And all of a sudden another twelve months have come to an end: 2015 was a turbulent, fast year. Whereas dramatic occurrences came thick and fast on the global affairs front, the promotional products industry remained unaffected to a large degree, but it certainly couldn’t complain that things were boring either. Nevertheless, industry players from all over Europe still found time again to take part in eppi magazine‘s industry monitor. A review of the promotional products year 2015.
If one takes a look at the global affairs since the start of the year, there certainly weren’t a lot of good things to report about in 2015. When this issue goes into publication, the terrible terrorist attacks in Paris took place just two weeks ago and also in the months previous to that hardly a day passed by without shocking breaking news. Terror, wars, refugee crisis – it was hardly possible to escape the coverage and some private people were actually affected personally in one way or another.
So, it is all the more surprising that the overall balance of the promotional products year is not that bad – at least from an economic point of view the situation was much worse in past years. At least this is the verdict we have come to based on the industry monitor that eppi magazine carries out among the industry players across Europe every year (see also the interviews on the following pages). Many people are reporting about good growths in turnover and are drawing a satisfactory balance towards the end of the year: “We recorded a strong 20% growth in turnover” (Andy Knight, CHX). “We will close this year as the best in our history with an important increase in our sales” (Joan Pera, Arpe). “For me 2015 was the best year since the company was founded” (Cornelia Kreitzberg, jack’s gift company). The market in the Southern European countries such as Spain, Portugal and Italy experienced a recovery after many long years of recession. Many Southern European suppliers are now reaping the benefits of their crisis-based focus on exports and are recording solid growth whereas at the same time the domestic demand is also rising. The optimism was clearly noticeable at shows like the pte in Milan or the Promogift and C!Print in Madrid. “The economy in Portugal is re-establishing itself, which will have an effect on the spending on promotional products” (Ricardo Jorge, Effect).
The fact that the overall economic crisis seems to have been overcome, certainly doesn’t mean that 2015 was an easy year – on the contrary. The companies had to work hard at their success, turnovers had to be painstakingly battled out. The price is still criterion number one in many sales discussions and frequently the final decisionmaker. The consequences: aggressive competition and sinking margins. “The increasing number of suppliers on the market and free services for the customers put pressure on the margins” (Thomas Derhaschnig, Nowak Werbeartikel). It is not a new phenomenon, but one that constantly demands new counter initiatives. Particularly distributors, but also suppliers need strategies that mean that they are no longer exchangeable. Creative consulting and product development, quality orientation, specialisation and full-service are established strategies, which do nevertheless prove demanding to implement – however those who manage to establish USPs, are geared up for the future. “A promotional products distributor should know that selling via price alone has not helped anyone long-term,” (Ralf Hesse, m.e.s. Marketing Services). Inwd11 an industry that can hardly be clearly distinguished from similar disciplines and industries, opening up new sales markets and business areas can of course be a way out of the toils of the drop-shipment business. Merchandising, for example, is a lucrative branch of business that more and more industries, public corporations and companies are discovering – and it is highly attractive for promotional products players too. “Its significance is very high today, perhaps higher than ever before. The collections are popular, whether football, TV series, comics or stars” (Tobias Bartenbach, Bartenbach Werbemittel). The business with the fans is a growth market – and offers an invaluable advantage compared to other areas of application for haptic advertising: It is relatively resilient to crises. It is indeed a demanding, but by no means impossible task for professional promotional products agencies to develop merchandising collections – after all they are used to rigidly observing CI guidelines. The constantly improved and more sophisticated customising technologies also provide further assistance here.
How was 2015 for your company?
Joan Pera: We will close this year as the best in our history with an important increase in our sales. Moreover, we have also invested in new equipment and new management software. We reformed our offices and warehouse to improve our service and also because our workforce has grown up to 14 people. Finally, we are proud to have received the Promotional Gift Award 2015 and Pimec Award 2015 for the most competitive small Catalan company.
How important is the merchandise market for our industry?
Joan Pera: For us, it is the most important market which accounts for around 40% of our sales.
How important has digital printing become in the meantime?
Joan Pera: We focus on digital printing technologies because they allow us to give more value to our customers making more creative products with better advertising possibilities. Digital printing is the chosen technique of two out of three of our customers.
Is speed becoming the most important factor when it comes to staying competitive?
Joan Pera: It definitely is one of the key factors especially if you are a European manufacturer. In my opinion you only have two ways to hold your own against the competition: the first one is to be the cheapest, but then you’ll probably lose against the overseas suppliers. The other option is to be better in other fields. Faster delivery is a good way to excel.
What do you expect from 2016?
Joan Pera: Our forecast is to keep growing in Europe thanks to new products and to penetrate new markets.
How did the year 2015 go for you?
Rudi Raab: Due to the weak exchange rate of the dollar, the first half of the year was very difficult for us. Furthermore, the competition is becoming noticeably more aggressive. In spite of all this, we are now satisfied with the very positive development towards the end of the year.
What are the relationships between the suppliers and the distributors like?
Rudi Raab: The trade is our top priority. It is therefore our declared goal to reinforce this relationship. However, the dialogue should definitely be intensified, because we can only be successful, if we work together. Some trading partners and indeed also some manufacturers perhaps don’t agree entirely. In any case, we welcome fair dealings with each other and that everyone is aware that the cheapest offer isn’t always the best one.
What is your opinion of the merger of the individual German associations into the general association, the GWW, which happened this year?
Rudi Raab: Very good. Here too, the dialogue between the individual areas has to be reinforced.
How important are trade fairs that address the users for you?
Rudi Raab: Very important. The flood of different items that are offered on the promotional products market is already an enormous challenge for the individual distributors. Some of our products also require explanation and particularly trade fairs are an ideal opportunity of explaining the items to the industry customers in detail. In the end, the distributor also benefits from this.
In this connection, what do you think about the fact that there is a working committee within the GWW that is lobbying for the PSI to be opened up to industry customers?
Rudi Raab: Even though we are not an exhibitor, I think opening up the show would be a good idea. All manufacturers, who exhibit at trade fairs, have catalogues with industry prices. And the big industry customers are present at the PSI anyway. And they have been for many years already.
Were there any special product or customising trends in 2015?
Rudi Raab: Electronic items are currently very popular. And sustainable, eco-friendly and fair trade items are also highly appreciated in the meantime. One of our top sellers this year was the shopping trolley chip Johann.
How do you assess the past year – with a view to your company and the market overall?
Marcin Pawłowski: 2015 was much better than 2014. The economic crisis in the EU is over and we are receiving more and more orders. The volumes of the orders are also increasing. Obviously the users are investing more in give-aways again.
What role does digital printing play for your corporate strategy?
Marcin Pawłowski: The digital printing technology always was and still is very important for us: 90% of the production is carried out in-house on Xerox, Epson and Roland printing machines. In September this year we purchased a new Xerox 1000 – the only digital printer that enables you to print in gold and silver – in order to expand our alignment.
One of the advantages of digital printing is its speed. Is speed becoming a key factor?
Marcin Pawłowski: Speed, quality and reasonable prices are indispensable pre-requisites in order to remain competitive. Most of the orders we receive are wound up within two to three days – time is a decisive issue.
Which role does sustainability play for our industry?
Marcin Pawłowski: A big role too. We are very proud of the fact that our production is ISO 14001 (environmental management) and Ohsas 18001 (work safety management) certified. We use LEDs or energy-saving lamps in all of our buildings. All raw materials that we use are recyclable, we are a member of Sedex and only cooperate with verified and reliable suppliers.
What expectations do you have for next year?
Marcin Pawłowski: In 2016, we are expecting to attain a 15%-20% growth in turnover. We will introduce three or four product novelties and will begin to expand into new markets in Europe.
Mr. Bartenbach, how did the financial year 2015 go for your company?
Tobias Bartenbach: 2015 was a very strenuous year. And it was challenging too. But at the same time is was a fantastic year for our company. With many pleasant experiences, a lovely team, motivated people around one and ultimately a year with very exciting projects and solutions on the theme of haptic advertising.
Earlier this spring you announced that the company was changing its name: Bartenbach Marketing Services became Bartenbach Werbemittel. What was the reason behind changing the company’s name?
Tobias Bartenbach: The new name provides clarity – for ourselves and for our customers. Now, the name describes precisely what the company does. We are focusing and concentrating more than ever on our original theme, the promotional product. This enables us to identify ourselves and grow further with the industry and the wishes of our customers.
The showroom at the company’s premises in Mainz has also been extended so that hundreds of innovative promotional products can be presented. Beyond this, how do you convince industry customers of the impact of haptic advertising?
Tobias Bartenbach: First and foremost, haptic advertising convinces as a tangible medium. Furthermore, we strive to enthuse others for haptic advertising. We individually develop tailor-made ideas for the economy, industry and trade, which we present live on-site at the customer’s premises as a rule or in our showroom. It is particularly important to sell, sense and experience brands together with our customers. We personally sit round a table together with the decision-makers at the companies, discuss and check from all sides what the best possible way is to achieve the respective desired effect among the target groups. This is followed by precise proposals, self-produced dummies, 3D samples and in-house creations, which convince the customer.
What significance do you think the merchandising market has for the promotional products industry?
Tobias Bartenbach: I think it is of great significance today, perhaps more than ever before. Being a fan is something special and not only on Facebook and co., but also beyond this. Collections go down well, whether for football, TV series, comics or stars – merchandising sells!
Were there any special product or customising trends in 2015?
Tobias Bartenbach: 3D printing was already a big theme in 2015 and will no doubt experience enormous growth in the coming years. This technology will make things possible that we can’t even imagine today. Regarding customising techniques, we have recognised a new trend in paintwork finishing and also the personalisation of promotional products of all kinds is still extremely popular.
You celebrated your 75th birthday this year and are still actively involved as an organiser of trade fairs, a consultant and an expert on Scandinavia. What is the fascination of the promotional products industry?
Klaus Beyer: Networking quite literally involves consulting, planning and implementing. In all areas one encounters people, who one knows or who one gets to know. The people and their work are always the centre of attention and the “personal level” is still today what fascinates me about our industry, which makes it easy to live my “hobby”.
As a long-standing companion of the industry: What do you consider to be the biggest differences in today’s promotional products market compared to ten or twenty years ago?
Klaus Beyer: The practices of the promotional products business have become tougher. Of course, it was always about bargaining and haggling – that is simply part of the selling trade. However, the fairness falls by the wayside more and more often, whereas it should be the order of the day. Unfortunately, this goes amiss more and more in today’s digital world.
The GWW has been constituted as the new general association of the German promotional products industry. Will the industry gain more lobbying power as a result?
Klaus Beyer: Yes, the industry’s strength will increase. There have been several attempts to create a political lobby over the past decades, but the individual associations were too small to develop the necessary power. Now, after joining forces we have the chance to draw the attention to and place the significance on the promotional product that it deserves. With the aid of further, even bigger associations we should succeed in achieving this goal.
How do you assess the trade fair landscape of the promotional products industry?
Klaus Beyer: The trade fair landscape in Germany is becoming increasingly unattractive. The significant trade shows such as the PSI, HAPTICA® live, Newsweek and Trend are being enhanced by many local events. Some of them are important and definitely useful enabling the industry customer can find the corresponding orientation on-site. However, a large number of distributors think they too have to organise a “show”, which normally costs them a lot of money, but doesn’t bring the invited suppliers any commercial success. Yet the Newsweek is the perfect place to attend to and inform one’s customers without going to a great deal of expense. I can’t understand why some distributors don’t use this platform.
I can’t really appraise the trade fairs abroad in general, I only have a certain overview of the events in Scandinavia: Here, only the Swedish shows are of international significance. The PRomotion Expo in Jönköping established itself as a successful annual event for eleven years, before it was replaced by the Promotion Mässan in Stockholm several years ago. It is a struggle to attract the necessary international attention to this exhibition. Unfortunately, many German exhibitors don’t participate at a lot of the Scandinavian shows because they coincide with German dates.
What is your opinion about trade shows that are open to end customers?
Klaus Beyer: Generally speaking, all events are welcome that offer the end customer the opportunity to gather information, as long as they observe our industry codices.
What is the mood like on the Scandinavian markets?
Klaus Beyer: The mood is very reserved. Of course, one also noticed the effects of the crisis. More and more specialists and smaller suppliers are penetrating the market – which is all too understandable in the global mix. One welcomes Southern European suppliers as long as they have interesting products on offer. We German suppliers have been able to establish very successful structures on the Scandinavian market with local reinforcement. The supplier pool there could hardly do without some German suppliers today. But the same is true in Scandinavia as here in Germany, one only reaches one’s goal if one is persistent. At the PSI 2016 we will no doubt once again welcome new Scandinavian exhibitors.
Your wishes for 2016?
Klaus Beyer: At my age, one only really wishes good health for oneself and one’s family.
How important are promotional products associations for the industry?
Andy Knight: As one of the Board Directors of the British industry association BPMA (British Promotional Merchandise Association), I am convinced about the central significance of the associations. The main focus of the BPMA lies on the professionalization of its member companies as well as explaining the uses of promotional products to the users – tasks that can only be carried out by an independent industry association.
Is the merchandising market a growth market for promotional products companies?
Andy Knight: Not to a great extent for us at the moment. However, in collaboration with the bigger distributors, we do intend to concentrate more strongly on the merchandising market in the future.
Is speed going to become one of the most important factors in terms of competitiveness?
Andy Knight: Definitely. We are convinced that the speed factor is going to play a key role for us as a company. Ultimately, in this respect we have a competitive edge as a British manufacturer.
How important is sustainability for the promotional products industry?
Andy Knight: The theme sustainability is very important for us and one of the cornerstones of our business philosophy. Unfortunately, many customers are not prepared to pay higher prices and orientate themselves more on cheap important products, which are manufactured under dubious conditions as far as the environment and working conditions are concerned. Under these circumstances, it is difficult to remain competitive.
How have your turnovers developed in 2015 in comparison to 2014?
Andy Knight: Very positively. Compared to the previous year we recorded a strong 20% growth in turnover in the promotional products area.
How did the year go for you?
Michael Diekmann: In some areas it went very well, but in other areas it was difficult. The promotions and sales campaigns sector experienced good growth within our company.
Your company celebrated its 25th anniversary this year – how do promotional products distributors have to position themselves today in order to operate successfully on the market?
Michael Diekmann: Promotional products distributors are obsolete today. In the past, one talked about the corruption trade, then promotional products and finally advertising materials. But all of these terms are no longer contemporary.
Die UKW doesn’t see itself as a distributor, but rather as an agency that has specialised in haptic advertising implemented in the marketing mix in a creative, target group-specific and resource-saving manner. We leave travelling around the country with a flight bag full of samples to the distributors.
There is a working committee within the new German general association that is lobbying for the PSI to be opened up to industry customers. What do you think about this development?
Michael Diekmann: It doesn’t make any difference to us, because we haven’t been a member of the PSI for years. In principle, though, in my opinion one shouldn’t focus one’s sights on the industry, if one represents the trade. The PSI has contributed very little towards the industry speaking a clear language, therefore it is also partly responsible for the current situation. Basically, the fact that the price is all-decisive today has very little to do with our business. We urgently need price discipline again – and if suppliers serve both distributors and the industry, they should definitely work with different price ranges. Fortunately, several brand name companies still follow a clear price strategy.
Are product developments a way out of the price dilemma?
Michael Diekmann: They definitely are for us, because a broad spectrum of competence is required when producing custom-made designs: From the idea and the design development, to the tool-making, through to the production. And, of course, then one can also provide reasonable quality, which is last, but not least also environmentally-friendly. For example, we consciously opted for as few plastic parts as possible for the attachments for the smoothie manufacturer, true fruits. Incidentally, a product development that was distinguished with the Promotional Gift Award last year.
How important do you think the merchandising market is for the promotional products industry?
Michael Diekmann: Extremely important. Customer loyalty measures are an important marketing instrument, which bring measurable success. Die UKW specialises in this area and manages numerous international shops for the industry, trade and service providers. The theme merchandising is relevant across all industries and demands both conceptual and customer-specific work.
Was it a good year for your company and for the industry in Portugal?
Ricardo Jorge: The year was not too bad. In terms of turnover, we will close 2015 on the same level as in 2014. The situation of the Portuguese industry in general seems to have improved slightly. The economy in Portugal is re-establishing itself, which will have an effect on the spending on promotional products. Therefore, in the next year, the industry will experience a further upturn.
What are the challenges for today‘s distributors?
Ricardo Jorge: Get good prices, buy and sell effectively and provide excellent service and good quality to your customers in order to get their loyalty. Customers increasingly emphasize good service, combined with competitive prices. They also prefer turnkey solutions which is why we specialise in printing as well. What is the need for the customer to buy the pens from us and have the print done by a competitor? The more services and solutions you can offer, the more customers will trust you.
How important is digital printing in this respect?
Ricardo Jorge: Quite important. For 2015 we predict that digital print services account for about 10% of our turnover. Digital printing is important because it brings an added value and an additional solution, since more and more customers want a work of excellence.
How was the fiscal year 2015 for you?
Marcus Sperber: In the current year our turnover is up slightly compared to the previous year level. Various extraordinary factors such as the targeted depreciation of the Euro, the shortage of the plastic material production and the effects of the introduction of the minimum wage particularly had a negative impact on our margins in the first half of the year. However, the strong increase in the procurements costs in the Far East does also have a positive side to it: We were able to achieve an improved capacity utilisation of our own production sites in Germany. With over 600 plastic “Made in Germany“ items meanwhile, we have consistently expanded our offer over the past years. In general, there is a trend towards an increased quality demand among our customers, whereby the price can’t be cheap enough. We have noticed a slight positive recovery in the situation of our European neighbours, in the core countries France, Italy and Spain.
What is the situation like in the Far East?
Marcus Sperber: Over the past years China has advanced from being a developing country into one of the leading industrial nations. Due to this rapid ascent, the labour costs have increased at an above-average rate. The Euro depreciation and the strong RMB have further fuelled the price increases – with the result that many products can be manufactured cheaper outside of China. Because of our efficient plastic production, here at elasto we are able to manufacture “Made in Germany“ plastic items cheaper than in China – using German labour and in German quality. In some areas the unit labour costs in Eastern Europe are cheaper than in China.
How do you evaluate the European trade show scene?
Marcus Sperber: The trade show scene has undergone strong change over the past years. Ten years ago, the focus was still placed on the presentation of new products – today it has taken on more the character of a big get-together. The PSI Show that takes place in Düsseldorf at the beginning of the year still remains to be the undisputed number one in Europe – in addition to further important, national events.
I have been welcoming the structured opening up of the PSI Show to the professional trade audience for years. In an era of a free flow of information worldwide, it is no longer contemporary to exclude industry decision-makers. I am totally convinced that such a move will lead to a further development of the industry. The HAPTICA® live and many other events have successfully proved this.
How do you assess the relationship between the suppliers and the distributors?
Marcus Sperber: The promotional products trade has been elasto’s most important partner for over 35 years, it is so to say our “field service”, which attends to the needs of the industry customers locally. This service and the extensive industry experience will continue to work and be necessary in the future too. The developments of the past years shows that many partnerships between the promotional products trade and elasto have become even more intensive. We enter strategic partnerships together with our distributors, for instance in order to serve a big globally operating customer or to process complete online personalisation. Always under the premise that the promotional products distributor is the local service partner. Nevertheless, time doesn’t stand still in our industry either. I believe that service, speed and a close cooperation could become significantly more important. We have observed more and more people entering our industry from other branches over recent years: Logistics specialists, purchasing optimisers and service providers are interfering in the market shares. Our industry will also no doubt become more digital – so things remain exciting.
Will speed become the most important competitive factor?
Marcus Sperber: Yes, speed will be the competitive edge in the future. Amazon and co. are clearly setting the benchmarks. Here, for example, our customers will be able to benefit from the expansion of our online offer next year. Furthermore, we are optimising our production and customising lead-times on-site in order to achieve faster delivery times. This is a big advantage compared to production from the Far East, which we will continue to consistently reinforce.
What are your expectations for 2016?
Marcus Sperber: The European political climate will remain exciting in 2016. There are many major problems that are very difficult to solve – for example the high influx of refugees, the crisis regions of the Ukraine and Syria or the currency crisis. As an entrepreneur one has to react very flexibly in such turbulent times. Personally, I am convinced that the elasto form Group is well aligned, particularly since we produce in Europe. At the moment, I am expecting a parity for the Euro/Dollar in 2016, which will make producing in the Far East even more expensive.
We have set ourselves ambitious goals for 2016. In addition to a new brand presence, we are also working on the points already described – our online offer, service and speed – to improve things even more for our customers.
How did the year go for Faber-Castell?
Dirk Peppmöller: Generally, here at Faber-Castell we are very pleased with both last year and the current fiscal year, which closes at the end of March 2016. This applies for both Germany and the entire group. Since having earned in the meantime over 500 mil. Euros turnover, we are expecting to achieve even stronger growth than in the previous years. A special development here is the boom we have experienced in the crayons segment – especially among the adult target group. Colouring books for adults are an absolute trend topic. Over the past months, we have experienced a very changeable year in the promotional products sector, which corresponded with our expectations overall. Due to the framework conditions on the market, it was particularly important here to develop further attractive offers in the price segment up to 10 Euros.
In the spring of 2015, the documentary film-maker and Oscar award-winner Michael Moore visited Faber-Castell. He was particularly interested in the cooperation between employer and employee representations and in the company’s social benefits. Is CSR becoming increasingly more important for a company like Faber-Castell?
Dirk Peppmöller: This sub-aspect of CSR has long since been a significant part of our brand essentials. A socially responsible attitude within the company is very important for safeguarding the future – especially for a family company like ours. We can only continue on our successful path with the help of dedicated and motivated employees and as an attractive employer that is able to encourage new employees, who are necessary for our growth, to work for the company.
Which role does the theme sustainability play for your company and the promotional products industry?
Dirk Peppmöller: A very central role for over 30 years already in fact. A reforestation project that was unique in the industry was already initiated in Brazil in the 1980s: On a surface spanning around 10,000 hectares, FSC®-certified wood is grown there for our pencil production. An inspection by the TÜV Rhineland showed that these company-owned forests bind much more CO2 than Faber-Castell’s worldwide emissions. We are thus the first climate-neutral company in the industry worldwide. We are thus delighted that the consumers – and we explicitly include the decision-makers in the promotional products industry here – are paying more and more attention to environmental compatibility.
Next year, Faber-Castell plans to create a 2,000 m² world of experience for 130,000 visitors. What significance does making your brand experienceable for all of the senses have for brand manufacturers?
Dirk Peppmöller: Brand manufacturers often stand for both high-quality products as well as for a successful company history – like Faber-Castell. The historical headquarters in Stein is considered to be a living example of German industry culture, so the family company already has a high frequency of visitors today. Since Faber-Castell had however reached its capacity limit with 16,000 visitors a year, it seemed logical to renovate the space in the historical dispatch building in Stein that had become vacant after relocating the logistics centre and use it for a new visitor-friendly purpose.
What is your opinion about the fusion of the individual German associations to form the general association, the GWW, which took place this year?
Dirk Peppmöller: It is absolutely the right step for the overall interests of the industry, which positively supported from the very start.
How was your year?
Xavier Marín: 2015 has been a continuation of developments that already started in 2014 – a breath of fresh air for our bottom line after five years of recession since 2009. The changes and improvements we implemented in order to become sharper and smarter on the market have been a challenge in themselves, but they did bring us many opportunities.
Do companies need to act even quicker nowadays than a couple of years ago?
Xavier Marín: Speed used to be an added value that made companies more competitive compared to the rest. Nowadays, it’s a must. Not only the speed in the daily operations, but the reactivity, agility and flexibility to adapt to changes. Agility is crucial in all areas. In the “click” era, you have no chance if you are not quick.
How do you define the term “corporate social responsibility”?
Xavier Marín: 21st century companies have to incorporate and commit to all those, who participate directly or indirectly in a company: The workers, administration, suppliers and customers, helping their life and environment become better and safer. It is a challenge for us all and not easy to achieve completely.
Do you have any trouble finding new, qualified personnel?
Xavier Marín: This depends on how much you are willing to pay for qualified personnel. There’s a lot of talent on the market, both employed and unemployed. Just take a look at LinkedIn and you’ll find thousands of profiles looking forward to new challenges and opportunities. It has never been so easy to employ people before and there are no intermediates involved, which makes it faster.
What do you expect from 2016?
Xavier Marín: We expect next year to be a continuation of 2015 and we think this good trend will be ongoing. We want to focus on the development of new products and improve our customer communications. We are expanding our facilities as well, so 2016 promises to be exciting.
What do you think about the merger between the individual German associations to form a general association, the GWW, that happened earlier this year?
Michael Hagemann: I am very open and positive about this theme. When one considers that I already pushed the initiative to found the GWW at the time in 1993 with Walter G. Jung, founder of the PSI, it has taken a very long time for a sensible solution to be reached.
Michael Hagemann: The holistic view of all industry segments is extremely important. To make this possible, personal vanities and individual interests have to take a back seat. However, the working committee set up by the GWW, which is dedicated to the theme of opening the PSI Show up to industry customers, demonstrates that this is not the case. I find this development really bad because it shows that one-sided interests are already being pursued within the GWW. The trade – the most important multiplier for the promotional products manufacturer vis-à-vis the industry users – already gave a clear no to the opening of the leading Düsseldorf show when it was put to the vote three years ago.
How significant is the merchandising market for your company?
Michael Hagemann: This is an important market for us, we even founded our own limited company, UniMerch Merchandising, for this segment. Since we have already been operating in this field since 1999, I can certainly say that “full-service merchandising“ is a very specialised playing ground – design, local presence, shop-fitting and store operations, retail trade, logistics, manpower and returns and exchange handling are called for here, to mention just a few of the tasks involved.
Did the compliance problems get worse in 2015?
Michael Hagemann: Yes, the compliance issues are an unending theme in big groups and public institutions: If one follows the principle of a prudent businessman, as the Hagemanngruppe has been doing since 1978, there are no advantages – neither for us, nor the customers. The joint success is the top priority, not the personal advantage of an individual. The promotional product is a gesture for expressing in haptic terms the most important word in language, the word “thank you”. Conveying gratitude in the form of gift is part of different cultures all over the world. Now, in the course of today‘s endless regulation one is trying to place a small thank-you costing up to 35 Euros or even up to 10 Euros on a par with bribery. In my opinion, the “System Compliance“ restricts reputable and merited managers, who on the one hand are responsible for corporate funds to the value of several millions, but on the other hand have to have a receipt filled out by the person expressing his gratitude for a “thank-you-for-coming-to-the-fair” item costing less than 10 Euros so that one is protected when it comes down to this theme. Shameful.
What role do sustainability and corporate responsibility play in the promotional products industry?
Michael Hagemann: e product developments in our industry on this theme speak a clear language: All around people are looking into the possibilities and technologies for developing sustainable products. We ourselves have proclaimed the year 2015 to be “Sustainability Year“ and thanks to the great support from our clientele it was one of our best fiscal years since the company was founded. Everyone wants to make a contribution and the customers even accept the fact that the products are a little more expensive as a result.
A responsible attitude when dealing with our employees is also an important aspect of corporate responsibility, which is a basic prerequisite for the economic success of our company. The value-oriented corporate culture in which every employee finds the ideal potential for individual development that fits in with skills he possesses plays a decisive role. Our employees highly appreciate a workplace that allows a reconciliation of family and work life. When cooperating with suppliers, we work together with reliable partners, who also take their social and ecological responsibility very seriously.
In this connection, I would like to touch on a sore point by mentioning the following example: If a single cap is cut, sewn and punched in the Far East in 23 work steps – i.e. by 23 employees – then both the importer and the promotional products distributor should know that. The user should also be informed about the production conditions of this cap that perhaps only cost one Euro. Because otherwise the customer, who is demanding sustainability and social responsibility is possibly also the customer, who awards the order for this cap according to the tendering system “the cheapest offer wins the bid”. In other words, corporate responsibility is also information transfer, because this is the only way the user finds out whether an article was produced in a socially responsible manner or not. Perhaps the end customer that shows no social responsibility will in future buy the caps from Primark, whereas promotional products importers and distributors have succeeded in achieving a price acceptability, which also allows the people in China, Burma and Bangladesh to enjoy a slightly better life. The current communication deficit affects the entire industry and would thus be an area of responsibility of the new general association – instead of setting up working committees to talk about end user fairs …
How did the year turn out for you?
Cornelia Kreitzberg: For me 2015 was the best year since the company was founded. Many passionate, successful projects resulted from the cooperation with my partner Andrea Benedela at Sono Cats Design. Three years ago we had to decide in which direction we intended to further develop Jack´s Gift Company: Cheap price competition or high-quality products? We opted for quality. Not only in the sense of our customers, but also in terms of the people, who manufacture the products. We place importance on the observance of social standards and favour European production. People who are looking for as “cheap” as possible, merely have to search the Internet. We deliver quality and stand behind our products. We rely on personal and individual consulting, value both classic products and trendy items and work in a target group-oriented manner. A long-standing, trusting and successful cooperation ensues with those people, who appreciate this approach.
Which requirements does a promotional products distributor have to meet today in order to be successful?
Cornelia Kreitzberg: One has to have extraordinary ideas, have an instinct for trends and thus always be a step ahead of the times. Design, creativity and industry know-how – that is the combination that leads to success. We have been observing the market development over the past years, we compile forecasts for the future and combine both with our intuition. The essential thing is to completely accommodate the wishes and needs of the customers and then steer the project in the best direction using one’s own potential. The ideas often mature over weeks. The product might be an item that only costs a cent or it could be a premium product. Industry cognitions are gained from experience, by studying the media and – increasingly more important – also social media. Visiting national and international trade fairs is an indespensable source of inspiration.
In 2015 you won a Promotional Gift Award for the snail, Dori. What significance does this prize have for your company and for your corporate communications?
Cornelia Kreitzberg: This prize is of special importance not only for myself, but also for my customers, the city of Solingen, as well for all people involved in the project: We are very proud of it. The award is, so to say, recognition for all the efforts, emotions and skills that turned the campaign into a success. I am especially pleased about it because the item is made in Solingen from A to Z. After proving successful among the end users, the expert jury is the highest authority for a judgement. And of course we communicate this too. This is confirmation for the customers and wins over the trust of new customers sooner.
How important is the merchandising market for the industry?
Cornelia Kreitzberg: Merchandising is a huge market with growing potential. Many companies want to get a slice of the cake in the meantime. In many cases, more money is earned with the merchandising products than with the film, event or music act itself. The marketing of major events (European/World Football Championships, etc.) can bring in very high yields in the merchandise area, but it is also very risky, for example if the national team gets knocked out earlier than expected. We don’t work in this area on this scale. However, I do belong to the event team of the magic lights event in the German town of Gräfrath, and in this connection we developed very successful light bags as merchandising items.
What requirements does a promotional products distributor have to fulfil today?
Karin Weinhandl: Customer-orientation and trustworthiness are still very much pre-requisites in our profession. However, a distributor always has to keep up pace with the times, because technologies such as smartphones, tablets or smartwatches are becoming more and more widespread. Thus, a basic understanding of technology becomes increasingly more important, especially regarding the IT sector. Overall, the distributors need to have a higher degree of specialised knowledge because the complexity continues to increase all the time. Furthermore, the user demands speed and comprehensive information on the products that he buys – in the meantime among other things sustainability also plays a big role here.
Can the industry do justice to this demand?
Karin Weinhandl: For our company sustainability is a central theme. So, of course, we are pleased that it has also become an issue in the promotional products sector. This will no doubt lead to a reduction in the amount of disposable items from cheap sources. We are also observing a greater willingness to implement reusable products as an alternative concept to disposable products. But there are also other great initiatives and further developments that we are glad to pick up on. We can also make an important contribution in our industry too.
Is the promotional products market becoming greener overall?
Karin Weinhandl: The industry talks a lot about it, but actually doesn’t do enough. Whereas we have noticed that the demand is growing strongly among the younger customer groups or in the event sector for instance, in other areas we are observing that a lot of groundwork is necessary in order to explain the corresponding situation to the customers. A good example is replacing plastic carrier bags with bio cotton bags that are produced in a sustainable way and which can be used again and again.
Is social commitment part of the sustainable balance for your company?
Karin Weinhandl: Yes, definitely. For us social commitment means making our contribution towards public welfare. This includes the environment and the framework conditions under which we want to live. Such basic values should be part of the overall responsibility of good entrepreneurs.
How did your turnover develop in 2015 in comparison to 2014?
Jörg Wardau: The fiscal year 2015 was very mixed. Whereas we registered a very strong growth in demand for notebooks and specials such as the Lanybook, for instance, individual orders of diaries came under extreme price pressure. Overall, we matched our previous year turnover in Germany. In the rest of Europe we didn’t achieve our targeted figures. Eastern Europe, particularly Russia experienced a downturn in business.
How important are the trade fairs that involve the users?
Jörg Wardau: In addition to the standard trade fairs such as the PSI, Paperworld and Newsweek, we also participate at the HAPTICA® live and at over 25 in-house shows. Especially events that involve the users are experiencing a boom. However, it doesn’t suffice here to merely take on a consultant or representative role; we offer solutions and carry out conceptual work.
We agree with opening up the PSI Show to users, after all other events have shown that it works. Why should market participants be excluded and why should an industry limit itself? The promotional products industry shows its efficiency and diversity at the PSI Show and presents itself as a reliable partner. The show wouldn’t be heading in a success-oriented direction if it were to remain introspective.
In spite of the triumphant march of digital media, diaries and notebooks are still popular. What is the reason for this?
Jörg Wardau: Diaries are our bestsellers, even if notebooks have caught up significantly. The rising demand for notebooks has something to do with the current zeitgeist. This is proven by many of the creative projects of our Ivory Line product group. It is about much more than just working materials – the medium paper is not old-fashioned, it is absolutely “in”. Whereby, in future the theme multisensory will accompany us increasingly more often. We address the different senses with covers, colours and claims. Special designs that can be amusing and outside of the box, lead to a better identification with the product.
Furthermore, we cannot escape the digital world, after all we have all long since become part of it. We are currently working on interfaces that enable real connections to the digital world to be made using analogue media. The biggest advantage of analogue media at the moment is for instance the fact that winning over new customers or the establishment of a brand always occurs via these media. However, the clear border between the real and the virtual world will continue to become more blurred. In this connection, new printing technologies and information media are called for. In future totally new attributes will be implemented here.
What are you expecting 2016 to bring?
Jörg Wardau: In view of the inconsistent cost development it is truly difficult to make a prediction. We are thus being carefully optimistic about the year 2016 and are expecting to make a slight increase in turnover.
What have your results been like this year?
Ralf Hesse: We have achieved a 5% increase in the revenue and in the turnover in the year 2015. In our opinion, something that keeps increasing further and further is the in some cases ruinous competition that hits the market with margins that amaze the serious traders among the distributors. Conversely, the customer is hardly willing to pay more for additional services such as consultation, samples, etc. The conclusion: Things won’t get easier!
Which requirements profile does a promotional products distributor have to fulfil in order to operate successfully on the market?
Ralf Hesse: Extensive market knowledge and openness in dealing with customers and supplier partners, of course. And he should know that selling by price alone has never helped anyone long-term.
What is your opinion about this year’s fusion between the individual German associations to form one general association, the GWW?
Ralf Hesse: I find it positive. Above all, I am hoping it will lead to a stronger representation in Berlin and a better portrayal of the distributor or consultant vis-à-vis the end user – something we definitely deserve as the number 2 in the marketing mix.
There is a working committee within the GWW that is lobbying for an opening of the PSI. Would an opening of the event be in your interest and how should one go about it?
Ralf Hesse: I am clearly against an opening of the PSI. Whom would it help? The large-scale industry players already find a way of visiting the PSI. And I can’t imagine that the normal end customer with an annual marketing budget of between 3,000 and 50,000 Euros, is interested in attending the Düsseldorf show.
In my opinion, the road show Newsweek is totally sufficient here. In this connection, it is however worth considering increasing the number of supplier partners, booking a bigger hall and staging an exhibition over two days.
Were there one or more significant product trends or themes in 2015?
Ralf Hesse: Not from my point of view. Naturally, there are always new trends, but these didn’t really have an impact on us worth mentioning.
You have carried out several reorganisation measures over the past years. What is the current state of affairs?
Christof Achhammer: We have been undergoing radical change for over three years. Especially during last year and the present year we have refined the newly developed structures and improved numerous background details in the interest of our customers – by all accounts most successfully: We have recorded very good growth rates on all European sales markets. The currently largest internal project will be completed by the end of the year and it will be presented to the general public at the PSI Show in mid-January next year. It is a complete new web shop, which we have developed together with our customers in order to be able to accommodate their needs in a targeted manner.
Which product and prinwaaaadting technology trends did you observe in 2015?
Christof Achhammer: Improved power banks that excel through their high performance and multi-functionality were very popular in 2015 and as such they were one of the focuses of our business. Fast delivery times are becoming increasingly more important too. We completed our digital printing test phase very successfully so that we will be able to offer this printing technique from 2016 onwards in high quality and thanks to excellent logistics also within a delivery period of 24 hours. Furthermore, the latter naturally also applies for almost all of the twenty printing technologies we offer in-house.
Were there any significant developments in the Far East this year?
Christof Achhammer: Our buying focus still lies in the Far East and no notable changes were observed there in 2015. We bundle our buying volume and work together with a few, established suppliers that have become long-standing, reliable partners, with whom we continually strive to improve the quality.
What are your expectations regarding the new German general association, the GWW?
Christof Achhammer: The new German general association is the chance for a new start. Now the promotional products industry can present itself as a united front. However, we shouldn’t rest on our laurels, but should instead think globally, i.e. in European terms, and intensify the cooperation with our industry colleagues all over Europe as quickly as possible, so that we can make sure our voice is heard in Brussels too.
What are your expectations for 2016?
Christof Achhammer: 2016 will be a great and interesting year with many positive changes – for both Mid Ocean Germany and the promotional products industry as a whole.
In your capacity as an Austrian promotional products distributor, what do you think about the merger between the individual German associations to form a general association, the GWW, which happened this year and beyond this do we need a European umbrella association?
Wolfgang Bosch: We take a very positive stance towards the united association, because the interests of the distributors and producers can be adapted to the market requirements much more easily, faster and in a more targeted manner within a single organisation. I also think that the resulting size means that the amalgamated association will have more influence regarding political and legislation matters and will be able to react faster to changes.
We are currently using the CSR certification system of EPPA. The association would definitely make sense if the European associations would use EPPA as their umbrella association and as an international service platform. Mitraco particularly profits from being a member of the international distributor federation, Ippag. For us the worldwide networking that the membership brings with it is worth its weight in gold. It keeps us informed in real-time about all changes worldwide, in fact we normally know in advance, what is coming our way.
How do you rate the relationship between the distributors and the suppliers?
Wolfgang Bosch: It becomes clear at events like our in-house show and the marke[ding] or during customer calls that we conduct jointly with our supplier partners that we can’t exclude the suppliers from the decision-making processes. We develop more and more projects in the presence of our suppliers, but we are aware which risks could arise. I have been working in the promotional products industry for five years and from the very start opening up the PSI Show to the industry has been a hotly debated, controversial issue. Both advocates and adversaries have plausible arguments. I think it is good that a working committee has been set up within the GWW – if it comes to the conclusion that the PSI Show is “allowed” to stay as it is. Promotional products manufacturers, who are seeking the direct route, will do so with or without the PSI Show. After all one can quite easily find out the producer or sales partners of an item online via its article number. One should “out” black sheep and bar them from the PSI.
In this connection, the German united association is precisely the right instrument to bundle the interests of all of the sector’s players and find solutions together.
What requirements profile does a promotional products distributor have to fulfil today?
Wolfgang Bosch: The basic requirements have changed drastically over the past ten years. It no longer suffices today to deliver products as cheaply as possible in order to survive successfully on the market. On the one hand, the quality demands and legal requirements have changed so that audits and certificates often decide, to whom the contract is awarded. On the other hand, in addition to the desired extra services – from the creation of a web shop, to the product development, through to warehousing – price sensitivity increases all the time.
Furthermore, speed is an incredible factor, which also affects our suppliers as well. In our company, we are required to process each customer enquiry the day it is received so that a quote can go out as soon as possible. This is often difficult, because we often have to wait one to three days for an answer from the European suppliers, whereas the Chinese partners are always much faster – this is also going to be a theme for the GWW.
Austria has qualified for the 2016 European Football Championships 2016 in France: Is the event having an effect on your turnover?
Wolfgang Bosch: This year football fan items were the top sellers. In general, the success of the Austrian football team is an additional pan-Austrian economic factor. Mitraco is the exclusive merchandising partner of the ÖFB (Austrian Football Association, editor’s note), which was an absolute side-line for many years. In this case the wait was certainly worthwhile. It is indeed an organisational challenge, but in the meantime the high demand for football fan items is having a positive impact on the turnover too. We are expecting a growth of between 5% and 10% in the conventional business in 2016 and now that Austria has qualified for the Euro, we are reckoning on a further 10%.
Which items are currently still the best sellers?
Wolfgang Bosch: We receive enquiries and orders for large volumes of power banks and selfie sticks, which I completely underestimated in China two years ago. I am equally amazed at the high number of notebooks that we sell in today’s era of iPads & co. As a result of our long-standing contacts to the Far East, we also receive novelties daily that we make available to our customers on an ongoing basis.
How did the fiscal year 2015 go?
Holger Hoffmann: We are relatively satisfied with the fiscal year 2015. The margins were under strong pressure at the start of the business year, due to the developments of the currency exchange rates. The turnovers have developed very positively over the year, which applies for both Germany/Austria and indeed for the entire group.
In the form of the New Wave brands you offer a complete range of promotional textiles. What trends are recognisable on the textile market? Which segments sell particularly well?
Holger Hoffmann: Notwithstanding trends, the basis for the promotional textile business remains to be a basic programme comprising of a wide range of articles and colours. Our different brands give us the opportunity to set seasonal product highlights.
Sustainability and social responsibility are themes that are gaining increased importance: Is this noticeable in the promotional textile sector?
Holger Hoffmann: Yes, this is extremely noticeable. New Wave has strongly invested in this area, out of a sense of responsibility for nature and society. However, in practice, I wish that much fewer enquiries for sustainable products ultimately would fall victim to the price factor. Sustainability at no cost is a contradiction in itself.
How do you assess the trade fair landscape of the promotional products industry?
Holger Hoffmann: We are very pleased that we will once again have the excellent opportunity in 2016 to communicate with our customers and potential customers at the Tech Style Visions in Stuttgart. Due to our sales policy, we are not interested in exhibiting at trade fairs that are also open to end customers. We prefer to support our sales partners for such trade shows.
Price? Availability to deliver and speed? Quality? Service offer? What are the most important sales arguments?
Holger Hoffmann: The decisive criterion is the simplicity and reliability of the ordering and delivery process, service is our top priority for the customers. The absolute lowest price is uninteresting. This simply can’t be united with a reasonable effort to achieve sustainability. A good quality/price ratio is what has to make the products attractive.
What are you expecting 2016 to bring?
Holger Hoffmann: I am counting on the continuation of our very positive business development. We have initiated several measures over the last 15 months, which improve the product portfolio and the service performance. This ongoing work is just starting to have an initial impact.
How has your turnover developed and what is your appraisal of the business year 2015?
Thomas Derhaschnig: Fortunately, the “save, wherever possible“ mentality has been replaced by a sensible and economically reasonable attitude again since 2008 and one has realised that the turnover drops if one doesn’t do any advertising. As such, 2015 showed very positive development and we are expecting to make a 16 to 18% increase in turnover. Of course, the profits don’t match the increase in turnover; the growing number of suppliers on the market and free services for the customers put pressure on the margin. We can only counteract this massive price pressure by offering full-service solutions and unconditional customer orientation.
Is haptic advertising firmly established in the marketing mix in the meantime?
Thomas Derhaschnig: The standing of haptic advertising is still underestimated in the cross-media marketing mix. Surveys on the advertising impact of promotional products are not communicated enough or are not taken into account because the promotional product area often doesn’t fall under the responsibility of the marketing department. We open up the eyes of our customers and demonstrate to them based on practical examples what science has long since recognised using consulting methods and workshops that we organise jointly with the Swiss company, PromoFacts. Haptic advertising won’t gain general acceptance until the subject is addressed when training people.
Did the compliance problems get worse in 2015?
Thomas Derhaschnig: We don’t see any problems here, because we placed great value on a respectful and transparent approach long before the official discussion got underway and have actively discussed the topic with our customers.
What can you say about the sustainability balance of the promotional products industry?
Thomas Derhaschnig: Finally, the theme of sustainability has also arrived in Austria and it is a subject that is addressed in every consultation. However, in most cases sustainability is not allowed to cost more, so the theme is often discarded again when it comes down to making the final decision. We were certified by EcoVadis, a sustainability assessment platform for global procurement chains, in order to show that only companies that operate sustainably will survive in the future. Of course, we regularly hold internal seminars and workshops for all employees, because our future alignment isn’t allowed to just stop at management level.
Is the fact that the Austrian football team qualified for the 2016 European Football Championships having a noticeable effect on your turnover and beyond this what role does the merchandising segment play?
Thomas Derhaschnig: The European Football Championships don’t affect our turnover, but the selection of the promotional products changes in the run-up to this event. Generally speaking, merchandising is a booming business. In order to respond to this area more efficiently, we have set up our own profit centres that specialise on specific professional groups. It is indeed a long drawn-out process to design merchandising products, but on the other hand these are long-term projects where one is very strongly integrated into the marketing processes. Furthermore, it is very motivating to co-experience the success of the customer after building up a brand.
Can you give us an example of this?
Thomas Derhaschnig: The organisers of the “Brunner Wiesn”, a beer tent event in Brunn am Gebirge in Lower Austria that is similar to the Oktoberfest in Munich, commissioned us with the task of developing and implementing a complete merchandising concept within the shortest space of time. The festival had already taken place for two years, but promotional products had never been implemented before. We started off by analysing the target audience, then we had to first choose and produce around 20 different items. At the same time, an online shop was set up to sell both the tickets and the merchandising items. Promoters were also implemented during the three-week event and a sales booth was positioned at the entrance.
What requirements does a promotional products distributor have to fulfil today?
Kaspar Benz: The focus has always been on flexibility, creativity and extensive product know-how. In the course of the globalisation – a profound knowledge of logistics and freight forwarding has become increasingly more important. Furthermore, today’s product safety law makes it essential for distributors to be well-informed about the respective laws and standards.
Compliance also plays an increasingly more important role for big companies. We are confronted with a lot more contracts than before, certificates and tests are often demanded and there are rules for accepting gifts.
How important are the promotional products associations for the industry?
Kaspar Benz: The promotional products industry is faced with major challenges, which means that strong associations are going to be very important. Unfortunately, many relevant market participants don’t see any point in the associations and keep away from them. Here, own interests are given priority over the interests of the industry, which is detrimental to all parties involved. Only strong associations that represent a large portion of the industry have a chance of being taking seriously among others by the politicians.
What do you do to convince industry customers about promotional products?
Kaspar Benz: The promotional product is treated like a poor relative by marketing magazines. That is why we launched our own promotional products magazine Promo Impulse – the magazine for promotional products decision-makers two years ago. We show the industry customers 28 pages of great ideas and implementation possibilities and what effects can be achieved.
What do you expect from 2016?
Kaspar Benz: We are very optimistic about the New Year. We “sowed” a lot of seeds in 2015, expanded our team – despite stagnant turnovers – and opened a subsidiary in both French and Italian-speaking
What are the challenges for today‘s distributors?
Axel Debruyne: Every distributor needs an added value instead of merely being a “carton mover”. Creativity, order following skills – e.g. having an own team close to the factories – good partnerships with suppliers, knowledge of products and European legislation or product liability are all important factors. At the next PSI, we will be creating a new network that distributors of different companies can join so that they can use our Far East team for their own purposes.
Did you face even more challenges in 2015 concerning the ban of promotional products in certain industries?
Axel Debruyne: It didn’t really have such a big influence on our Belgian company as we were not really active in the pharmaceutical industry. It did have an impact on our Chinese company though, because some distributors ordered from us for pharma customers, but as we are a flexible organisation we adapt easily.
What strategy do you follow to convince end users of the necessity of promotion products?
Axel Debruyne: Very simple! We make them smile, by showing them something funny. Or present case studies with convincing results. We show our customers that you can achieve a lot even with a small budget.
I think it is important for us to show that our products are a communication item, which is just part of the media mix like newspapers and magazine ads, TV commercials and billboards. We need to present our sector to the end user in a positive way, show the necessity and the power of promotional products. This is why the Belgian association, BAPP is trying to introduce the term “Product Media“. We really hope other countries will follow suit and most of all that our members will support this measure 200%. BAPP can create a framework, but the majority of the work should be carried out by the advisors and suppliers. I hope the term Product Media will help here. Even if it is only a name, it should be a mindset.
How important are trade shows that are directed towards end users like the PromGifts?
Axel Debruyne: For Special Things, a fair like Prom Gifts is really important for attracting new customers. Although it is very difficult to convince end customers to visit the show, at the end of the day our balance is always positive. So, we will not change our strategy and will always be present at this kind of event.
You are also the Chairman of the BAPP. What are the most important tasks an industry association has to fulfil?
Axel Debruyne: Giving as much legal help as possible is the most important issue in our industry, since we deal with so many different products and legislation becomes stricter and stricter all the time. I would like to cooperate with other foreign federations to install a professional desk that can help distributors with basic questions. We have a lot of shared information already, but many companies, especially the big players, try to protect their knowledge. I think the time is not ready, we first need to restart a new EPPA, but after that this should be one of the goals of this association.
Another important point is defending and promoting the industry. An industry association needs to tell the outside world a positive story, supported by all of its members. Promoting our industry includes having a good trade show. We decided to organise the PromGifts on our own in 2016, but we are already talking with new partners for 2017.
Furthermore, since our industry is an international business, we need to build bridges across the borders. At the moment, EPPA is not successful, but I hope something new will emerge soon, because we really need each other. The BAPP tries to convince as many national associations as possible of the necessity of an association like EPPA.
Last, but not least an industry association can help its members learn from each other. It is always easier if you know each other and if a problem arises to talk with each other as humans. In this respect, we have already made good progress.
How did the year 2015 go?
Gunnar Sprinkmann: We are expecting our turnover and margins to be more or less the same as last year, but we need a higher number of orders to obtain the same result.
Has the standing of the promotional product among the users improved over the last years?
Gunnar Sprinkmann: Yes, the importance of the promotional product in the marketing mix has constantly improved among our major customers. Anyway, the promotional product is already the preferred instrument among the smaller companies.
The GWW has been constituted as the new general association of the promotional products industry. Will the industry gain more influence as a result? What are the most urgent tasks of the united association?
Gunnar Sprinkmann: The “new” association will certainly now have more influence and one must use this to achieve that all advertising measures are treated the same and to strive to remove the restrictions against the promotional product.
Are you noticing the effects of the stricter provisions of the compliance policy of many companies?
Gunnar Sprinkmann: We have only perceived in a few cases that individual projects were not able to be realised as in the past. However, this only has a slight impact on the overall turnover.
How do the promotional products distributors and agency have to align themselves in order to be successful? Are new business fields emerging?
Gunnar Sprinkmann: We have to listen carefully to the customers to find out what is important to them and what they intend to achieve with the implementation of promotional products. And then several ideas always have to be developed, presented and discussed so that the ultimate strategy can be devised jointly with the customer. The necessity for new business fields should initially be replaced by adopting a broader alignment.
What was your most interesting order this year?
Gunnar Sprinkmann: To gradually check the sustainability of the promotional products of a customer and then replace them with products made out of recycled materials and by those which are produced and shipped under CO2-neutral conditions. And this project is also ongoing next year…
You have been operating as the Sales Director for SPS in the German-speaking zone since January 2015. How has the turnover developed?
Manfred Nieder: The interest shown by our customers has grown enormously and at the moment the increase in turnover both percentage-wise and in actual figures is very satisfying. SPS and our new subsidiary, Highprofile, which is also a very successful plastic manufacturer from England, exclusively use raw materials from Germany and Europe for the German, Austrian and Swiss market. The items are mostly produced in England and a small percentage of the production occurs in Europe – this philosophy is in line with the current zeitgeist. Our products go down well and we think that we will continue to be successful. The positive business development is reflected by a larger exhibition stand at the PSI Show 2016, which we will use as a powerful presentation platform together with Highprofile.
What do you think about the merger between the individual associations to form a general association, the GWW, which took place earlier this year?
Manfred Nieder: We welcome the merger, because it provides the opportunity to push lobby work in Berlin and show a greater presence in Brussels. We hope that it will further strengthen the collaboration within the sections, that smaller discrepancies and discussion points will be solved and that the branch pursues the goals that affect all sections alike as a united front. We have to take the opportunity to support each other because only a strong, joint association will allow our voices to be heard in the corresponding economic and political circles in future. Of course, the collaboration with other European associations is also imperative here, because Europe is more important than ever.
What do you do to convince industry customers about promotional products and how important are trade shows that address the users, like the HAPTICA® live for example?
Manfred Nieder: Neither SPS, nor Highprofile sell directly to end customers. SPS has always operated according to this principle and with the buy-out at the beginning of 2014, when the senior management team of SPS bought the company for 7.25 mil. British pounds (approx. 8.72 mil. Euros, editor’s note) from the 4imprint Group our actions spoke louder than our words.
The contact to the industry customer is of course extremely important, because it enables us to get a direct feedback about our products and allows us to gather new ideas and inspiration. In this connection, we use the HAPTICA® live, which in our opinion is a very important meeting point for both the trade and the users and which attracts an enormous amount of attention due to the good press work. Beyond this, we exclusively meet up with the end customers at diverse in-house fairs of our customers or at the Newsweek.
What is your opinion about the efforts to open up the PSI Show to end users?
Manfred Nieder: In addition to the already existing trade shows that address the end customers, purely internal events where we can concentrate entirely on our distributors are also necessary. It is almost impossible to win over promotional products distributors as new customers, if the end customer is trying to catch our attention one metre away. We need the PSI Show, the GWW Trend and various roadshow tours for this purpose.
What was the craziest enquiry you received over the last twelve months?
Manfred Nieder: The craziest enquiry was for a coffee mug in the form of a toilet. Unfortunately, due to the quantity required and the budget available this project didn’t materialise. But I find the idea cool and extremely unusual.
How was 2015 for your company and for the Turkish industry in general?
2015 was one of our best years – we expect to achieve a turnover increase of 20% compared to last year. Unfortunately, Turkey in general had a major turbulence in its economy, mostly originating from having two parliamentary elections in a row within the last five months. When you add the psychology of uncertainty starting from two months before the first election, more or less half a year passed under economical stress. The strong Turkish Lira lost a great deal of value. Plus, we had the Syrian refugee crisis: More than 2.5 million Syrians fled to Turkey from the dangers of civil war. I could add quite a few more parameters. Under such circumstances, promotions were not a top priority for most of the players on the market.
So, why has it still been a good year for Tekpar? The answer is simple: Based on 27 years of experience, we have learned to change according to the existing conditions like a chameleon and adapt to the new surroundings quickly. So, we focused on exporting Turkish-made plastic promotional products, which we successfully use in our local promotional campaigns and which we started exhibiting at the last two PSI fairs. We concentrated fully on the big multi-national, fast-moving consumer goods companies as they have to do promotions to survive. Plus, we also pushed the textiles business, especially corporate wear: Even companies, who don’t do promo campaigns, still need corporate clothing for their employees!
What are the challenges for today‘s distributors?
Finding new products as quickly as possible, finding producers that the competitors can’t reach, getting better prices due to better financial and personal relations, providing good and quick service to customers, using technology and virtual media the best possible way and keeping your team as fit and dedicated as possible.
How important is sustainability for the promotional products industry?
Recycling is becoming more and more important since many promotional products have a short life-cycle. Moreover, since they are produced in really big amounts, their potential of harming nature in case of being produced without universal standards can be quite high. Also, we must not forget our social responsibilities while producing such products.
Was there a significant product trend in 2015?
Since people spend more and more time with their smartphones and tablets, the need for energy is significant and therefore power bank sales are booming. USB sales are still ok. However, people also love to get promotional items that somehow they have to pay for in real life. That is why kitchen and bathroom utensils, useful gadgets, textiles and food will continue to be significant product trends in promotions for 2016.
How important are industry associations for our industry?
As long as they help the industry make the cake bigger for all members, they are very important and useful. If they get drowned in bureaucracy, act too slowly against threats and turn out to be an arena where members mostly try to show each other how great they are, they will vanish soon.
What do you expect from 2016?
For Turkey it will be year of rehabilitation and reconstruction, getting the previous borders back. After the elections, we will hopefully achieve stability and this may create a wave of optimism towards 2016. There weren’t too many campaigns in 2015, almost everyone suffered some market loss. Many companies will start promotional campaigns again in 2016. There is also a great chance for exports, since Turkey has a reliable industry that produces good quality products, provides quick deliveries and has well-educated people that understand what you want and who are getting better and better in achieving the certifications that the EU demands.
What is the significance of sustainability for the promotional products industry?
Bas Lensen: Despite the fact that our industry is just starting to acknowledge the importance of sustainability, it was one of the most commonly used words this year. The complete industry seems to be involved in sustainability programmes, auditing factories and certificating products. However, the customers’ demands do not seem to match this. It seems that our customers and the end consumers are not well-informed or not willing to see the importance of sustainability.
For Toppoint, sustainability is an integral part of our processes. Before we add a product to our collection, we first check if it is in line with our sustainability goals. Unfortunately, we still see a lot of customers choosing the cheapest alternative. That is why we try to select products that are sustainable and still have a good price tag, so the customer doesn’t have to choose.
How do you define Corporate Social Responsibility?
Bas Lensen: Our vision of CSR is consistent with the definition of the United Nations. We want to deliver functional products, which have a long life and which are made with a minimal environmental impact and under good working conditions for all employees in the supply chain. We have chosen to audit our factories according to the BSCI guidelines because we believe in their strategy. Apart from the audits, the participants benefit from training and workshops to improve their knowledge. We are convinced that merely telling people what is wrong isn’t the right way – you also have to explain why it is wrong. Knowledge is the only way for people to improve their work and working standards.
What is the situation like in the Far East with regards to sustainability?
Bas Lensen: More suppliers are aware of the standards that we as European companies demand from them. The quality of the products is not only getting better, but factories are much more developed and they pay more attention to the social compliance standards.
Are there any alternatives to China at all?
Bas Lensen: There are always alternatives, but you have to compare the different components – quality, costs, flexibility, capacity etc. At the moment suppliers in China can offer the best mix of these components for a lot of products. However, we are very proud that 50% of our collection is produced in Europe, which is a good alternative to China.
The PSI has initiated a sustainability competition this year: the Sustainability Awards. Is this a good approach?
Bas Lensen: The Sustainability Awards are a step in the right direction, but as long as one can only win if one also pays, we are asking ourselves what additional use these awards will actually have. How can an award – as the PSI puts it – be conferred to the best of the best, if the whole market doesn’t take part in the award? If we want to bring our industry up to a higher level, we should distance ourselves from having to pay for a higher level. On the contrary, the best of the best should be called forward and nominated so that others can take them as a role model.
Apart from sustainability – was there a significant product trend in 2015?
Bas Lensen: We experienced a lot of new sales in electronics, but also our collections of pens and bags keep increasing.
One didn’t hear a lot about the ailing EPPA in 2015 – do we still need a European umbrella association?
Bas Lensen: What we need is an umbrella association that strengthens our industry. One of the tasks should be to carry out market research on the industry to provide input on its sales, marketing and purchase policies, while at the same time creating partnerships for the industry to participate in. Keeping this information up-to-date would give companies value for money for their membership fees.
This year Präsenta Promotion bought back the company shares of Bastei Lübbe with the result that the company is completely family-owned again. What other events have characterised the year apart from that?
Thomas Herriger: Buying back the company shares was definitely one of the most important steps this year, even if we certainly didn’t regret the decision regarding Bastei Lübbe’s participation in the company. But, of course, I am delighted that the company is back in family hands. Also beyond this, the year 2015 took on a thoroughly positive course for Präsenta: The reorganisation of the company into five autonomous business units is showing initial success and we were able to win over several new customers over the past months. So, I have every reason to continue looking ahead to the future with optimism!
What exactly does a promotional products distributor have to offer today in order to be successful?
Thomas Herriger: The market develops continually and with it also the demands of our customers. Ideas “out of the tin” are no longer required, each customer has his own, individual needs. With our five independent units – full-service, industry, creation, print and logistics – we can offer precisely that: Tailor-made measures that optimally support the marketing strategy of the respective company – indeed in precisely the areas that the customer happens to need them. This could be in the form of a customised ballpoint, an overall promotional products strategy or an appropriate web shop. And since in the meantime all of disciplines are interlinked in a cross-media manner, it can only be of an advantage for us as a promotional products distributor to align ourselves as broadly as possible.
Which marketing tools do you use to convince the industry customers about the impact of haptic advertising?
Thomas Herriger: Our first in-house show was a total success. That is why we are already busy with the preparations for the “PRÄSENTAtion 2016“, which will be staged at our premises in Haan again on April 28, 2016. Even if the last “PRÄSENTAtion” unintentionally turned out to be a real “cracker” due to a World War II bomb being discovered, we will of course do our utmost to make sure that the next show has a memorable effect again.
Other trade fairs are also interesting for us as an opportunity to meet up with customers, suppliers and industry experts and convince them of our expertise. The latter works best via personal contacts, which is why this aspect is still particularly important for us. And, of course, every promotional product has a totally different impact if it is presented personally.
Furthermore, we also realigned our distribution and communication strategy last year. Because even in the field of haptic advertising, the digital world becomes increasingly more significant. This is why we offer our customers an online shop with over 60,000 items and are in the meantime also active on social media channels such as Facebook or Twitter.
The theme innovations. How important are novelties for your customers and how do you engage in product scouting?
Thomas Herriger: Innovations are a very important theme – both for our customers and for ourselves. Naturally, classic promotional products are still very relevant and go down well, but in order to stand out among the masses, companies are always on the lookout for innovative and unseen products. And let’s be honest: It is fun surprising people with extraordinary gifts.
At Präsenta we deal with the theme trend scouting in two ways: On the one hand, we attend many trade shows ourselves in Asia and America and inform ourselves by reading trade magazines and in exchanges with our suppliers about trends and innovations. On the other hand, we work closely together with our cooperation partner in Hong Kong, who not only has locations in five countries, he also has a worldwide trend scouting programme. This enables us to recognise trends at an early stage and react to them accordingly – whether in the form of the appropriate products from our suppliers or a new product development.
Did the compliance problems get worse in 2015 in your experience?
Thomas Herriger: I wouldn’t say the compliance issue has got worse. But the theme does continue to become more important in terms of the social aspects. Here, we and the customers are equally responsible. In this connection, we have been a member of the Business Social Compliance Initiative since 2014, which asserts itself for the improvement of the working conditions worldwide. But the demand for sustainable and ecologically produced items increases more and more. However, a new way of thinking has to take place: Sustainable products have their price, but very few customers are prepared to pay it.
You have in the meantime been operating on the promotional products market with mood rooms for two years. What is your résumé so far?
Clemens Hübschmann: mood rooms exclusively represents famous specialised trade brands from the household, kitchen and lifestyle sectors. As a start-up in this area we were able to increase our turnover very fast. Among other things this is due to the fact that all of the B2B items of our brands are presented in a neutral general catalogue, which went down very well among the promotional products distributors.
We feel that the industry’s mood is very positive at the moment, even though the margins are under pressure. We too have to meet the pre-defined price with the brand item. However, due to our wide entry-level price segment this is no problem for us.
Which items were en vogue in 2015?
Clemens Hübschmann: The bestsellers in 2015 were all items to do with the theme the “masculine” kitchen. The main focus here were knives, graters and mills. This trend is expected to continue in 2016.
There is a Working Committee within the German association GWW, which occupies itself among other things with opening up the PSI Show to end customers. What is your opinion of this?
Clemens Hübschmann: We are very positive to an opening up of the PSI Show to the end users. Not in order to push the theme of direct marketing, but rather because it would give us the opportunity to introduce our brand ranges and the application options of our products in the haptic advertising segment to the industry customer personally. Essentially brand items need a more customer-specific presentation and more explanation than conventional promotional products. Since diverse major customers have always had access to the PSI Show via various channels – whether in the form of own membership or by being passed on tickets by promotional products distributors – the medium-sized companies should also be given the opportunity to attend this event. They can be invited by the PSI itself, whereby a collaboration with the promotional products trade would be desirable.
To what extent do you currently communicate with the end customer?
Clemens Hübschmann: We have been convincing and advising end customers since our company was founded in the form of participating at the in-house shows of our distributors. In our view this is an ideal way of communicating our brands directly to the industry. In our opinion the HAPTICA® live is also a suitable platform, which we will use again in the coming years.
Is the demand for sustainable products increasing?
Clemens Hübschmann: In the case of brand products, the theme sustainability is taken for granted and is thus not explicitly demanded. All of our brands already have the corresponding certifications and “made in Germany“ remains to be a coveted seal of approval.
What are your expectations for 2016?
Clemens Hübschmann: We are expecting to record a further increase in the industry’s interest in implementing strong brands as advertising media in 2016. Particularly in connection with the theme sustainability, a greater emphasis should be placed on durability, stability and quality.
What is your résumé for the year?
Lutz Hanbückers: Business is good, we have got plenty to do, but the customers are still not exploiting the potential that the promotional product holds. We have noticed that more and more “last minute” orders are placed and that there is hardly any long-term planning for company-specific special designs. Furthermore, there is a blind belief in the results of the advertising-sponsored Google search.
Which developments are influencing the industry the most at present?
Lutz Hanbückers: I would like to describe it as the “Internet-based“ mutilation of the opportunities and would like to give an example of this: In Germany there are over a hundred importers and without doubt more than a thousand distributors, who offer the commonly used “power bank” – in some cases with logo uploading options and as custom-made designs. Many marketing directors waste their time researching hundreds of web sites instead of commissioning a good advertising agency to find a solution suitable for their budget.
In this way, favourably-priced products are allegedly purchased without any knowledge of their market background or calculating one’s own personnel costs so that ultimately valuable potential is wasted.
Is the theme sustainability become more important for the promotional products industry?
Lutz Hanbückers: Sustainability was always important. I would however claim that people pay too much attention to certifications rather than addressing the theme seriously. A USB stick in a wooden case made out of sustainably forested wood that contains cheap electronics inside still soon ends up as electronic waste that is harmful to the environment. We are one of the few printing networks in Europe that is actually allowed to certify its printing results with the “Blue Angel”. But what use is that if the customer doesn’t use certified shipping packaging or receives feedback from less than one in a thousand due to bad address quality or boring designs. This is why I recommend that my customers place special emphasis on the personal address and on tailor-making the design to suit the needs of the recipient. This enables us to achieve a response rate that is up to 30 times higher than the industry average. This is really sustainable and makes resources available so that promotional products can be designed in even higher quality.
In 2015 you won a Promotional Gift Award with an innovative calendar mail. What significance does this prize have for your company and your corporate communications?
Lutz Hanbückers: Receiving the Promotional Gift Award 2015 was confirmation of our team’s successful work in self-marketing. As a result of the abundant coverage we have acquired corporate customers and qualified media service providers, whose interest we hadn’t reckoned with because our focus lies more on medium-sized companies and distributors.
What are you expecting/hoping the new general association to bring?
Lutz Hanbückers: I only place hopes in the new association, not expectations: Essentially it is the exchange on and promotion of the common interests of the brand name companies, importers and consultants in order to ensure that promotional products remain tax-deductible as operating expenses like other forms of advertising – and that the current tax exemption limits are increased. A further important topic is the limitation of the regulation frenzy of the German authorities in order to avoid excesses such as in the product safety law, which lead to disadvantages within the free trade.
There is a Working Committee within the German association GWW that is occupying itself with opening up the PSI to end users. Is this in line with your way of thinking?
Lutz Hanbückers: I have been in favour of organising a promotional products show for end users, similar to the to the PSI Show in January for years. It should take place in April or May so that the industry has the opportunity after the trade fair to order special imports for the year-end business on time. Industry and trade shows should definitely be held separately so that the exhibitors can professionally serve the different customer interests. I believe opening up the PSI to the end customers is contra-productive. The professional agencies, who continue to lose more and more of the business to direct suppliers, will be the ones who lose out. A development that has already happened in our printing industry would be the outcome: In favour of a few major suppliers, companies would die out, which would ultimately harm all market participants, because it would put pressure on the trade margins.
How is your résumé for the year 2015?
Karin Dicke: Fortunately, much better than we estimated at the start of the year. We will have achieved a notable increase in turnover by the end of the year.
What requirements profile does a promotional products distributor have to fulfil in order to be able to assert himself successfully on the market today?
Karin Dicke: For me being successful long-term means that one feels obliged to follow the principles of a reputable businessman. In our industry, creativity, reliability and the necessary portion of exquisiteness are also definitely important.
You became a member of the promotional product association DIE 6 this year. What incited you to enter this partnership?
Karin Dicke: A strong buying association and the exchange among colleagues is an extremely useful competitive edge. The enquiry tool offered was a further argument that convinced us. We intended to develop something similar for a long time already, but the day-to-day business always took priority. Furthermore, as a long-standing member of WAGE, we have made the best experiences with information exchange and the use of synergies, so we know that everyone profits from a good cooperation.
How important do you think the merchandising market is for the promotional products industry?
We have been active in this segment of the market for a long time already. We developed the merchandising collection KA300 this year for the city anniversary of Karlsruhe. Our biggest merchandising project so far was the merchandising for the culture capital, RUHR.2010. The fascinating thing about such a task is: One can develop something totally new, where the creativity knows no limits.
Speaking of innovation: How important are novelties for your customers?
Karin Dicke: I don’t think the novelty factor alone is what makes a promotional product excel, the story behind it has to be right too. Technical innovations have their charm of course, but the objectives of the customer have to remain the top priority.
What was the “most unusual” assignment that you carried out in 2015?
Karin Dicke: That was definitely Karlsruhe. We produced a collection comprising of good 50 products within the shortest space of time, whereby we kept the focus on “Baden”, which was certainly a challenge for a company that is located in the Ruhr district. Moreover, we had no experience whatsoever in advance as far as volumes and local taste were concerned. We have since heard that the offer went down so well with everyone that the project is to be continued next year too.
What is your opinion of the merger between the individual German associations to form a general association, the GWW, that took place this year?
Ronald Eckert: I consider the merger between the individual associations to form the GWW to be a very positive measure and totally in line with the times. I am sure that this will give the industry a much better chance to make sure its voice is heard within the German advertising industry and to convince the players of the industry of the effectiveness of the “haptic” marketing tool. There are many tasks that the association has to tackle – just one example is namely the fact that the promotional product is not treated equally compared to other forms of marketing. Furthermore, the association will have to solve themes such as compliance regulations and other points that place growing demands on all market players, with its united efforts. Of course, this will only be possible if all cooperate and actively participate in the work of the association.
Do we need a European umbrella association beyond this?
Ronald Eckert: As a result of the ever-increasing relocation of national policies, regulations and guidelines to Brussels and Strasbourg it would be practical to forge a joint umbrella association for the promotional products industry. We need EPPA or a comparable institution. Of course, all of the individual associations have to be involved and the local interests have to take second priority behind the joint interests.
Back to the GWW. You are a member of the Working Committee for Trade Shows within the association, which among other things is occupying itself with the opening up of the PSI Show to end users. What is the current state of affairs?
Ronald Eckert: Together with the PSI and colleagues from all areas of the promotional products industry, a coherent concept for the future alignment of the PSI Show has been developed. I didn’t and still don’t consider opening up the PSI Show to end users as being totally unproblematic. On the one hand it is the trade show for our industry and this is where the promotional products consultants gather their necessary input for the entire year. On the other hand, it is a totally professional platform and a kind of shop-window for the promotional product. And this shop-window should be opened up to end users – in a controlled way. The mechanisms necessary for this were discussed at the meetings of the Working Committee for Trade Shows and worked out until ultimately a final concept came together. As a representative of the industry, the GWW has been given the unique opportunity to fully co-participate in the concept of the PSI and I believe that good use has been made of this opportunity.
What developments were there on the compliance front in 2015?
Ronald Eckert: The compliance issue intensified further in 2015. The users paid even more attention to not exceed the 10 Euro limit because items under 10 Euros are often deemed uncritical. Furthermore, since more and more companies are forbidding the implementation or acceptance of advertising gifts, I fear that the compliance problem is going to get even worse. We are endeavouring to counteract this situation at least to an extent by explaining to our customers that nobody can master the situation single-handedly. The efforts of the entire promotional products industry are necessary here.
Was there a significant product trend in 2015?
Ronald Eckert: Primarily, all forms of power banks are extremely popular. Due to the exorbitant increase in power consumption of modern smartphones, power banks have become popular assistants for the much-courted target group. Furthermore, one observes that the offline media are being linked to online media more and more frequently. This includes the augmented reality segment – whereby the opportunities that this technology offers have by no means been exploited yet. Of course, classics such as writing instruments or coffee mugs are still very popular and are of high practical value. Due to the kindling discussion of a possible ban on disposable coffee-to-go mugs, a new trend towards reusable solutions made of porcelain or plastic could no doubt arise next year.
What is your résumé of the sustainability situation within the promotional products industry?
Ronald Eckert: The promotional product can be sustainable! However, I am not able to assess whether the sustainability awareness of the industry is as advanced as proclaimed in many places. The demand for sustainable promotional products that have been produced in a socially responsible manner will no doubt increase further. However, it is not possible to provide these at no extra cost and one needs to explain to the promotional products users that sustainability and social responsibility cost money – however the money is well invested in the future of us all. Companies that show social and sustainable commitment, are perceived more positively as a rule and haptic marketing is all about a positive image. This is why it will become increasingly more important in the future to show social commitment and constantly check one’s own sustainability performance.
For you personally, it was your first year in the promotional products industry. How did it go?
Peter Stelter: It was a really pleasant start in a new world. I have noticed that a family-like atmosphere prevails as well as an open approach towards both the customers and our market participants in general. I never experienced this in the over 20 years I spent in the IT industry. However, the promotional products market has changed and undergone further development too. With the result that the theme IT is becoming increasingly more important here as well and the processes are changing. PF Concept is a leader in this segment and offers its customers convincing services.
How did the fiscal year 2015 go?
Peter Stelter: We are very satisfied with the current business developments in 2015 and are “on target“ as far as our growth course is concerned. This applies for both the turnover and for the margin, which has nevertheless come under pressure due to the currency fluctuations, which meant that price adjustments even had to be introduced during the course of year.
PF Concept carried out reorganisation measures over the past years: Are these completed now?
Peter Stelter: We have carried out several adjustments over the past years, changed and redefined processes. The measures carried out allow us to meet the needs of our customers even more efficiently. Furthermore, we have a professional sales team that maintains close contacts to the customer. Even if the automation of the processes is unstoppable, business is still ultimately done between people. Customer bonding is very important to us!
The users are taking more and more short-term decisions: Will speed become one of the most important competitive factors?
Peter Stelter: Definitely! The theme availability and the related fast delivery are of decisive importance. This particularly applies for the customising of the products too. We offer a one-day express decoration service called “SureShip“, which our customers highly appreciate. And this is not only offered during the Christmas period, which never fails to surprise a lot of people.
What significance do sustainability and social responsibility have?
Peter Stelter: Sustainability and social responsibility are very important for us as one of the leading international promotional products suppliers and for our partners. Our conduct codex obliges us to act in a sustainable, ethical, legal and socially responsible manner towards people and this planet and we also demand the same from all of our suppliers. This is the only way we can check that the products we offer are produced by staff for instance, who are paid fairly and treated with respect and who work in a safe and healthy work environment.
In order to ensure whether our suppliers adhere to all of these demands long-term, we regularly visit their production sites. In addition to the internationally approved certifications, we carry out our own systematic and comprehensive appraisals, during the course of which we carry out both social compliance audits and environmental compliance audits.
What are the most urgent tasks for 2016?
Peter Stelter: We also have ambitious goals for 2016 and will strive to achieve further growth. We intend to achieve this via the label business with the brands, Elevate and Slazenger. With a host of new styles we will offer the customer a fantastic line-up, additionally upgraded by further, new customising techniques. The further development of our latest partnership with Oppenhejm & Jansson will be an additional focus. We intend to turn this into a further success story. Their plasters, reflectors and first-aid products offer enormous potential – for us and even more so for our customers.
And the most important thing: As a multi-specialist, we want to offer our customers an ever-improving service – if possible from one source. We will thus continue responding to the needs of the customer as accurately as possible
For you personally, it was your first year in the promotional products industry. How did it go?
Spranz celebrated its 50th anniversary this year. How did the anniversary year go for you?
Lorne Spranz: 2015 really was a very special year and in retrospect we are a little bit proud of the long, successful and sometimes also turbulent times as a family company. That is why we festively kicked off our anniversary year with our customers and partners at the PSI at our gourmet stand and put together a fantastic year with many highlights. Overall, the trend has emerged that much greater efforts are required to further develop the turnovers positively and consistently, whereby the margins are under extreme pressure and this will continue to be the case – for example in the segment of “commonly used items” such as power banks. Here, our own ideas and developments certainly help us stand out from the masses. The year-end business has long since not played the significant role that it used to in the early days of Spranz and varies extremely from region to region. It seems to become less and less every year, the orders are distributed more evenly throughout the whole year.
What is the situation in the Far East? Were there any significant developments in 2015?
Lorne Spranz: The Far East is undergoing such rapid change that it is very difficult to predict what the situation will be like in five years’ time. The economic further development is stagnating in China, the wages are increasing dramatically and the restrictive family policy is having negative demographic consequences. Whereas for our part the demands in the products are increasing immensely, which requires a high degree of precision and strict inspections. It is therefore a big challenge to successfully develop and manufacture products. That is why we are very grateful that we can rely on long-term partnerships that enable the mutual further development and interventions in the production.
You cooperate with my climate and transport all goods in a climate-neutral way. Does the market demand and reward sustainable management?
Lorne Spranz: We have decided to completely (over)compensate the effects the globalisation is having on the transport, to assume responsibility towards the following generations, customers and our environment. This also includes the implementation of certified climate-neutral green electricity supplied by Lichtblick and the reinvestment of money in plots of land in the rain forest in order to counteract the deforestation. Above and beyond this, we strive to implement and support more environmentally friendly processes at our production sites, among others things through avoiding waste and the implementation of more eco-friendly materials. Our customers hold these conclusive arguments in high esteem.
How do you assess the relationship between the suppliers and the distributors?
Lorne Spranz: We have heard a lot of different opinions on this topic and are observing strong efforts to open up the distribution channels. Regardless of these efforts, one must quite clearly state: We exclusively see the distributor as our partner on-site at the customers and we believe in team spirit. We develop attractive ideas and safe products and our partners use their know-how and commitment to present these to the customer. As long as we are successful following this approach, this will remain to be our chosen distribution channel. We gladly advise industry customers at in-house shows or visit them together with the distributor – but customer service and follow-up lies in the hands of our distributors.
What are your expectations for 2016?
Lorne Spranz: Strict market surveillance controls, stricter laws, product safety, licensing issues, high demands regarding the quality and the price as well as the changing buying and sales markets: 2016 will no doubt be an exciting year. However, because we feel we have done our homework and that our customers are strong partners, we are looking ahead to the New Year optimistically. For this reason we have decided to continue our gourmet stand at the PSI as a revival and are inviting all customers and partners to join us for a glass of champagne, sample some wine and enjoy delicious snacks – because for Spranz in addition to reliability, the mutual exchange of ideas and of course enjoyment are all part of a partnership. And that has been the case for over 50 years!
How did the business year 2015 go?
Heinrich Grübener: We recorded an average, but satisfyingly stable result for the business year that was on a par with 2014. The margins are currently still under pressure – with a slightly negative tendency. The strong bundling of turnovers as a partner of the sales and marketing alliance, DIE6, definitely had a significantly positive effect on our company.
How does one have to be aligned in order to continue to operate in a future-oriented manner as a promotional products agency?
Heinrich Grübener: It is going to become difficult to assert oneself successfully as an individual company in the light of the increasingly tighter markets. We are therefore glad to be a member of a strong group that can react to current market changes much faster and more flexibly than individual market participants. This safeguards our consolidated market position sustainably and significantly reduces the generally increased competitive and price pressure that the company is under. I am convinced that cooperations offer decisive advantages in tougher market situations and furthermore also secure the survival of a medium-sized consulting company. Other industries have also demonstrated that this strategic direction is certainly viable.
Has the standing of haptic advertising improved among the users over the past years?
Heinrich Grübener: Not in our opinion. The industry definitely has to do more to position the promotional product as an important element of modern marketing concepts. Unfortunately, in the past the associations were more occupied with themselves instead of doing something for the market. We are placing high hopes in the recently founded general association, the GWW. DIE6 always asserted itself for a general association and ultimately the realisation thereof is thanks to DIE6’s activities on the market.
What are the pressing tasks that the GWW has to occupy itself with?
Heinrich Grübener: First of all, the association has to find itself, in order to be able to steer the work proactively in the right direction. We think the most urgent tasks are to ensure a less bureaucratic procedure for the implementation of promotional products, in concrete terms the raising of the limits for the record-keeping requirements and the taxation. Furthermore, due to the false interpretation of the compliance requirements, a vehement dismissive attitude towards promotional products is beginning to creep into the minds of the decision-makers. An explanatory campaign is urgently required here.
On the topic of compliance: Are you feeling the effects of the ban on promotional products within the pharmaceutical industry?
Heinrich Grübener: It is certainly not going unnoticed: The restraint within the pharmaceutical industry is immensely limiting the cooperation with regards to the implementation of promotional products.
What is your stance on trade shows where the suppliers present their products directly to the user?
Heinrich Grübener: In principle, it is desirable for the suppliers to present their products to the market. However, only if clear rules are adhered to, which allow the consultants and the suppliers to work together on a partnership-like basis. It has always been part of DIE6’s strategic alignment to work the market together on a partnership-like relationship instead of generating additional rivalry amongst each other.
Which product trends stood out last year?
Heinrich Grübener: Storage media such as USB sticks, power banks and technical products in general are still extremely popular. Furthermore, there is an increase in demand for items in the price segment up to ten Euros.
How did the year 2015 go for you?
Frank Groß: We are very satisfied with how the business year developed overall. As in the previous years, we were able to significantly increase the turnover for writing instruments and the margins remained stable. Our export share in the promotional pen segment is currently approx. 50%. The main growth was achieved in Germany, Austria and Switzerland as well as on the Asian market. Eastern Europe showed negative growth due to the political situation. The effects of the transparency code of the pharmaceutical industry certainly had an impact. However, with the help of numerous marketing activities and new, innovative products we succeeded in winning over additional customers and segments in the individual markets so that we are able to more than compensate for the losses among the pharmaceutical customers.
Schneider produces its pens in Schramberg. How important is the “Made in Germany“ label?
Frank Groß: “Made in Germany“ is definitely a quality criterion which has enjoyed an ever-increasing demand worldwide over the past years. In many markets the end consumers are – to a certain extent – prepared to pay higher prices for a product “made in Germany“. Refusing to produce in cheap-labour countries is the expression of an attitude, which Schneider lays great importance on. In particular, this enables us to secure the observance of the demanding German ecological and social standards and allows us to guarantee the high quality of our products.
Talking about ecological standards, Schneider is EMAS-certified. Are such efforts receiving an increased amount of recognition on the market?
Frank Groß: All in all, it is nice to see that people in the promotional products industry are starting to occupy themselves with the theme of sustainability. Our e-bike fleet, for example, may only be a small element of our environmental management, does however vividly demonstrate that our company is not just interested in producing “green” products, but that our commitment extends across all areas of the firm. As a result of the extensive press coverage on this campaign, the general public became aware of our environmental management. In this connection, we are very pleased that the people appreciate our continuous efforts. With the current flood of ecological seals and terms it is, however, very difficult for the consumer overall to distinguish between honest commitment and greenwashing campaigns. Schneider counteracts this by communicating everything in a transparent manner. We invite our customers to visit our production sites and our sustainability report documents our measures in a very transparent way and in figures. Unfortunately, in many cases the end customers still attribute more priority to economic arguments than to ecological aspects when making their purchase decision.
What are your expectations for 2016?
Frank Groß: Last year we occupied ourselves intensely with the individual markets, our partners and the different target groups and we integrated the findings that arose from this into a new, coherent communication concept, which focuses on the USPs of our company and products. We are now very much looking forward to presenting our new alignment for the promotion sector to the public for the first time at the PSI Show. Beyond this, we also further developed our internal processes in the course of 2015 so that we can respond to the manifold market demands even more quickly and flexibly. We will also present new attractive offers that arise therefrom to our trading partners at the PSI Show. Against this background, we are planning to further increase our turnover in the coming year.
Faster, faster, faster
The digital technologies are undisputedly at the top of the list when it comes down to printing innovations that have revolutionised the embellishing of products. Digital printing already provides excellent printing results in many product areas and it is merely a question of time before nearly every product can be digitally customised and personalised – and this within the shortest possible time, in the smallest volumes and at much lower costs than are possible using conventional methods. The printing technology with its speed and rapid innovation symbolically stands for the speed that is becoming more and more significant in all areas. The world seems to be rotating faster – all of this year’s interview partners agree on this point. Instantaneous reactions and communications as well as speedy order processing, individualisation and delivery, but also in terms of the product innovations are becoming decisive competitive factors. “Agility is crucial in all areas. In the ‘click’ era, you have no chance if you are not quick” (Xavier Marin, Gamax). “Customer enquiries have to be processed the same day, so that a quote can be sent out as fast as possible” (Wolfgang Bosch, Mitraco). “Most of the orders we receive are wound up within two to three days – time is a decisive issue” (Marcin Pawłowski, badge4u). Almost all big importers have invested a lot of money and time in expanding their ultra-modern printing centres over the past years, so that they can deliver goods from stock within 24 hours or within a few days. ECommerce platforms like Amazon are becoming a standard for the industry – and in some cases also even competitors.
Of course, the suppliers whose products are manufactured in Europe have a clear advantage in this connection, especially since the price differences between the Far East and Europe are continuing to decline: “The labour costs in China have increased at an above-average rate. The Euro depreciation and the strong RMB have further fuelled the price increases – with the result that many products can be manufactured cheaper outside of China” (Marcus Sperber, elasto form). Naturally, this doesn’t apply for all product groups by a wide mark – for many production techniques China still holds the monopoly when it comes down to know-how and infrastructure and the other cheap-labour countries can’t compete here. Nevertheless, in the meantime even classic importers are relying on a mixture in sourcing their products: “At the moment suppliers in China can offer the best mix of components like quality, costs, flexibility or capacity for a lot of products. However, we are very proud that 50% of our collection is produced in Europe, which is a good alternative to China” (Bas Lenssen, Toppoint).
The buzzword “sustainability”
Searching for functioning supply chains in Europe doesn’t just happen due to time-saving and quality issues – China can at least offer the latter – but in many cases because ‘Made in Europe’ is one of the buzzwords in the debate about more eco-friendly and socially-responsible promotional products. “Sustainability” in all its – in some cases unclear – facets and controversially discussed contents was also a key issue among the industry in 2015. The mega trend sustainability has conquered the promotional products industry – and many companies are indeed pushing a host of initiatives at a highly professional level and with a serious degree of commitment. “Everyone is contemplating the possibilities and techniques of developing sustainable products. We have actually declared 2015 to be ‘Sustainability Year’. Everyone wants to make a contribution and the customers even accept the fact that the products become a little more expensive as a result” (Michael Hagemann, Hagemanngruppe). In this way, the industry is reacting to the pressure from the outside.For many suppliers sustainability is no longer voluntary it has become an obligation. “My most interesting task this year was to check the sustainability of the promotional products of a customer and replace them with those that are made out of recycled materials and which are produced and shipped with a neutral CO2 balance” (Gunnar Sprinkmann, Uwe G. Sprinkmann).
In spite of many without doubt good approaches and initiatives: It is still a very long way until we have achieved a really sustainable promotional products industry. When one takes a closer look, in the case of many users the call for sustainable products turns out be no more than greenwashing and part of a compliance policy that in some cases takes on absurd facets and which leads to promotional products being branded as items of bribery. “Compliance plays an increasingly important role for big companies. We are confronted with a lot more contracts than before, certificates and tests are often demanded and there are rules for accepting gifts” (Kaspar Benz, Pandinavia). “Customers and industry behave very differently, through to the extreme example of the pharmaceutical industry. It is a shame that a middle course can’t be agreed upon” (Karin Weinhandl, kw open).
So, once again in 2016 the aim is to promote the image of haptic advertising among the users. Those, who think this is predominantly the task of the associations as representatives of the industry, will fall short of the mark. At the moment there is no functioning, European umbrella association that could form a strong lobby in Brussels – EPPA was shrouded in silence in 2015. There are indeed positive impulses on a national level – for example the fusion of the individual associations in Germany to form the general association GWW. However, when it comes down to moving the industry forward, the cooperation of each individual is required. “We need to present our sector to the end user in a positive way, show the necessity and the power of promotional products. Associations can create a framework, but the majority of the work should be carried out by the advisors and suppliers” (Axel Debruyne, Special Things).
Many distributors have already realised this and are intensely underlining the USPs of haptic advertising to their customers. Furthermore, many suppliers are also expanding their communications to include the users, not however to push direct marketing, but in order to get the push/pull mechanisms working. Against this background, those trade fairs that address industry customers such as the HAPTICAR live in Germany or the PromGifts in Brussels are becoming more popular and more readily accepted. Opening up the PSI Show – in whatever form – to the users of promotional products is also currently being discussed within the GWW. It is still too early to speculate what concrete form this should take on. Yet, the current debate about the market structures is just one of many symptoms for the fast-moving and rapid change that has characterised the year 2015. And one thing is sure: Things are certainly not going to get comfortable in the foreseeable future. It can be taken for granted that the world affairs will have an even stronger impact on the industry than before and, as every year, the balance at the end of 2015 is: Development is ongoing and whoever wants to keep up pace, primarily needs one asset: flexibility. Fortunately, the promotional products industry has frequently proven that flexibility is one of its strengths.