Free offers… costing you to spend more?
- atonytrinh
- Oct 14, 2014
- 2 min read
Who can say "no" to free movies?
I recently received this offer from Cineplex for free movies on Saturday, October 18th, 2014. Yes, it’s real. Cineplex will be offering free screening to six movies and all concession items will be discounted, and all proceeds will be going towards Free The Children.
Is Cineplex doing this solely for benefiting Free The Children Foundation? I doubt it. As a marketer, I find it very difficult to believe that businesses act without considering the benefit of the company. There’s a reason Cineplex is still charging on all concession items, and I believe that concept has something to do with shaping a consumer’s desired behaviour.
Movie theatres make most of their profit at concessions stands, about 85% profit, so it is indeed the goal to have consumers purchase snacks every time they go to watch a movie. The problem about this is that most consumers (such as myself) refuse to pay for a $10 bag of popcorn. The purpose of this event is to have irregular consumers purchase a bag of popcorn and be satisfied with the experience, and memory, of enjoying snacks with a movie - So that next time you go to the movies, you say to yourself “Eh… I did enjoy it the last time, so why not?”
And it doesn’t stop there; Marketing never stops. When consumers’ transition from an irregular consumer to a regular purchaser, Cineplex pushes SCENE points to reinforce their behaviour by giving them prizes with values that increase along with the amount purchased. This concept of frequency marketing is generally used to gain loyal customers.
So, is “free” really costing you to spend more? The above explanation is just a theory, so it’s difficult to prove. However, app developers clearly seem to think so. Most apps in the market are free, with the option of purchasing virtual items or upgrades with real money. Ian Dransfield’s blog mentions this idea really well. Let’s take the app Real Racing 3 for example. I love playing this app on my smartphone. The idea of the app is to increase your driver level by completing races and unlocking cars. However, in time, it often gets difficult to complete a race because your car is just not fast enough. So what’s the solution? Getting the fastest car out there.
One of the world’s most desired sport car for just under $80? Seems like a great bargain. Free apps like Real Racing 3 draws the consumers into the game, almost as an addiction, and persuades them to spend their real money as a solution to everything. This follows the topic of gamification, a topic which I will certainly be talking about in my future blogs.
What do you think? Do you remember a time when a free offer ended up costing you to spend more? Or does this usually not work for you?
As for myself, let’s just say I can’t wait to watch ParaNorman 3D on Saturday.
Thanks for reading this week!
Anthony
Sources:
http://www.jumpradio.ca/2014/10/10/free-movies-from-cineplex-on-october-18th/
http://business.time.com/2009/12/07/movie-theaters-make-85-profit-at-concession-stands/
http://home.bt.com/techgadgets/phonestablets/6-free-apps-that-could-end-up-costing-you-a-lot-more-11363909048281
http://www.koenigsegg.com/models/agera-r/
Class material used: Lecture 4 Slides
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