Saturday, April 14, 2012

Free

A few examples of a few different kinds of free.  Related to the business chapter of the ebook, but I wasn't able to transition into these examples smoothly.

Jell-O--have you ever looked at how Jell-O is made?  Where gelatin actually comes from?  It's quite gross.

  And, as sometimes happens, it started out as a food item for the well-to-do.  When gelatin was first powdered and turned into commercial Jell-O over one hundred years ago, it isn't surprising that it was a hard sell to make; people didn't know what it was, they didn't know how to use it, and so on.  Patents and rights for the stuff passed hands several times in the first few years after its creation, and it never broke even, much less turned a profit.  Finally, a man by the name of Woodward had the right idea; he sent salesmen out with free recipe books--recipe books that had, naturally, recipes for Jell-O brand powdered gelatin.  Now that people had specific instructions and ideas for how to use it, Jell-O became almost immediately popular.  This was a new idea; the books were free, and people were under no obligation to use them.  The Jell-O added value to the book, but anyone could have kept the book and never bought a single package of Jell-O.  This is one of the first examples of businesses using genuine free, as opposed to gimmick, giveaway 'free'.


Coke--(read about it in this article) When you think about the Berlin wall going down, Coca-Cola is probably far from your mind, right?  Well, maybe you should think again.  Sometimes, what you get for giving something freely is worth a lot more than what you've lost, in business as well as in life.  When the wall came down, one of the first things across was a case of coke bottles.  Then vice-president, Doug Ivester made the decision to push as many coke products into East Germany as he could.  It started out free, then as the company established supply chains, they began accepting East German money, which was, at the time, hardly worth the paper it was printed on.  In the moment, it seemed crazy, since accepting the East German money was hardly better than giving the stuff away, but within a decade they amounted to nearly forty percent of the German market for soda drinks--well over a billion dollars, and that number has grown in the last ten years.  The immediate monetary loss was worth it; Coke owns German (and much of European) soft drinks.


Apple--I'm not an Apple guy.  I like my PC, I know how it works better and I trust it more. (I do have an Ipod, for the record)  I love a lot of things that Apple does, though.  My mom wanted to try an Ipad for her birthday, and she had never had any Apple product before.  When she went to the nearest Apple store and told them that, they recommended a free class that they teach about their products.  Apparently (and you other readers might know more about this than I would), you can take a class about the Apple product you bought that teaches you how to use all of the cool features, so you don't have to figure it out by trial and error or, worse, through endless manuals and users' guides.  And the best part? You don't have to buy it first.  If you aren't sure whether you want a product or not, you can attend the class and find out about all of the great features, play with the ones they have on display, and if you don't think you'd be getting your money's worth, you can walk out the door without ever having paid Apple a cent.  It's smart.  Heck, it's genius.  It creates customer loyalty and ensures that they will really appreciate their new product, and let's be honest, who's going to play with an Ipad for an hour-long class and then walk out of the store without one?  When the nice Apple employees are so happy and enthusiastic about all the cool things *you* can do with an Ipad?  If that isn't worth the cost of paying the wages for the teacher of the class, I don't know what is.


These are changes.  These are (or were) surprising.  And these are what businesses need to be able to do, or at least compete against.  Now.

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