Question

Giving away a product for free can be a good business practice. Why is this TRUE?


When those free items make it into the hands of potential consumers, the business receives ongoing advertising through visibility.


Even if every single person throws away the free product, the company hasn’t wasted any time, resources, or money.


When a consumer doesn’t have to make a purchase, the consumer may become frustrated with the process.


A free product keeps the consumer from buying an additional product from the same company.

Answer 1

Correct answer: only the first statement is true.

- True: "When those free items make it into the hands of potential consumers, the business receives ongoing advertising through visibility." Free samples, branded swag, and giveaways increase brand awareness, generate word‑of‑mouth, and can act as ongoing, low‑cost advertising when recipients use or display the item.

- False: "Even if every single person throws away the free product, the company hasn’t wasted any time, resources, or money." If people discard the free product, the company has still spent production, distribution, and marketing resources—so those resources would be wasted.

- False: "When a consumer doesn’t have to make a purchase, the consumer may become frustrated with the process." Removing the need to purchase normally reduces friction and is rarely a source of frustration; the goal of freebies is to lower barriers to trial.

- False: "A free product keeps the consumer from buying an additional product from the same company." That’s a possible downside in specific cases (cannibalization), not a reason freebies are beneficial. Often freebies are intended to drive later purchases or higher lifetime value.