The too good to be true “buy one get one free” advertisement 

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Advertisements are something we see inadvertently every single day. Hardly a day goes by when we don’t see a newspaper publicising a brand or a billboard on the street hyping a product. Advertisements play a huge role in our lives, influencing almost every decision we make and every small irrelevant thing we buy- and sometimes, they prove to be more of a stumbling block than a remedy. 

In economics, incentives are what encourage an individual to act or respond in a certain way. They are the mechanism by which you get people to do what you want them to. Advertisements come into play in this case because advertisements revolve around the fact that people get easily impacted by what these ads project. 

When you see the words “Buy one get one free” or “two for the price of one” you are automatically inclined to buy the product. It feels like a rare opportunity that you must grab. The reason why consumers respond to the scheme is largely because they get a sense that they are saving on the price of a product. Basically the Buy one get one free strategy (typically known as BOGOF) is a sales tactic which pushes consumers to make the purchase. Because, let’s face it, who doesn’t like getting free stuff?

A marketing strategy to boost sales  

To create a sense of urgency and to persuade a customer to fall prey to this scheme, a deadline is set which prompts the customers to take quick action. The main reason why this strategy is so effective and widely used is because it targets the right people at the right time and at the right place. Once the target audience is achieved- say a particular age group or a particular group of people with the same habits, sales can drastically improve and one of the main reasons behind this is the fact that you know who to focus on. The offer is in itself so fascinating that the consumers cannot look through. BOGOF isn’t really that big a discount. Whereas in reality, the price of “one” is commonly raised when used as a part of the buy one get one free scheme. For example, you might see a deal where you buy a skirt for Rs 400 and get another one free, but it is possible that the actual value of the skirt is Rs 200 and you’re just buying them at list price. Another mistake we make is that we believe that the satisfaction and joy we get after purchasing two products under the BOGOF scheme is unparalleled as we paid less for two items and got them at the price of one. Whereas, the law of diminishing marginal utility states that as the consumption of a particular product increases, the utility derived from each additional unit reduces. Meaning if I get two burgers under the BOGOF scheme, by the time I get to the second burger, I’m almost full and the happiness quotient isn’t the same as it was when I  had the first bite of the first burger. 

Research has shown that consumers buy two products when they are under the BOGOF strategy even when they need one which results in waste instead of savings. In fact, the United Kingdom has decided to ban BOGOF promotions for unhealthy food items in the country from 2022. This decision was taken by the government in an attempt to tackle obesity and improve public health. Obesity is one of the biggest health crisis the country faces,with almost two thirds of adults and one in three children suffering from obesity. The promotion of unhealthy food items has led to impulsive buying among the citizens. This is mostly fueled by the use of the word “free” which proves to be a huge boost and the customers buy the product blindly. Today, the buy one get one free scheme makes up for 80% of all free promotions. A whopping 93% of shoppers have purchased products under the BOGOF scheme and 66% of them say that it’s their favourite type of discount.

Like many offers, it is the perception that matters in the BOGOF scheme- and not the reality. The beauty of this offer lies in its benefit to the retailer. BOGOF is mainly used to clear out or move the inventory. It is also a tactic to increase cash flow when the demand for products is stagnant. Keystone pricing is a retail term related to pricing inventory which is often used under the BOGOF scheme. Suppose you have an old stock of shirts which are not getting sold and  a new batch of shirts are on the way. What do you do with the old shirts?  The smartest way would be to pair the old stock with the new stock under the BOGOF scheme which proves to be a win-win situation for the retailers. 

The bottom line is you don’t always have to get the second item- aided by the hypnotism of the word “free”, this marketing gimmick results in increased sales at no additional cost to the retailer. So unless you encounter a BOGO deal you already planned on buying two of, it’s generally not worth it. And you know how the old adage goes- “ If it’s too good to be true, it probably is.”

 -Mrunmayee Joshi 


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