While the world’s top fashion designers were displaying their spring collections in Paris last month, building materials group Tarmac was considering ways to promote its own snappy clothing range.
Two years ago Tarmac received a new corporate image and now has an on-going working relationship with merchandise company Brand Logistics. Between them they have created a range of promotional items from clothing and stationery to model toy vans and sports bags in a bid promote all Tarmac’s activities not just its road building arm.
The company is involved in a range of public sector work and Brand Logistics has spent months analysing Tarmac’s overall marketing strategy to see how merchandise can help to get a broader brand message across. Among the ideas it is considering is whether Tarmac should follow the example of two other companies in the construction sector, Caterpillar and JCB, and create a branded clothing range that could become a retail designer label. Brand Logistics has even created a sub-brand called Mac specifically to promote the garments.
“Clothing is only part of a complete merchandise range that is designed to appeal to Tarmac’s core customers, mainly in local government. It would like to get into retail but we must be sure this is right for the brand and that the market has not been saturated by Caterpillar and JCB. We will spend the next six months looking whether to go down the licensing route or to sell the brand exclusively through one chain. It’s still possible we will ignore retail completely,” says Brand Logistics director John Knight.
A relationship as close as the one Brand Logistics has with Tarmac is not unusual nowadays. Blue chip companies know that the quality of the promotional items they distribute reflects on their business. They want to distance themselves from the throw-away gift market where cheap pens handed out at exhibitions run out of ink within days or the logos on poor quality t-shirts fade after the first wash.
Instead they are asking merchandise companies to design, source, store and supply a full range of quality promotional items that can be used alongside other marketing initiatives to convey their brand’s core values or, as in the case of Tarmac, completely overhaul a tired corporate image.
There are only a handful of merchandising companies servicing this end of market because worldwide warehousing and distribution facilities are needed to offer the comprehensive global service that many large companies demand.
For the brand, the one-stop-shop approach can bring substantial cost savings. It means marketing teams in different territories do not have to order items themselves, which is rarely cost-effective because of the small volumes involved. Instead they contact the designated merchandising company which has sourced in bulk and items are delivered to an exhibition or a corporate event such as a golf day within 24 hours. One invoice is raised itemising where the orders came from and which products were chosen.
The trend of using an outside company to create and source merchandise became popular during the last recession when brands needed to focus on their core businesses. Staff numbers in many marketing departments were cut and those who remained rarely had time to design or replace a range of promotional items. With the threat of recession looming once more, companies are again talking to third party experts to see how merchandise can be used as a cost-effective marketing tool, especially if one of the brand’s aims is to build a global image.
The large merchandise companies that enter on-going business relationships with brands will demand they have a say in the client’s overall marketing strategy. They will expect clients to be open minded about new creative ideas for their logos or corporate livery and will want to work with a brand for months before a range of promotional items is finalised.
David Long, sales and marketing director of promotional merchandise company Dowlis, says his team is sometimes expected to know more about the brand than the in-house marketing department. “Clients are surprised by what we can achieve for them using promotional merchandise, but they must allow us to have a fresh creative input,” he says.
Andrew Bourne, managing director of Bourne Publicity, says his company becomes an extension of a client’s own marketing team. “Blue chip companies want a more sophisticated service so we must understand the brand’s position in the market and where it is looking to go. We will often spend days with a client discussing the brand’s needs. The actual gifts may be the last thing to be selected because the quality of the material or the question of how the logo should be incorporated to appeal to the target market are more important,” he says.
For merchandise companies commissioned to work alongside an in-house marketing team, the process of designing, sourcing and ordering promotional items can take up to 16 weeks.
Martin Varley is director of Bemrose Corporation which owns promotional products supplier Incentives Two. He says his staff will initially spend four weeks researching a client’s industry. “We will then hold touch and feel sessions using non-branded products so the marketing department can tell us which items they love or hate. A range is defined and photography arranged for the catalogue. We ensure the approval process is not held up by giving everyone in the chain a strict time plan for each stage,” he says.
Incentives Two was asked to design the merchandise range for British Airways when the airline changed its corporate identity, which included removing the Union Jack from the tail designs on its aircraft. BA knew this was a controversial move and staff at Incentives Two were sworn to secrecy and had to ensure that no details of the new designs were leaked to the press before BA launched its revamped corporate identity in June 1997.
“There were lots of locked cupboards and rooms and security men all over the place. We even set up secret print shops and there was only two places where the artwork existed, with us and at BA’s in-house design department,” he says.
BA’s global profile meant Incentives Two had to source more than 200 new items including French boules, traditional Japanese games, hand-woven tartan rugs from Scotland and soap stones from Kenya.
For other companies the product mix tends to be more focused. The most popular products sourced by Incentives Two are clothing, which accounts for 27 per cent of its global business, writing materials, and leather goods, such as wallets and folders.
“Local tastes must be taken into account when deciding on a range for a global brand. The marketing teams in some countries, such as the US, want big logos on clothing while others, such as in the UK, want something more subtle. You have to be skilled in choosing the right designs, colours and the correct volumes,” says Varley.
For some merchandising companies the task of keeping track of local trends and fashions and new sources for product is made easier using the services of International trade body The World Advertising Gift Exchange (WAGE). Based in Zurich, this non-profit making organisation was formed in 1958 and is today represented in 20 countries and has 22 active members, including Bourne Publicity in the UK. Members meet on average four times a year at a number of trade shows including the PSI Show in Dusseldorf and the Hong Kong Gift and Household Fair.
WAGE regulations state that only one company from each country is allowed to be represented although two companies from Germany are included because they were founder members while two new firms from the US have been invited to join because of the size of the US market.
WAGE secretary, John Waser, says the strict membership rules allow for maximum co-operation between companies. “It means no information is withheld because of a conflict of interest. Members exchange details of the best supply and delivery channels, for instance,” he says.
While promotional merchandise can be used as a tool to raise awareness nationally and internationally it is also useful to promote a brand at one-off events.
Sponsorship and marketing consultants Karen Earl created a merchandising range for Silk Cut which was sponsoring the British entry in the 31,600-mile Whitbread Round The World Yacht Race. The sponsorship fitted the brand’s marketing objectives perfectly because sailing appeals to young, aspirational consumers. The race also attracts considerable amounts of media coverage.
Items sourced were mainly clothing but also included a Silk Cut Zippo lighter and a silver-plated key ring. The design of the garments was agreed by the crew and promoted before the race through the Crew Clothing retail chain and at various boat shows. More than 20,000 items were eventually sold, with the most popular being the fleeces which cost 75 each.
“All the merchandise created a following for the British team, right down to the 9.95 key ring,” says Karen Earl director Alison Moor.
Special events director for Gallaher, Jim Elkins, said he knew a quality merchandise range would lock the Silk Cut brand into the race. “The sailing market is like golf because people like to wear branded clothing long after the sponsored event. For the race, the size of the logo was important; it had to be larger on the crew kits to be seen by the TV cameras while for the replica merchandise it was more subtle,” he says.
Mainstream brands are realising that merchandising is an important part of brand positioning and are increasingly using it alongside other marketing activities to get their message across. It is a road that companies looking to change or enhance their image, such as Tarmac, are eager to follow.