Corporate gifts are important when it comes to marketing communication mix. In the corporate world, gift giving is a double-edged sword. If you are able to use it in the right manner, it will serve as a valuable means to strengthen the relationship with the primary employees and customers. It will also in creating goodwill, promoting the company’s business, and fostering new relationships. A gift that is appropriate and properly timed is one of the best ways to convey a crucial message.
Giving gift is pretty complicated. As a matter of fact, gift giving is a form of art as shown by several tips, rules, and guidelines that are offered in literature. Even though people perceive incentives and gifts as sales promotion too, it is an integral part of marketing communication mix. Its supports and synergizes other promotional activities.
People tend to forget verbal communication but if you give out gifts with the company logo then it will serve as a reminder of the company. Thus, it will help them to decide in your favor. With time, companies are becoming aware of the increasing importance of maintaining and developing long-term relationships with the clients and the customers. Corporate gifts are good for motivating people who sell and build up relationship with the important customers.
Corporate Gifts: Definition and Classification
A corporate gift can be anything starting from a stationery item to an all-inclusive Caribbean holiday for two people. The types of gifts that you can use are simply limited to your imagination. There is a report that states that there is a difference in between incentives and corporate gifts. A gift is presented as a corporate gesture in recognition of the business conducted. It is also offered as a part of the business to business promotion. On the other hand, incentives are schemes or products that are relatively of higher value. It is generally used for rewarding the staff or existing business customers.
Companies that want to buy business gifts or incentives will be able to choose from a wide range of items. These can be placed in three different categories on the basis of their value and purpose. The first category is the give-away. These are usually lower in value and high in volume. Moreover, these are also less personal and used for promoting the company’s name. The second category is standard gift which are suitable for almost all occasions. It is available in a wide range of prices but is perceived to be of higher value. The final category is the category of luxury gifts. These are high in value and low in volume items. It addresses an individual and carries a lot of prestige.
Even though corporate gifts and incentives have become crucial within the marketing mix, it is still a subsidiary part of the much-larger sales promotion sector. As many companies do not have the budget particularly allocated to a promotional activity, it is important to but an exact gift within the budget.
Business Gifting – Areas of concern
There are three primary issues when it comes to corporate gifting. The first problems are related to marketing. This means the role and the purpose, the recipient, and the budget. The second problem is the practical considerations which includes choosing the right gift and giving it at the right time. The third and the last problem are related to the ethical aspect. This includes how to give out gifts overseas and how you will differentiate them from bribery.
The first thing that you need to do when you plan on giving corporate gifts is to define its role in the marketing communication. If you are able to use it properly, it will be able to reinforce and supplement other elements in the mix.
a. Advertising : Corporate gifts offer a better tangible reflection of advertising budget. This is a useful for advertising the business to the recipient. As a matter of fact, this is a cost-effective supplement to mainstream advertising.
b. Public Relations: Corporate gifts will help in increasing awareness through the creative impact and target ability. Corporate hospitality events can be used for encouraging personal communication.
c. Sales Promotion: Corporate gifts can accelerate the buying decision, acceptance of new service, and speed of introduction. In fact, it will make the customers act faster they would in your absence.
d. Personal Selling: Corporate gifts serve as a reminder to the customers of the company long after you have completed personal selling. As people forget verbal communication, the gift will serve as a reminder of the company.
Your next decision should be to set a clear objective that you want to achieve. The common objectives include, appreciating the customers, creating brand awareness, improving company image, and promoting new product and services. It also helps in motivating your staff. Corporate gifts are like business investment.
Businesses give gifts to build on the foundation of reciprocity theory. This theory states that giving gifts will create a sense of obligation to return the favor. Corporate gift giving aims on maximizing their potential in stimulating the customers feel rewarded for their past business.
Moreover, it tactfully encourages them to continue doing business with them. The recipient and the giver enter into a social of recognition, expectation, and obligation. Social debts are created which help in developing the relationship. It leads to the creation of social debts which help in the development of the relationship. Thereafter, the recipient repays the giver who then turns out to be the recipient with a social that he/she has to pay back.
The more the two parties interact in this manner; the closer will be the relationship. In the world of business, these social debts can be transformed into loyalty building. With time, this will lead to an increase in business from the clients.There appears to be a gap in between theory and practice when it comes to using business gifts as a door opener for generating sales and cultivating new contacts. Here are some guidelines that will warn you against associating gifts with your future sales or any such activity. There is a theory that suggests that if gift giving involves obligation then it is bad manner. You should not present a gift with strings attached. The problem is with the role and objective of a gift. If you are presenting a gift to create goodwill, it should not be attached with any obligation. However, if giving gifts is a part of the sales promotion then it should be associated with future sales and carry some sort of obligation.
Giving or Not Giving
Gift giving might not always be the best way to maintain a business relationship. There was a company that used to send an annual gift to its clients. However, it later found out that the clients wanted improved customer service or bigger discount than a simple gift. Thus, it is necessary to understand and deliver what the customers really want. There is no use spending money on a gift that the customers will not approve of.
Logo or No Logo
One of the primary reasons to give out corporate gifts is to make the clients and the customers remember your name. A truly corporate gift is given to a company instead of an individual. In majority of the cases, a corporate gift is a personal gift and the recipient is generally a person. Opinions are divided on if a corporate gift should be customized for carrying out the company name. You will come across various guidelines regarding the customization decision. This primarily depends on the purpose, value, and type of gift and also the type of recipient.
The primary principle in corporate gift giving is appropriateness. The recipient should perceive the gift as an appropriate for the relationship in between the giver and the taker. This is because if you choose the wrong gift then it might do a lot of harm to your business. Whether the gift that you have chosen is appropriate or not will largely depend on its type and value. It will also depend on the context and occasion of gift giving.
Types of Gifts
Whether the business gift the right one has to be decided by the recipient and not by the one who is giving it. Gift for top customers and suppliers tend to be always traditional merchandize. People often give gift vouchers to their staff. Even though stationery and china gift are still very common, studies have shown that electronics and computer related objects have become pretty popular in recent times.
There is some obvious difference when it comes to gift preference between men and women. The most common items that women tend to prefer are flowers, plants, travel, audio/video equipment, and food. However, some of the common items that men prefer are money, travel, computer accessories, tools, and audio/video equipment. The least popular item among men is fragrance, while that among women is tool.
More important than the gift is the thought that you have put into it. A meaningful but inexpensive gift is always more preferred than a pointless but lavish one. You have to choose corporate gift with sensitivity and care. Gifts are personal. There are some items that are considered to be personal.
If you have to give a personal touch to your gift, you can include the recipient’s name of the gift. This is more important if they use a gift on a frequent basis. Personalized gifts are more memorable and creative.
Occasion and Timing
When it comes to corporate gifts, the timing is pretty important. This is because it will influence the recipient’s decision making process. The timing is dependent on the internal and external factors. The common occasions to give corporate gifts are promotional events, trade shows, Christmas, Diwali gifts and company anniversaries. The occasion might vary from one country to another.
Ethical and Cross Cultural Issues in Corporate Gifting
Corporate gift giving tends to be a grey area. However, there is a thin line between illegitimate corruption and legitimate corporate gifts. It is said that hospitality and gifts should only be given if it is consistent with the customary business practices. It should not be of excessive value and must not be construed as a bribe. There are some companies that have specific guidelines when it comes to giving and receiving gifts. These employees state that their employees will be able to accept a gift if it is of a nominal value. However, the term nominal is subjective. If the corporate gift to be inappropriate for the situation, relationship, or recipient then it might do more harm than good.
A good way to ensure that corporate gifts are not perceived as bribery is to check that the cost is within the budget. If the value gift is within the guideline then it will prevent the ethical risk of gift giving. The problem of gift giving being perceived as a bribe arises when you give gift across boundaries. Thus, there has to be a mutual understanding in between the giver and the receiver. What the gift represents will largely be deduced by the members of the exchange.
Gift giving is an important part of a culture and it might have some pitfalls. In Europe corporate gifts are generally given on special occasions. Each and every nation has a distinctive value system and culture when it comes to business gift giving. What is acceptable in one culture might be unacceptable to another. If the gift sends out a wrong message then it will be embarrassing for the host, as well as the recipient. Moreover, this might have far worse consequences.
Thus, when you send out gift in an international market, it is important that you get to know the codes and rules in details. This way you will be able to govern the gift giving and receiving in foreign cultures. For instance, there are some cultures, where the ceremony of gift giving is more important and filled with meaning than the gift itself. You must understand the culture of the recipient to avoid making any kind of costly mistake.