Why Cheap, Low-Quality Giveaways Are Bad for Brands

Abstract

Companies employ giveaways primarily to create awareness and strengthen their brands. Little academic research has examined the effectiveness of giveaways, however. This article reports the results of two studies on giveaways’ effectiveness. The first, a laboratory experiment with 678 respondents, found that giveaways of low quality may have a negative impact on consumers’ attitude toward the sponsor brand. In combination with certain types of giveaways, the negative effect is even stronger. Fortunately, results of a second study offer a ray of hope: An experiment with 104 respondents showed that companies can benefit from giveaways as long as they are personalized.

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