There must be a higher purpose to giving away your product for free, if the decision by a Mexican food chain to away free burritos for four hours in the busy lunchtime peak is an indication.
Mexican chain Guzman Y Gomez is running the event to coincide with the launch of its second Melbourne CBD store today.
It publicises other “free burrito days” across its national chain network. Others are planned in New South Wales and the Australian Capital Territory next month.
The aims are clear to marketing industry watcher Mark Crowe, the chief executive of the Australian Marketing Institute.
Crowe told SmartCompany GYG has two objectives: “Creating some momentum around the event and drawing awareness to the new restaurant.”
“In the food and hospitality market, it’s a very competitive space so you certainly need to do something different, and dare I say overt, to capture people’s attention.”
The food chain has publicised its event on its website, where it has also urged people to link in via the main social media platforms. Clearly word-of-mouth is the aim of the exercise, and generosity is only the vehicle.
However, Crowe says there are a few pitfalls to avoid in this sort of marketing strategy.
Firstly, it is aimed at generating awareness, which in Melbourne is no mean feat given the number of competitors in the Mexican fast food market. So Crowe says the important part of word-of-mouth is to make sure the product is good so customers pass on positive referrals.
Also, Crowe says “it very much applies to when the product is new”, so mature products won’t have the same impact from free samples.
“What they’re trying to do is get quick penetration into the market.”
Finally, Crowe says marketers should be aware “you can run the risk that you will undermine your ability to charge a price for the product”.
To put it another way, customers may come to expect a free lunch. One way he observed GYG was managing that risk was staging these events in places separated geographically, and operating on the assumption customers won’t travel from Victoria to NSW to score a free burrito. In the case of Melbourne, the two stores don’t operate their events at similar times.