How Buy One Get One Free Marketing Works

[Jasmine]

Buy one get one free is a very popular and also very effective marketing method. But how can a company give two products for the price of one and still make profits. Here are some strategies used by the companies in this marketing method.

• Make the product inferior and recover the cost (reduce quality, quantity, or weight)
• Increase the price of product so that you can recover the cost of free product
• Sell in volume so that you can generate a lot of profits

When the companies reduce the quality/quantity or increase the price of the product, the sales can be affected. Therefore, the number 3 is the method used by most companies. If they were earning $1 profit from one product sell, by giving 2 products for the price of one, they make $1 profit by selling 2 products. But they also manage to sell a lot of products and generate big profits.

 

[Mika]

I will share a case study in my country. During the last FIFA world cup, a TV company manufactured a lot of TV sets because TV set sales normally skyrocket during sports tournaments. When world cup ended, the company had a lot of TV sets. Then it decided to give away the TV sets for free for those who buy motorbikes from the company. They made more money.

 

[Alexandoy]

The most common trick I know to afford the promo of buy-1-take-1 is the higher price. It is not easy to sell 2 items for the price of 1 because that is financial suicide. They only do that kind of promo on products that are nearing the expiry period. However, Pizza Hut has that promo for many years now and they are still doing good.

 

[Jasmine]

If the company is selling in volume, they can afford to to give two products for the price of one. They are able to do this without hampering their finance because they se will be selling a lot of products.