Free Items Giveaway…Why are they doing it?

A great blogger named Devi Girsang asked to the public in her last posting what actually is the objective of companies giving away free items. This is an interesting issue since I have not thoroughly thought about it. Is it just giving away? Do they try to introduce the products into the market? Or do they have any other reasons behind it? In this sharing I would like to answer her question from the marketing point of view.

I assume everybody knows about Robin Hood. In the story he steals money and jewelries from the rich and gives it to the poor. This then leads to the high popularity of Robin Hood among the poor. They also have a huge sympathy and support to Robin Hood with all their heart. I think this analogy works pretty much the same with the company that gives away free items. They might try to attract the public attention by teasing them with prizes.

Seth Godin coined a theory called Permission Marketing. He basically points out that in this modern society, marketing should engage strangers to be our friends, and friends into our customers. Permission marketing is about building an ongoing relationship of increasing depth with customers. Therefore, the giveaway process might just a good start in developing the ongoing relationship.

In the internet, certain websites usually ask for our contact details (email address, phone number, etc) before we can actually join the pool of the free giveaways. Unintentionally, we are giving permission to them to contact us in the future for further promotional issues and updates. This is also another practice of permission marketing.

Giving away items also develops the sense of giving back some of the profit to the society. This then increases the loyalty of the existing customers and also attracts potential customer’s attention. This could also attract the media coverage and reviews from the third party which again endorses the public relation (PR) in marketing.

For the newly introduced products this method could be used to increase the awareness of the product in the market. At the end of the day, word of mouth is still the best promotional method. By endorsing the usage of the newly introduced products the company gives the small tease of how great the product is.

I hope this simple sharing could answer the question.
Comments, opinions, and questions would be deeply appreciated.

David Herlambang

MarketingFirst