The,Impact,the,Recession,Sales business, insurance The Impact of the Recession on the Sales of Promotional Pens
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Not only has the current recession impacted heavily on the advancedeconomies of the world, we are now seeing that emerging economies suchas China, Vietnam, Brazil and Argentina are also suffering, primarilybecause their exports in general are significantly down on previousdecades. Here we look briefly at how the recession has affected thesales of promotional pens and printed pens in both the western worldand China.Promotional pen manufacturing in both the U.S. and Europe began todecline approximately in 1999 because of lower manufacturing costs inChina. Changes were quite slow in the first five years as Chinese pens,in terms of style, finish and functionality were greatly inferior towestern standards. In the following five years there was a significantincrease in exports from China and the reasons for this is covered in aseparate article 'Why Promotional Pens are not made in the West AnyMore'.Since the beginning of the recession that began in early 2008overall sales of promotional gifts was in steady decline as company'smarketing and advertising budgets were slashed. Whereas overall saleswere down in some western countries by as much as 60% some productlines were affected much more than others. Generally speaking, the moreexpensive promotional items saw a greater reduction in overall volumethan budget promotional items. The reasons for this were twofold.Firstly, companies that traditionally used promotional pens or printedpens for marketing and advertising were able to continue with theirspend because the outlay was relatively low. Secondly, many companiesthat traditionally bought expensive promotional products switched tocheaper ones such as pens to carry their advertising message and thisstrategy allowed them to keep their volume the same but as the unitcost was significantly lower, the overall spend was dramaticallyreduced.The impact that the recession has had on China should not beunderestimated. After ten years of perfecting the processes involved inthe manufacture of promotional pens,the Chinese now dominate the world supply of promotional items ingeneral and pens in particular. Promotional Pen factories, the size ofsmall towns emerged in Shanghai and Ningbo throughout the early part ofthe twenty-first century, many with several thousand employees involvedin manual assembly. The amount of labour required was so great thatworkers were shipped in from other regions to meet western demand. Alabour crisis was emerging in these two regions by late 2007 and wagesbegan to rise sharply. This was a golden period for that region ofChina and it seemed that it would never end. The banking and moneysupply problems that the west encountered from early 2008 onwards,however, resulted in a sharp decline in demand for promotional pens andpromotional items in general and this had a catastrophic effect onemployment in the industrialised regions of China. Workers that wereoriginally shipped in from remote areas were sent home with no prospectof returning. This had a devastating effect on rural communities andcontinues to be a great worry for the Chinese authorities as they areever conscious of civil unrest. Many large Chinese companies involvedin the manufacture of promotional items have now closed down with noprospect of reopening.We are increasingly living in an interdependent world and thecurrent recession has certainly highlighted that fact. We have seen theeconomic effect the recession has had on global markets and manybelieve this is a temporary affair before we instinctively revert tounabated levels of consumerism once again. Only time will tell! Article Tags: Promotional Pens, Printed Pens, Promotional Items
The,Impact,the,Recession,Sales