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Experience Goods


Experience Goods
Now listen to part of a lecture on this topic in a marketing class. Usually before people buy a product, they already have a good sense of how much they will enjoy it. However, there are some products whose value or usefulness cannot be known until a person has some experience with them. Such products are known as experience goods. Experience goods often cause problems for the companies that sell them because it is hard to convince people to buy something when they are unsure whether they will like it. In order to show people the value of experience goods, companies can give customers free samples or previews so that they can experience a part of the product before they buy it.

Audio resource will be added soon

#Listening Material

Professor: So let me give you an example of this. Recently, a friend of mine started a company that makes educational DVDs for children. You know, a whole series of videos that are fun to the kids but also teach them some basic reading and language skills. They're the kind of videos that elementary school teachers would show to their kids in the classroom. Now, my friend, she knew that her videos are really good, the best on the market, but teachers weren't really buying them because, well, there was no way for the teachers to know if they were any good. After all, they've never seen them, right? So here's what she decide to do. She sent one DVD, the first one of the series, to several elementary school teachers in the area without charging anything in return. It was expensive for her to do this, of course. But boy, did it pay off! The teachers who received this first video showed it to their classes. They saw that the students thought the videos were fun and more important, that they were learning from them. So once the teachers SAW how good the video was, lots of them ordered all the DVDs in the series. She kept offering the first free video to any teacher who wanted one and her DVDs became a success nationwide as more and more teachers heard about and tried them.
  • Using the example from the lecture, explain what experience goods are and how companies overcome the difficulties of selling them.