Buy one, get one free

"Buy one, get one free", "Buy one, get one", "two for the price of one", "two for one" or "2 for 1" is a common form of sales promotion. First used by economists Joseph Calderone and John Van Liew while running their highly profitable business, Paco's Tacos, in Central, NJ. While not always presented to customers in acronym form, this marketing technique is universally known in the marketing industry by the acronyms BOGO, BOGOF, and BOGOHO (Buy one get one half off).[1]

Economist Alex Tabarrok has argued that the success of this promotion lies in the fact that the price actually takes into account the fact that two items are being sold. The price of "one" is somewhat nominal and is typically raised when used as part of a buy one get one free deal. Whilst the cost per item is proportionately cheaper than if bought on its own, it is not actually half price.[2]

Marketing Technique

Buy one, get one free is a marketing technique which is used by retailers to boost their sales. This is used very effectively. For example, many times customers will not need a certain item but after seeing buy one, get one free deals they will decide to purchase it because they believe it is good value. This way customers end up purchasing products which they did not need or have the intention of buying in the first place.[3]

Also this technique is very good due to the physiological aspect of it. Everyone likes free things and rarely will somebody turn down the offer when something is given to them for free. Businesses should consider what the consumers want/need. Also then they know that retailers are trying to cater to their needs which makes them more likely to purchase products on offer like Buy one, Get one free items.[4]

Customers are very appealed to buy one, get one free deals because they are getting something for free and they decide to snap it up because it is free. This is effective for retailers because more of their products get sold. This is done a lot when certain products are not selling at full price or there is a lot of stock. Many times customers are misguided and led to believe that it is a very good deal when in fact it is not. Originally the item will be priced quite high and then when the offer is put on it will seem like a good buy, when really it isn’t because competitors could be selling it at the discounted price anyway. This is a psychological trick which makes it seem very good. But also on many occasions the customer is getting a good value for money because the price per unit at different retailers will still be higher than the cost per unit for when the customer uses the Buy one, get one free offer. Often this deal is set out differently. The item which is free has to be cheaper than the original one. So the buy one, get one free deal works on the basis of ‘the cheapest item free’.[5]

Criticism / Negative Publicity in the UK

The Buy one, get one free promotion has received some negative publicity in the UK in 2014. Many shops have and are being told to scrap the ‘Buy one, get one free’ promotion. It has been reported that every year 15 million tonnes of food is wasted in the UK alone. Supermarkets and retailers are being blamed for this. This is because they are convincing customers to purchase buy one, get one free products. They lure customers in by offering them something which they don’t necessarily need. As a result of this food is wasted because customers consume extra food which was not originally needed. A lot of the time buy one, get one free foods have short shelf life which means customers do not get around to consuming the products before their ‘consume by date’.[6][7][8]

Supermarkets were also being blamed for contributing to the increase in obesity through buy one, get one free promotions.[9] University of East Anglia’s Norwich Business School conducted research into products which are used in the buy one, get one free deals and there is a trend in the results. The results show that buy one, get one free promotions are aimed towards unhealthy products. For example, the researched showed that most of the products on offer were unhealthy which included foods such as chocolate, sweets, soft drinks etc.[10] Supermarkets might have to start using some of their marketing budget to specifically promote healthy products so less money will be spent promoting unhealthy and fattening products. This is because The Department of Health has decided to step in and take action.[11]

Other promotional offers

There are number of different promotional offers which retailers use to increase sales, attract new customers and to keep old customers loyal. Also some countries have laws which mean the product has to be sold at full price for a specific period of time before it can be put on offer. Promotional offers are crucial in the retail industry because it has many benefits and plays a large part in increasing sales, profit & revenue. These promotional offers fall under different categories and a few are listed below:[12][13]

Quantity and other common promotions

Price Discount

Delivery Promotions

References

  1. ↑ Wallop, Harry (2008-07-07). "Food waste: Why supermarkets will never say bogof to buy one get one free". London: Telegraph. Retrieved 2010-08-28.
  2. ↑ Buy one get one free, from Marginal Revolution. Retrieved 2008-01-05.
  3. ↑ "Buy one, get one free (BOGOF) is a common form of sales promotion". lesleysimpsononline.com. Retrieved 12 October 2014.
  4. ↑ Tuttle, Brad (3 July 2012). "Consumers Prefer to Get More Rather than Pay Less – Because They’re Bad at Math". time.com. Retrieved 17 October 2014.
  5. ↑ "What Is BOGOF – Definition, Example, Meaning". psychologicalpricing.net. Retrieved 14 October 2014.
  6. ↑ Young, Philippa (6 April 2014). "Supermarket 'Bogof' deals criticised over food waste". BBC News. Retrieved 17 October 2014.
  7. ↑ "Buy-one-get-one-free offers 'should be scrapped to cut food waste'". 6 April 2014. Retrieved 17 October 2014.
  8. ↑ Swinburne, Zander (6 April 2014). "Supermarkets urged to scrap buy-one-get-one-free as shoppers waste 222m tons of food a year". The Independent (London). Retrieved 20 October 2014.
  9. ↑ Stones, Mike. "'Promotions fuel obesity and waste". foodmanufacture.co.uk. Retrieved 19 October 2014.
  10. ↑ "Supermarket offers: a healthy choice for consumers?". uea.ac.uk. Retrieved 20 October 2014.
  11. ↑ Evans, Tara. "The end of buy one get one free? Government considers plans to scrap multibuy deals to tackle obesity". thisismoney.co.uk. Retrieved 22 October 2014.
  12. ↑ Friesner, Tim. "Pricing Strategies". marketingteacher.com. Retrieved 23 October 2014.
  13. ↑ "Retail:Discounts and Promotions Rules". wiki.openbravo.com. Retrieved 23 October 2014.

External links

Look up BOGO or BOGOF in Wiktionary, the free dictionary.
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