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How Freebies Are Used By Companies

By Armando Rodriguez


Freebies are samples of products from companies that they give away to potential customers to lure them to buy their products. It is generally something that you get for free. Most freebies are given when you apply online through the various freebie websites available online by filing out survey questionnaires.

In the past, in the U.S literature, some saloons would offer free lunch to customers with the purchase of more than one drink. The lunch varied from simple to elaborate foods and were sometimes worth a lot more than the price of a single drink. The saloonkeeper mostly depended on the customers to buy more than one drink.

The razor blades produced by the company of the renowned entrepreneur, Gillette, had become quite expensive and he had to reduce the price after the first patent expired. He sold them at a lower price to make market for the newer ones. This was coupled by the fact that there was a lot of competition in the market at that time.

The Standard Oil, a company owned by the famous John D. Rockefeller, at some time enjoyed a monopoly over the American market. When they decided to expand and look for overseas markets, the company sent out representatives to China to make a deal. About eight million kerosene lamps were given out in an attempt to lure over the Chinese.

The largest mass media company internet service provider in the United States, Comcast often gives out free DVRs samples to subscribing customers, bearing the burden of the initial product cost. This cost however is regained when the customers want installation, which costs about $19.95, as well as a monthly fee of $13.95 that is charged to every subscriber. The initial cost of one DVR box which is about $250, takes only around 18 months to recover, and then the company starts generating profit.

Big computer printer manufacturers often sell their products with partially filled cartridges as freebies at below costs to create sales for their external cartridges. In most cases, the cost of the printer with the partially filled cartridges almost equals the cost of buying one cartridge. The producers sometimes make the machines in such a way that if a non-proprietary ink cartridge is put into the machine, it completely disables it.

Giving out freebies can also be dangerous, as some consumers find side uses for the products they are given, other than the initial intended purpose. This tends to affect the revenue flow for the company. When for example some companies offered free personal computers which were accompanied with expensive relational internet services, the consumers used them for other home purposes.

A kind of practice called tying has recently been criticized as an anti competitive act. This happens for example when a company requires a book store to retain an unpopular book before allowing them access to the best seller. The end result is that consumers are harmed by being forced to buy a good that they do not need. This kind of tie could harm the other companies in the market if the company doing this has a large market share, or if the other companies only deal with single commodities.




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