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Can Nokia's freebies build brand loyalty?

The Nokia Lumia 900. Nokia is putting giveaways to the test with free smartphones for first-year students at Seton Hall University.

Jeremy Hobson: The cell phone maker Nokia, which said yesterday it's laying off 10,000 people, has an idea to stay relevant on college campuses. The company is giving the entire freshman class at Seton Hall University in New Jersey free smartphones -- the Nokia Lumia 900.

Marketplace's Mitchell Hartman reports on whether a gimmick like that will work.


Mitchell Hartman: At the fancy grocery store across from my office, I can usually get a whole lunch worth of free food — just by grazing.

Amy McCandlish: So this is Bubbies pure kosher dills. And then Rick’s Picks, the people’s pickle.

Customers might well buy a product if they can try it in the store, or take home a free sample.

But the Nokia Lumia 900 isn’t a pickle. It’s an expensive smartphone. Retail analyst Patty Edwards says, if students like it, the giveaway is golden.

Patty Edwards: If they don’t like it, however, the ripple effect in terms of social media and how fast that will get out to the world is huge.

Analyst Marshal Cohen at the NPD Group says giveaways can work for cheaper products, too.

Marshal Cohen: All you have to do is look at the beauty business. They’ve been doing gift-with-purchases for decades. They get consumers to spend more money and try new products. People love to get something for nothing.

But it better work. Otherwise, consumers feel cheated — like the product they got for free, wasn’t worth anything to begin with.

I’m Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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