Tuesday, March 26, 2013

FREE FREE FREE - a 4 letter Word . . . .

Free – a very lucrative word which can hypnotize Richest of the Rich and of course Poorest of the Poor. It is impossible for a person to resist this so called syndrome of Free Gifts, Free Products, Free Services and so on. Now a days FREE is one of the most dependable tool and the widely used idea by the Marketers and Businesses.

Last month, I did a lot of shopping for self and family, and was attracted by the Flat 50% Sale provided by Future Group's CENTRAL Mall. Also in the run were branded outlets like Nike, Adidas, Wrangler, Lee and the list goes long. The Sale attracted me at the point of buying and I ended up shelling out lots of money on buying stuff which I felt gave me a better deal. Once I returned back home and shifted my Brain's gear from Customers to a Marketers, I realized that I have bought so much of stuff which I didn’t require and I perhaps don’t use. I also realized that I had gone to the Mall to buy few T-Shirts for me and ended up buying a pair of shoes, jeans and many such items which I had not intended to. This scratched the inner marketer in me and I was just thinking whether I have gained from the deal or I just got blown away with the wind like many others. Is there anything called “Free” in this Business oriented world??

My post today will deal with few sensible and non sensible views of mine on this so called Marketing Magic Stick used by Marketers all over called as “FREE” .

You shop for clothes, fuel or consumer goods and in majority of cases you are lured by some offers offered as an additional thing with it. For Example : you buy fuel with your credit card and you are given free vouchers to redeem at a later stage.; buy a shirt and get one shirt free, buy a television set and get a speaker system free and so on. Also on web your emails, maps, social networking and stuffs are free.“Free” or “Extra” or “Discounts” works as a carrot to get first time customer and acts as a catalyst to hook him/her. Sometimes its objective is to sell more at the point of sale by offering him/her different schemes. And its an universal phenomenon that nobody minds things for free. As Prof. Praveen of Tuck School of Business says “When a product is at a price, you have to use your rational mind, but when it is free, it is very easy decision making”.

Let us now look at the history and origin of the concept of offering for FREE. This tool of Marketing called “FREE” was devised by King C. Gillette founder of Gillette in 1903 when he sold razors at a loss by giving them to business partners who apparently distributed it to their employees which created demand for disposable blades of Gillette. Since then this strategy is adopted by Marketers in every field to lure customers. There has been a lot of modifications and creative ideas also added to this strategy since its first encounter with Gillette.

One such modification in the strategy is famously known as BOGO which is an abbreviation for “Buy One Get One”. BOGO is very widely used as a strategy by marketers, almost every mall and retail store selling clothing to FMCG will have at least 5% (in fact more) of their products offered in BOGO way. Likewise many modified offers are thrown on the shelves to lure the customers like buy one get 3 or 5 or 'x' free, zero percent EMI scheme, buy today pay tomorrow, Free redeemable vouchers, Buy this get that free etc. But the question which arises is, does all the above mentioned offers really provide something for free?. The answer varies from person to person. In majority of cases the price of the freebie or the goods attached as free is added as a hidden cost in the main product. That is if you are buying a shirt at X Amount and you get one free, then that means the cost to the company of these 2 shirts is <=X. In cases such as =X, the company tends to offer because they are not looking for profits and looking for a visibility or may be they are trying to sale the old stock so as to renew the new stock as per Market demand. “FREE” has become a very important and integral part of any offering today and the customers have become so accustomed to it that Marketers cannot strive long without this.

This “FREE” is going to be there till there will be availability of buyers and Marketers on this Earth. In Simple, this is a never ending story and we are going to get lured and hypnotized by it.

Shall be posting few more post on this topic as a continuation soon.

Hope you have a delighting read here at my blog.

Regards,
Rohit Tiwari

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