Marketing Strategy : "Freebies"

Every so often we see companies giving away free products and / or services in order to capture the market. For businesses it seems like a formidable option. Why not ? After all, who doesn't like free stuff ? The question is though, what is the logic behind that and how practical are those offers ?

The logic behind such company policy :

1. Freebies are a great way to advertise the products, especially for a budding company. The strategy helps an aspiring company to do something that we call "brand placement". Potential buyers get a chance to feel the goods, try it and then make the decision to purchase it. First hand experience allows for good testimony on the behalf of the company. Word of mouth also does passive advertisement through such offers. To sum it up, freebies are given away in an effort to make more money. In other words, we get things for free and then end up spending even more!

2. Also, if they want the buyers to switch, there is no better way than to provide them with the product at no cost. This gives the user a chance to compare the item with already existing products. If it proves to be better, the company has made its point.

3. Another marketing strategy is to give out free offers to the company's loyal customers. Retaining the existing customer base is the key to success since it generates steady revenue. "Brand loyalty" is a critical tool for assessing the worth of a company. These days, every business maintains its own database. With the help of technology they can determine our demands, purchase habit and potential needs. For example, when I go to Radio Shack, I get asked about my zip code. That allows them to learn what kind of products they need to have in their inventory. When I go to CVS and use my CVS card, the machine automatically generates coupons for me based on my purchases. As I mentioned before, that is another way for them to make me spend more. Just the other day, at the CVS register, a coupon for 10 "EXTRA BUCKS" was given to me. However, I could get $10 off only if I would buy things worth at least $50.

Now, if you pay attention, you will see most of those offers are US based. The question is, why?

1. The business strategy of US itself causes the difference. The cost of freebies is almost always factored into the company's advertising campaign.

2. The most practical consideration will be to not send it overseas to minimize the shipping cost.

3. There maybe legal issues involved. Some products that are available here maybe banned elsewhere. Also, the products that are licensed here, may not meet the licensing criteria set abroad.

4. We have more investors in the US. Also, the financial companies give out loans with easier terms to the small business owners. As a result, the competition in the US is intense. Therefore, the businesses have to employ alternate tactics to promote their products. Freebies are unheard of in many other countries.

Here, I have provided the links to several sites with free offers. Check those out :

1. http://s2.excoboard.com/exco/forum.php?forumid=33232

2. http://www.giveawayoftheday.com/ (this one is updated daily)

3. http://nutella.ca/Samples.php (this one is for Canada only)

4. http://www.perpster.com/request.php (Free T- shirt for International customers)

You can also get information from this forum about coupons : http://www.couponforum.com/

How practical an option is it as a consumer?

1. Many offers are nothing but lengthy scams. You have to spend at least 10 /15 minutes to take surveys. I don't think that is worth the time. However, I can speak for myself only. There are people who are interested in trying new products and do not mind the surveys.

2. Companies can carry out the research aspect that is much needed to formulate a marketing strategy. Surveys screen the potential buyers to enable "target marketing." Freebies are the means to entice the interested individual to sign up for the product.

3. Some do not disclose in the beginning that they are offering only a trial period for a week or so. By the time you realize that catch, you have already given out too much information. Even if you sign up for the trial period hoping to cancel at a later date, 3 things can happen :

a) You may easily forget to call back by the deadline to cancel, resulting in a hefty subscription fee,

b) The telephone number that has been provided maybe a phony one. Therefore, you may not be able to cancel your account ever.

c) The third and the worst scam is that you are given an offshore number to call and cancel the account. When you call though, you are charged $3 +/- per minute. They will put you on hold and keep on transferring your call to different departments. By the time you have canceled the account, you have already paid the whole year's subscription fee!

So, I have done my part of presenting the facts. Whether you want to participate in such programs is entirely up to you.

Note :

I have written another article on why the Chinese products have been dominating the US market. I am proud of that article because I was able to provide an in-depth analysis based on my short yet significant theoretical knowledge in the business field. Unfortunately, that has not gained that much attention. I will appreciate if you check it out at the following link : Will Warnings About the Safety of Chinese Products Reduce China's Dominance in Global Manufacturing and Trade?