Havent you come across this 'buy 2 get 1 free ' offer often in supermarkets? Even though you do not know anything of the product you jumped into purchasing the product. It might be of no use to you in future but still you purchase . Why is it so?
Producers make use of the economic concept 'People respond to incentives'.
People have tedency to react to incentives . They cannot afford to let go off the benefits they see. They feel that if they donot accept this buy 2 get 1 offer they are actually incurring loss. This loss aversion in people forces them to get the product even if they donot want it.
Therefore one best technique that producers can use to attract more customers other than the loyal ones is by giving incentives/offers/discounts.
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