loyalty, safety, recognition, years of service, consumer, dealer incentives, productivity & performance, etc. This is an opportunity to have long term relationships with clients. In many cases, these products do not have a logo application. 84% of businesses today are using reward/recognition programs. Source: CPSA Contact Magazine, Canada
70 Social Responsibility Promotional Products meet product safety standards Social Standards Environmental Standards Product Liability, Contracts & Insurance Conducting Business Responsibly Customer & Community Responsibility Providing a Great Working Environment Embracing Diversity
71 Eco-Friendly Green Strategy A few terms to better understand selling eco-friendly promotional products: Recycled: products made from materials previously discarded products Organic: products made from materials that are produced with organic ingredients only Fair-Trade Goods: products made by workers who are not exploited in the workplace and paid a fair wage for their labour All Natural: products containing no chemical additives
72 Are you an Eco-Friendly Business? Print Smarter & Go Paperless when possible Ramp up your recycling Reduce packaging Reduce light & use of electricity Reduce use of water Create a healthy office environment
73 Power of Promo Products - ROI 71% of business people reported receiving a promotional product in the past 12 months - 34% of them had the item with them! 76% of respondents could recall the advertiser s name on the product, whereas only 53% of the same group could recall the name of a single advertiser they had seen in a magazine or newspaper in the past week 52% of respondents did business with the advertiser after receiving the promotional product and 52% said their impression was more favourable after receiving the item Source: PPAI Study of Business Travelers
74 More powerful ROI Stats 72% of tradeshow attendees who received a promotional product remembered the name of the company that gave them the product. As a rule, promotional products of greater value generate more sale leads than products of lower value. Most people over 65% of people surveyed, keep their promotional products for more than a year. 35% keep them for at least two years. Why Do They Keep Promotional Products For So Long? 76% found the item useful 20% thought the item was attractive 1% refer to the item for information 3% Other Source: PPAI Study of Business Travelers
75 Future of the Industry The PPPC is proud of its fine reputation and heritage, but we are also looking towards the future. Technology Commoditizing vs. Promotional Consulting Importing Promotional Buyers Buying Direct Continuing to raise the bar with Social Responsibility Eco-Friendly Positioning yourself & your business as a professional in PPPC
76 Evaluation & Quiz Completion Complete the Quiz and Evaluation Form to earn your CAS points for listening to this program Send to: Professional Development & Certification Promotional Product Professionals of Canada 455 Fenelon Suite 202 Dorval (QC) H9S 5T8 E:mail:
77 Here s to your professional promotional products business success!
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