Promotional Products in the US Industry Market Research Report from IBISWorld Has Been Updated
The industry will get a boost during the economic recovery, when improvements in corporate profit and sentiment are expected to create renewed demand for promotional products; though, growing competition from low-cost manufacturers that deal directly with clients will force operators to differentiate themselves by using greener materials in their products or by increasing their web presence to enhance client interaction. For these reasons, industry research firm IBISWorld has updated a report on the Promotional Products industry in its growing industry report collection.
Los Angeles, CA (PRWEB) May 06, 2013
The Promotional Products industry has turned the corner following the financial crisis, posting gains in the past four years. In 2013, industry revenue is expected to increase 0.4% as marketing budgets expand and the industry benefits from new promotions as consumers begin to spend again. Nevertheless, IBISWorld estimates that industry revenue will fall at an annualized rate of 2.1% to $13.7 billion over the past five years as a result of a decline in media expenditure and the loss of a key downstream market. According to IBISWorld industry analyst Austen Sherman, in 2009, pharmaceutical companies introduced self-imposed rules prohibiting the distribution of non-educational promotional items, removing themselves as industry clients. This loss, combined with decreased advertising dollars, drove revenue down 14.5% in 2009 because the pharmaceutical market had accounted for 11.0% of industry revenue.
The majority of industry revenue is generated through the distribution of specialty advertising products. Operators specializing in this service do not manufacture products; they purchase “blanks” from industry suppliers and customize them according to client needs. “Unfortunately, industry globalization has made it easier for clients to go directly to the manufacturers by making overseas factories more accessible to end buyers, allowing clients to bypass industry firms altogether,” says Sherman. In addition, consumer safety laws, such as the Consumer Product Safety Improvement Act of 2008, have increased the cost of insurance and product testing. These trends have caused the Promotional Products industry to experience some consolidation and pushed some firms out of business; industry enterprises have declined at an average annual rate of 1.8% to nearly 7,000 companies during the five years to 2013. Office-supply store Staples became the industry’s larger operator during the past five years following its acquisition of Corporate Express in 2008.
The industry consists of a large number of small, niche operators that focus services on local and regional markets. Recently, industry concentration has increased marginally due to some firms being acquired or leaving as a result of a poor operating environment. One reason for the low concentration is the localized nature of many services provided by the industry. This includes window dressing services and mannequin decorating. While it does account for the largest share of revenue, the production and distribution of advertising specialties is the only service that is often completed on a large scale. As a result, concentration is expected to remain low throughout the five years to 2018.
As businesses begin to expand their advertising budgets, the industry will benefit from a move toward more integrated advertising campaigns. With audiences becoming more fragmented, clients are being forced to diversity their marketing efforts. In addition, promotional products expose a user to a brand or product name throughout their use, making them more cost effective than a magazine or television ad that may only be viewed once. For more information, visit IBISWorld´s Promotional Products in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry provide promotional products, such as key chains, magnets and pens. They also provide a variety of advertising-related services, including promotional product distribution, sign lettering and window dressing. This industry does not include: advertising agency services, public relations agency services, media buying agency services, media representative services, display advertising services, direct mail advertising services and marketing consulting services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation´s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2013/5/prweb10706348.htm