What do you think about giving away a product? Does it build sales, or does it suggest desperation?

How do you get retailers to stock your product when their shelves are already full? For Brian Levin, founder of Perky Jerky, it meant talking store managers into letting him give his product away. Perky Jerky is a meat snack with a caffeine kick, described on the company’s website as “the new high-protein, ultra-premium, functional food for active lifestyles. . . .” Perky Jerky “brand ambassadors” give out trinkets and offer customers tastes of the product in stores. They find that those who try the snack ask the stores to carry Perky Jerky. One year into the business, Levin reported nearly a million dollars in sales.
Sources: http://www.perkyjerky.com/index.php/, accessed April 4, 2011; and Jason Fell, “Building a (Nearly) Million-Dollar Brand on a Startup Budget,” http://www.entrepreneur.com/article/219395#, accessed April 4, 2011.
Question 1 What do you think about giving away a product? Does it build sales, or does it suggest desperation?
Question 2 How would you budget for marketing expenses if you had hired sales representatives to give products away?
Question 3 What are some of the ways you might compensate your “brand ambassadors”? Which method do you think would work best and why?