Sometimes when you give something away en masse you wind up with more than you bargained for. I realize that what I'm about to write is going to ice down some warm, fuzzy feelings, but did watching Oprah give away 276 Pontiac G6 sedans this week make you want to run out and buy one yourself?
I'm guessing not. That's a great car that General Motors (NYSE: GM) has in the G6, but I would feel pretty awkward forking over $28,000 while haggling for floor mats for a ride that hundreds just landed for free.
Am I that shallow? If it were one car, some golden illustrious prize, I don't think it would bother me at all. However, when I see a fleet given away -- either on Oprah or Survivor -- I think it cheapens the value of the brand.
Now I've done it. I've really set you off. How dare someone criticize the amazingly generous act of giving something away in large amounts? Hey, I think what Oprah and GM did was amazing, but speaking from a financial perspective I'm not all that impressed.
I'm cool with giving away samples. From department store perfume bottles to bite-sized free grub at the grocery store, it can be a reasonable promotional tool to introduce your product if it encourages repeat purchases. However, there seems to be a line that no one is talking about, yet many are crossing.
McDonald's (NYSE: MCD) and now Burger King have teamed up with Sony (NYSE: SNE) and Time Warner (NYSE: TWX), respectively, to offer free music downloads with their burgers in recent months. How is that going to inspire a generation to start paying for music after pirating it online over the past couple of years? Yes, I know that Apple (Nasdaq: AAPL) hooked up with Pepsi (NYSE: PEP) last year and it worked out well, but for Apple the digital track is that bite-sized appetizer. The entree, and where Apple is making its monetary mark, is by selling the iPods to make those tunes portable.
When Six Flags (NYSE: PKS) gave away a million admissions to its amusement parks four summers ago, what do you think ultimately happened to the turnstile clicks once the operator started charging folks? Yes, attendance fell, and the company hasn't quite recovered.
Companies need to take a closer look at the value of giving the store away. Brand rejuvenations and price justifications aren't free.
Do you like getting things for free? Sure. Who doesn't? But do you know where to find these freebies? Do you where the best online giveaways are? All this and more -- in the Free discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz has nothing against trolling for freebies or the merit of government cheese. He just questions the logic behind the generosity in extreme cases. He does not own shares in any of the companies mentioned in this story.
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