How can companies offering 'free' products make a profit?

Organizations generally rely on the long-term investment of product implementation. Some organizations offer free products in order to sign consumers up for a particular service which is considered to be a reciprocal method of overall business transactions that enables an organization to profit.

Most organizations offering free products have already established brand recognition and brand messaging and have developed an authentic reputation built upon "a name consumers can trust" which enables the organization to maintain strategic competitive positioning in the marketplace. In some cases, product offerings come in the form of small product samples while others enter the market as a test launch for product penetration into the industry. One of the ways organizations can generate revenue for a free product offering is by adding or creating value to products. For example, changes in technology are increasingly frequent, thus enabling organizations to use technological advancements to their advantage, by offering to give away the older version of a product to the public and selling the upgraded version. Consumers will oftentimes purchase both models regardless of the newer version being launched. Cricket cellular phone carrier for instance currently has a competitive promotion where a consumer can trade the competitor's cellular phone for a new Android capable Ascend cell phone. In essence Cricket is giving away a phone for competitive positioning and is able to make money from this type of transaction through signing up new customers that are willing to leave their old phone companies.

Consequently, the only enticing selling point that lures consumers to subscribe to Cricket's services is their offer to give away a new phone. Other competitors have an opportunity to lure consumers with competitive pricing strategies. In today's economy consumers are in search of high-quality standards that are affordable. There are three strategic objectives organizations must fulfill in order to maintain a competitive edge over competitors such as; (1) efficiency in business operations, (2) flexibility in product functioning, (3) and innovative benefits. All three objectives have consumer satisfaction as the pinnacle of their business strategy. Another method for competitive advantage is global expansion.