How many times have you been approached by someone offering a free gift or a special discount when you buy a certain product? They might offer you a nice bowl with the purchase of an expensive set of knives. Or they might entice you to buy a bigger box of cereals for you to avail of a free gallon of milk.
‘Free gift with purchase’ appears to be the ‘in’ thing in the marketplace today. Most of the time, they are offered with a colored printed brochure of what you will get for free. In a popular mall, for instance, this brochure, using a full color printing process, is handed to you by the cashier as you pay for your purchase to entice you to buy more. These free gifts are likely to be offered when selling cosmetics, travel packages, every day groceries, among others.
Researchers at the University of California in Berkeley, however, do not think that this strategy is a winning one. Although most marketing textbooks preach that promotions improve short-term sales, the study discovered that offering a free gift with a purchase can make consumers belittle the value of the free product.
In other words, a free offer may indeed increase the sales of the promoted product but it may impinge on the sales of the product being offered as a free gift. The research also noted that this negative perception about the free gift can trigger disdain on the product that they may become hesitant to buy the product at all in the future.
The study found out that consumers tend to look down on the free gift or they ”value-discount” the product, to be more precise. This free gift idea devalues the product and may, in time, associate it with something that has little or no value at all. Hence, most consumers are now unwilling to pay for it or pay more for it. This inferences researchers also found out, is carried over not just to the brand being offered as a free gift but to other brands in the same product category.
The thing is, you have to be very careful when allowing your product to be given as a free gift in a joint promotion. While the product being promoted may enjoy short run increase in sales, you face the risk of being branded as a product with little or no value at all.
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