[dizzystar]

Yuck. Without a doubt, the biggest failures in my marketing career started with "let's give them a free..."

Gaining market share or customers via free X promos is a doomed strategy. I have my theories, but the main thrust is some mumbo jumbo about perceived value. I've sat in interviews with more than one company that said with a not-ironic face that suffering now will cause explosive results in the long term. I pipe up and explain why this isn't so. Why I offer this advice for free is beyond me.

[fludlight]

I recall reading an article about a pair of grad students who realized that there was a correlation between price and perceived value. IIRC they were researching condom use in the third world and figured out that the locals would use condoms purchased at stores, but would discard condoms passed out for free by NGOs. So the grad students started their own NGO that uses "cool" Trojan/Durex-style marketing to sell condoms dirt cheap.

I can't find the article, but it may be this group:

http://www.law.harvard.edu/news/bulletin/2005/summer/classno...

Also see:

http://www.fordham.edu/images/undergraduate/economics/facult...

From page 4:

Obviously, the whole point of providing condoms is that they be used for sexual activities...They are not meant to be used, for example, for water storage. However, if they are free, then there are a large number of possible uses for condoms that generate positive utility even though the benefits do not cover the costs and they do nothing to prevent the spread of HIV. For example, Epstein (2007, p271) reports that when the CSM run by PSI in Zimbabwe tried to distribute free female condoms, the officials found that people were removing the plastic rings and selling them as jewelry.