Freebie Marketing - IELTS Reading Answers

Freebie Marketing - IELTS Reading Passage

This section contains details on a novel marketing strategy that involves enticing clients with freebies.

A. While touring as a nomadic representative for the Crown. Cork and Seal Company in the late 1890s. King C. Gillette noticed that his corked bottle caps were thrown away as soon as they were opened. Whilst touring as a nomadic representative for the Crown. Cork, and Seal Company in the late 1890s. King C. Gillette noticed that his corked bottle caps were thrown away as soon as they were opened. Despite this, his company made a fair profit and had a lot of potential. Gillette quickly realized, that even though the product had only been used a few times. Whilst working with such a straight-bladed razor — a sluggish, fussy, and possibly hazardous tool that needed constant sharpening – Gillette made his success. He rightly reasoned that a basic, temporary blade that might be disposed of when it is blunted will meet a real demand and earn substantial revenues. In 1901, he started the American Safety Razor Company. In 1903, he sold 168 blades, but by 1905, he had sold over a thousand.

B. What King C. Gillette pioneered is far more than a quick and economical way for men to shave; it is the business technique now known as "freebie marketing," which has influenced a slew of other businesses over the years. Gillette's strategy defied conventional wisdom at the time, which maintained that the ideal basis for a corporation was a single, long-lasting, high-quality, and high-cost luxury product with a high price tag. Freebie marketing combines two types of products: a master product that is purchased just once when a disposable item is periodically discarded and repurchased. In this case, the primary product is frequently sold at a loss and is occasionally distributed at a loss.

C. Complimentary advertising only succeeds if the master item's creator also has control over the production and sale of the refills. If this does not occur, cheaper replicas of the consumable items may be manufactured, preserving the old business without net profits. For instance, the video game manufacturer Atari initially offered its Atari 2600 systems at cost, depending on game sales to make a profit. However, a group of programmers left Atari and founded Activision, which developed similar-quality games at a lower cost. Suddenly, Atari was left with no means of generating revenue. Activision's lawsuits were unsuccessful, and Atari only managed to survive by incorporating license restrictions into its succeeding 5200 and 7800 consoles.

D. In other cases, consumers may discover that using a master product eliminates the requirement for discs possible. This is a well-known problem that has plagued the makers of the CueCat barcode scanner. These were handed away for free via Wired magazine in the hopes that users would use them to scan barcodes adjacent to adverts in the magazine, generating new revenue streams. However, users learned that the devices could be easily customised and used for various purposes, such as developing a separate library of books and CD collections. Because there was never a licensing deal between Wired and its magazine customers. CueCat was powerless to stop it, and after the company was liquidated, the barcode scanners were quickly accessible in large quantities for as little as $0.30 each.

E. Giveaway marketing is not permitted in any form. The use of gratis marketing to "push" habit-forming goods in locations where there is no market is an excellent illustration of this. This is already prohibited for illegal substances due to the illegality of the product, but it is also prohibited for legal goods such as tobacco, alcohol, and pharmaceuticals because the short-term profit for a comparatively tiny range of business branches is not presumed to be worth the monetary cost of ubiquitous drug addiction.

F. Another tactic that is prohibited by antitrust regulations is "tying," which is a type of freebie marketing. Whenever a sale of goods is the purchase of one good contingent on the purchase of a second good, this is known as a conditional sale. The first good is usually vital and desirable, while the latter is inferior and unattractive in certain situations. For instance, a music distributor with the rights to a popular record may only allow retailers to acquire copies of the album provided they also purchase undesirable material that does not sell well. Because such techniques often rely on the distributor's exploitation of a captive market, they are widely seen as anti-competitive.

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Freebie Marketing - Questions and Answers

Question 1-6:

Choose the correct headings for sections A - F from the list of headings below.

Write the correct number i-x in boxes 1-6 on your answer sheet.

1. No giveaways for addictive products

2. Sales of razor blades increase astronomically

3. The monopoly of consumables is vital for success

4. Video gaming – a risky business

5. A novel method of dual marketing ruled out

6. Freebie marketing is restricted to legal goods

7. Buyer ingenuity may lead to bankruptcy

8. A marketing innovation

9. A product innovation

10. More money to be made from high–quality products

Answer 1:  ix - A product innovation

Explanation 1: It is reported that while Gillette was having trouble with his straight-bladed razor, he experienced a profound epiphany. Thus, "a product innovation" is the appropriate heading.

Answer 2: viii - A marketing innovation

Explanation 2: It is said that Gillette’s way of selling razors started a new marketing strategy called freebie marketing. Thus, "a product innovation" is the appropriate heading.

Answer 3: iii - The monopoly of consumables is vital for success

Explanation 3: Freebie marketing is said to only be effective in situations where the producer has complete control or a monopoly over the development and distribution of his goods. Therefore, the correct heading is ‘The monopoly of consumables is vital for success.

Answer 4: vii - Buyer ingenuity may lead to bankruptcy

Explanation 4: Users discovered that they could modify products to use them in different ways, and companies could sell them for very cheap prices, resulting in losses for the primary producer. Therefore, the accurate header is ‘Buyer cleverness may lead to bankruptcy’.

Answer 5: i - No giveaways for addictive products

Explanation 5: It has been argued that gratis marketing for illegal substances and legal substances like tobacco is forbidden to avoid it from becoming a substance dependence problem. Therefore, the correct heading would be ‘No giveaways for addictive products.

Answer 6: v- A novel method of dual marketing ruled out

Explanation 6: It is believed that anti-trust rules forbid the practice of tying or dual marketing. Thus, "A novel method of dual marketing ruled out" is the appropriate heading.

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Questions 7-9 :

Complete the sentences below.

Choose NO MORE THAN TWO WORDS from the text for each answer.

Write your answers in boxes 7-9 on your answer sheet.

Candidates need to fill in the blanks with not more than two words from the passage. 

7. The new tactic of freebie marketing ran against………… Gillette’s time.

8. Occasionally, people who buy a master product find ways of using it that get around the necessity of buying more ……………….

9. Wired never had a ………………. with its customers about the use of the barcode readers.

Answer 7: received wisdom

Explanation 7: There have been claims that Gillette's freebie marketing strategy went against the views of his peers, who thought that a high-quality product with a large profit margin was necessary to sell.

Answer 8: consumables

Explanation 8: It has been reported that some consumers discover new uses for the master product after purchasing it, perhaps resulting in fewer purchases of these consumables.

Answer 9: licensing agreement

Explanation 9: It has been said that Wired has not entered into a license agreement with its readers that would restrict their ability to use the barcode readers.

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Questions 10-13 :

Complete the summary below.

Choose NO MORE THAN TWO WORDS from the text for each answer.

Write your answers in boxes 10-13 on your answer sheet.

Freebie marketing is not permitted by law for either illegal or legal 10 ………………… products. This type of promotion of goods such as tobacco and alcohol is not considered worth 11 ……………. and has consequently been outlawed. “Tying” is also prohibited. This is when the sale of an attractive product is 12 …………………. on the purchase of another. It tends to occur when the seller takes advantage of a natural monopoly and is generally considered to be 13 ……………….

Answer 10: habit-forming

Explanation 10: The right term in this case is "habit-forming," as it has been stated that not all habit-forming products can be promoted as freebies.

Answer 11: social cost

Explanation 11: It is argued that gratis or promotion marketing for goods like tobacco has a negative social cost. Thus, "social cost" is the appropriate term in this context.

Answer 12: conditional

Explanation 12: It has been stated that the selling of a high-quality product is dependent on the sale of a lower-quality product. Tying is a marketing strategy used to increase sales of products that aren't as popular.

Answer 13: anti-competitive behavior

Explanation 13: Anti-competitive activity has been defined as manipulating the monopoly of a specific vendor or distributor. Thus, "anti-competitive behavior" is the proper term to use.

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Conclusion

To sum up, continuous practice of different kinds of reading passages will help you enhance your understanding of the true meaning and increase your reading speed, leading to a better score in the exam.

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