Executive Summary

Professionals in the promotional advertising business are always challenged with new competition and products surfacing on the market. The field has grown exponentially in the last decade, and as a result of this growth, a major problem has appeared with the efficiency of suppliers and the confidentiality of the Advertising Specialty Industry (ASI). New ideas emerge daily and the possibilities of problems are high if distributors, suppliers, and end users are not on top of technology in the industry. These problems could include transporting to an incorrect location or late arrivals. The failure to recognize new technological advances in the industry causes efficiency and confidentiality problems. Even though this trade is based on creativity, originality, and fast-paced work, caution is also crucial, particularly in issues related to distribution. Efficiency and confidentiality balance each other in the business. If the distributor is not confident with the suppliers’ choice on how to run things, then efficiency on both sides is hard to come by. This is a problem with global significance, but the effects are greater on small business distributors. Ten years ago this problem would be insignificant because the industry was so small, but with drastic expansion of the industry, there is no more time to put this problem aside. Problems like this could be minimized if a strong code of ethics were enacted. Promoting confidentiality would be good business for all involved. Suppliers get too much work if the middleman (distributor) is cut out of the picture. This occurs when an end user gets through to a supplier without help from a distributor. Altogether, the distributor is by-passed, while the end user does nothing but cause confidentiality problems between the distributor and the supplier. The end users are the only ones that benefit when the distributor is by-passed. The most effective way to enhance the productivity of the suppliers is to acknowledge the purpose of the distributor and make laws that keep the ASI number the sole source of contact between supplier and distributor.

Introduction

At the present time, the ASI number is given to each new member of the Promotional Products Association Industry (PPAI). This number recognizes one as a member (now distributor) of the industry and allows that member to directly contact suppliers to receive their products. This is a system that is well organized and has worked well in the past by meeting the needs of distributors. However, there is a growing problem behind all of the organization in this numbering process.

The industry has grown so much in the last decade that confidentiality is now a major concern for everyone in the industry, especially the distributor. Technology has gone rampant with the help of computers. The computer, a major component of promotional advertising, has opened new doors for the industry. An advertising agency can organize all information about clients and suppliers, while also acknowledging new items on the computer to stay ahead of the changing field. The shortcuts provided by the computer are also accompanied by reoccurring problems. These problems include overly detailed web sites from suppliers and less communication between distributor and suppliers. Confidentiality is broken when the end user gets too much information from the computer and by passes the distributor.

In 1986, Joe Segel, founder of the ASI, came up with a numbering system to identify industry suppliers and distributor subscribers. Ten years ago a majority of ASI listed suppliers had a line name that was completely different from their corporate name. The supplier only revealed a line number and an ASI on their catalog. Therefore, distributors felt confident in giving a supplier’s catalog to clients. As the years progressed, many suppliers changed their corporate name to their line name, and the new corporate name was printed on the cover of the catalog, along with their ASI number. The supplier began to add letters in the catalogs with pictures of their staff and factory locations. This made it possible for anyone to have access to a supplier. The supplier began to insert a “tear off” sample order form with confidential information located usually in the middle of the catalog. Noticeably, the suppliers were getting less concerned with confidentiality, or in some cases, downright greedy. The problem is now out of hand, and it is time to respond. Again, confidentiality was desecrated because the end user was beginning to get too much information from the supplier, when the information was supposed to be for the distributor.

Various Solutions

Now, the latest “wave of progress” has been to print supplier web sites on catalog and promotion sheets. Why is this a problem? According to Barbara Lespesa, there is “no problem if the site is “confidential”; however many of the web sites offer the visitor a distributer in the area” (Laspesa, 1999).

The competition between distributors would cease to exist under these conditions. Some supplier web sites list their addresses, phone numbers, customer service people, etc. These sites are not for “distributors only.” They actually ask the visitor to email them. The web site asks for the visitors name, address, and phone number. What happened to the confidentiality of the ASI numbering system? The supplier should remember that the distributor is their customer too. “Many suppliers are caught up in the web site frenzy and are going in all different directions” (Lapses, p. 4). This causes mass confusion within the market. Suppliers are now hassled with new problems, and the distributor has no job. The web, in this case, is seen to cause more problems than it alleviates. “When suppliers are rapidly moving to the World Wide Web with few guidelines and a wide variety of ambitions, it’s reasonable to raise questions about strategies for success” (Burnham, 1999). This view is seen well by the distributors because they are the ones losing business and money. But as the problem progresses, suppliers are starting too see it more clearly in its full context.

Confidentiality problems have now started to cause disruptions in the efficiency of suppliers. Common problems with suppliers tend to occur frequently in the advertising world. The problems are often a result of what the industry calls “rush orders,” which are delivered every day in this field. With such orders, suppliers have a range of errors that include wrong designs, wrong colors, misinterpretations of logos, and especially late drop-off deliveries. Distributors are plagued with these problems, and most have to explain the fault of the suppliers to their client. The distributor can lose clients when this happens. So now suppliers see that by offering too much information on their web sites and in pamphlets, the end user has been the only one benefiting.

Jeff Weinrib, distributor for REM products, has experienced a situation like this. The invoice with shipping information on it that Weinrib received had been miscalculated by the supplier. Sure enough, the invoice was late because the supplier neglected to inform Weinrib of the option of which way to ship. Weinrib called the supplier and was not contacted until two days later. The supplier appeared to show no concern. Because of this, Weinrib lost interest in doing business with the supplier. While this went on, Weinrib had no clue where his clients’ products were. Is it standard practice to let the distributor wonder where his clients’ goods are? Well, most suppliers do not handle business in this manner. According to Weinrib, “the suppliers now included shipping options on the invoice,” and the problem was resolved for a time (Weinrib, 1999). These problems were drastically reduced after shipping options to the invoice were added, however the same problems still occur.

The suppliers offer their solution to the whole problem of efficiency. They say cut the middleman, and the problems will be dissolved. This would be a drastic change in the industry. The only real reason the suppliers would do this is obvious; more money. But this would cause more problems than it would seem to assuage. The solution would result in a stressful workload on the supplier. If the distributor were eliminated, then the supplier would have to complete the “middle man’s” job. “The distributor is needed for a lot of the paperwork in a transaction. Without us, the supplier would have to worry about meeting a scheduled time of delivery and deal with the nagging demands of the client” (Lock, 1999). Therefore, losing the distributor would not be beneficial to the problem at hand.

Other professionals in the industry argue that a company store would provide more organization in the field. A company store is an outlet for promotional merchandise to be reviewed online by clients, firms, visitors, or dealers in the industry. All of the merchandise is imprinted with the company’s logo or identification. This is good publicity for the distributor who sponsors the logo and it also keeps the end user from going straight to the supplier. “The idea sounds like it would be an organized way to attract clientele, but it is actually costly and time consuming” (Lock). Launching a company store would add work to the already busy distributor. This would involve tasks such as updating information, collecting new ideas, and paying individuals to do the work. Thus, this would not be a sufficient solution to the problem.

Proposed Solution

There is only one true way to alleviate the problem of confidentiality and efficiency in the market place. Making laws against detailed information being exposed within suppliers’ web site would be the initial plan. In order to accomplish this, suppliers and distributors must agree on their jobs in the industry. This could pose a problem if greed and money get involved. Individuals who hold high positions within the field may stand in the way of some of these reforms. But if the laws would set the standard of communication between the two, then confidentiality and efficiency could be respected.

The industry could start with making the ASI number the sole source of contact in the field. Once the understanding is made, confidentiality will no longer be a problem. The end user would have no means in which to contact the supplier directly, thus, resulting in the reduction of the mishaps produced by the supplier. Better communication skills would evolve that would enable the industry to grow more efficient. These skills would evolve because the laws have provided a more reliable outline for industry personnel to follow. Laws would be effective in most instances, but there would also be those times that the laws would make no difference. Personalities of people in the field would rarely change because of new laws. Minor mistakes such as misreading an order, or one written incorrectly would still happen. Laws could not correct all problems, but they would help to keep things in order. They would follow the same type guidelines of the doctor/patient confidentiality laws. “Providing laws to which both distributors and suppliers are subject to would eliminate the hassle of unanswered questions” (Lock). Laws keep the world organized, and with them, the promotional advertising world would thrive. Many politicians do not agree, but they are not the ones managing the advertising industry.

Evaluating the Effects

Similarly, laws have effects on other industries. Lawyers and doctors have laws for confidentiality reasons, and so should the advertising trade. Laws would help define what one is to do when a problem arises. The distributor is a major contributor to the world of advertising. Without confidentiality laws, the distributors do not have the chance to do their job. The industry would be chaotic if this were to happen. The supplier would become greedy, and by-pass the distributor, to have access to the client. The laws would encourage good business throughout the industry. Clients do not usually get to buy wholesale for a reason. Business is more profitable when less hassle is involved. The “middleman” (distributor) makes transactions smoother and allows for competition to exist. Better competition insures a thriving economy that builds itself. When stricter laws are enacted, confidentiality and efficiency will improve throughout the advertising industry, and the role of the distributor will be acknowledged.

Presently, we have many laws that were constructed to build confidentiality. Doctors and lawyers have had to do this for some time now. This proves that it can be done in an organized manner. Although, these fields are very different in nature, they all agree that confidentiality is crucial. We can look how well these laws have worked for these two industries, and conclude that it would bring about a more efficient and confidential atmosphere to the advertising field.

This idea would take a few months to sort out because of the legality involved. To make sure these regulations were followed, and that they achieved their goals, we could set up a team that monitored these evaluations from the advertising agencies. This team could also outline the objective of the new regulations so that the ad agencies could adapt well to it. Therefore, we could start to track the actual progress of the law as soon as it was passed. With these accomplishments, the advertising world would become a prosperous and structured industry in the next millennium.