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The Art of Corporate Gifting…or is it bribing?

October 12, 2006

The days of corporates picking up mithai or dry fruit boxes and dispatching them en masse to customers with hastily scribbled cards are long, long gone. Today, the corporate gift market is dynamic and evolving, and every season we see something new, whether it’s a floating crystal clock or a branded, delicately embroidered Chinese silk neck-tie. ‘Customers are asking for new designs, and it’s because they are exposed to international trends,’ says Vikram Sethi, CMD of Giftex. If design and the novelty value of gifts has become paramount, it doesn’t mean that utility has taken a back seat. Corporates want to gift right on all counts. ‘If the gift goes into a showcase then recall value is nil, and so the trend towards usable gifts,’ says T.S. Raman, CEO, Asian Adores.

However, while brand recall is what the bottom line dictates, corporate gifting is more than just that. It has been transformed into an art. If a company gifts too little it can be percieved as cheap and if it gives too much it can become a bribe. Gift the wrong thing, and it’s considered bad taste. ‘The art of selecting the right gift is to understand the likes and dislikes of the recipients and their particular taste. Only then will they reward you with their goodwill,’ says Brian Almeida, MD of Red Box Rewards. Aspirational value is important too and the best gifts are those that are aspirational in nature. A foreign holiday for instance. Such gifts are usually often the result of long-term loyalty programmes and are becoming part and parcel of the marketing strategies of airlines and the retail sector. However if a foreign holiday is offered to a company executive by a supplier, it will be considered a bribe.

Selecting an usable, acceptable and yet, exclusive gift need not be an expensive exercise. Practical considerations do demand an economic caste system, and gifts of different value and design are slotted for different levels and for different target markets, say dealers, or multinationals. Even at junior levels and in the less sophisticated markets however, customers prefer exclusivity and novelty. They are more likely to appreciate a box of dates with almonds ensconced within than chocolate barfi, or a Rs 30/- Chinese clock instead of a classic leather covered address book. As a result, old, traditional items like diaries and table top items have gone on the hit list. ‘How many paper weights and diaries is someone going to use anyway?’ asks Sethi, relating an anecdote of a pharmaceutical company which presented a doctor with a diary. The doctor told the representative to keep it for himself.

A thoughtless gift creates a negative impression. At best it might remain an useless expenditure. ‘The gift acts as a reminder that the company exists. It’s a kind of advertising, not a bribe,’ says Raman. In fact, gifting can be a terrific way of advertising, often very economical. ‘Gifting is cheaper than advertising,’ says Sethi. ‘You are going direct to your customer and the cost per impression is fairly low.’ If the customer uses your gift daily, whether it’s a wrist watch or a mixer grinder, he is going to favorably disposed towards you every single day.’

While choosing the right gift is important, how you give it is a vital aspect, because gifting is not just about brand recall, it’s about people (probably why corporates, specially BPO’s, are going in for internal gifting in a big way). ‘Gifting builds relationships, and how you present is critical,’ says Sethi. For example, there are not many people today who would show off a set of glasses with the company’s name emblazoned on it, even if they are made of crystal. No one likes to be perceived as a free loader. And if the receiver can afford glasses without company logos, why would he use those that have them? ‘People give these gifts away to their peons. The only person these gifters please is their own boss, who wants to see a big bold company logo.’ If the company name must be used, feels Sethi, then it should not be intrusive, or it can be used on the package or on the card.

Some companies are not gift-oriented, and this often has to do with the industry they work in. ‘People seriously concerned about their business are hardly concerned with gifts. What matters to them is value created for them in their business,’ says Roshan Lal Agarwal, Head – National Sales, Foseco India Ltd, an industrial chemicals company which sticks to giveaways like calendars. At the other end there are pharmaceutical companies and BPO’s, where gifting is the rage. Pharma companies are believed to spend in the region of Rs 700-800 crore (more than half the market) on gifts to doctors, and this raises some ethical issues. Such issues are relevant across all industries, but pharma companies come in for flak because doctors themselves, being individuals, set their own rules.

Large organisations on the other hand can have strict policies on receiving gifts or unwritten rules, which if broken, raise disapproving eyebrows. There are also companies which ban their executives from accepting gifts altogether. ‘Some multinationals have a blanket ban on accepting gifts,’ admits Raman, but he feels that this doesn’t work. ‘If a company has to do business India, they have to gift, it’s just a good will gesture, thats all.’ As long as the gift is not an expensive item like say jewellery, then it’s considered in good taste, and not perceived as a bribe.

The Indian gift market is dynamic and growing, but is yet to reach it’s peak levels in terms of innovation or sophistication. ‘Creativity needs a boost,’ feels Sethi, as he believes this to be only way to prevent corporates from leaning towards imported products. He suggests marrying modern design with Indian handicrafts, and he doesn’t want us to stop with hand made paper. ‘Look at what the south east Asian market has done,’ he says. ‘Traditional items like Fengshui products are being given as corporate gifts.’

The future however, looks good. The Indian corporate executive now expects unique gifts, gifts which are presented to him with style, and as a result the market is likely to become increasingly sophisticated in the coming years.

(Published in The Economic Times, 2006)

Related Reading: Docs not allowed to accept bribes anymore.

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One Comment leave one →
  1. Neemo permalink
    October 30, 2008 6:23 pm

    interst’g article… by now we all realise that the days of corporates picking up mithai or dry fruit boxes and dispatching them en masse to customers with hastily scribbled cards are long, long gone. 2de the corporate gift market is dynamic and evolving & every season we see something new, whether it’s a floating crystal clock or flashy chrome Apple iPod (www.ipodyourlife.co.in/make_it.aspx). Customers are asking for new designs, and it’s because they are exposed to international trends. The very expectation exists at a higher level than before. So getting the right gift for the right audience is crucial. And trust me, I state this outta experience, an organisation that doesnt put much thot in2 its corporate gifting strategy, does see its -ve side effects.

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