Current Issue Summary
June 2021 (Vol. 61, Issue 2)

Why Cheap, Low-Quality Giveaways Are Bad for Brands: Quality of Freebies Drives Consumer Attitudes, but Personalization Can Help
Companies use promotional giveaways—branded pens, mugs, USB sticks and more—as a way to create awareness and strengthen their brands. However, there is very little empirical research on their effectiveness. In two studies, Samuel Stäbler (Tilburg University–The Netherlands)  found that the lower the quality of the giveaway item, the greater the turnoff to consumers. But would personalizing giveaways make them more appealing? The latter, indeed, proved true as a targeting strategy.

In a laboratory experiment with 678 respondents, comparing the effects of giveaway promotions by Coca-Cola and a fictitious brand, Stäbler found that lower quality giveaways had a negative impact on consumers’ attitude toward the brand. Moreover, in combination with certain types of giveaways, such as matchboxes, the negative effect was even stronger. “Fortunately,” Stäbler wrote, “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,” for example, with the names of targeted customers written on them.

Among the takeaways:

• Quality really does matter, and lower quality has negative consequences, even for established brands like Coca-Cola.
• People are more likely to recall the sponsor brands of low-quality giveaways than of high-quality giveaways. “Negative stimuli seem to receive more processing capacity than positive stimuli.”
• Bottom line: Low-quality giveaways lower the consumer’s opinion of the sponsor brand, and therefore can be “a waste of money.”

Read the full article here.