Promotional products feel pinch as firms cut back on freebies

http://www.boston.com/business/articles/2008/09/24/promotional_products_feel_pinch_as_firms_cut_back_on_freebies/
But these are not easy times in the promotional-product business. Nationally, manufacturers and distributors have been hit by shrinking marketing budgets brought on by the economic downturn. Also, the Pharmaceutical Research and Manufacturers of America, a drug-industry trade group, has adopted a voluntary ethics code banning gifts to doctors. And in Massachusetts, recently adopted regulations make it mandatory for doctors to report gifts from pharmaceutical companies that are worth more than $50.

"There are some guys who sold exclusively to the pharmaceuticals, and for them the shift is going to be huge," said Steve Hettrick of Lawrence-based Gemline, which sells tote bags, pens, and corporate gifts. "And those guys are going to start looking for business in other industries, which is going to increase competition for everyone."

So far, Hettrick said, Gemline has avoided a significant sales drop but the company has seen customers looking for cheaper products. "They're still ordering the same number of pieces, but instead of going for the $25 tote bag, they're looking for totes in the $2 to $5 range," he said.