ipl-logo

• What Is The Four Primary Reasons Why Not To Buy So Many Discounts?

488 Words2 Pages

According to (Berkowitz, 2011) he described the four most common discounts as: volume or quantity discounts, functional discounts, seasonal discounts, and allowance discounts. Many companies provide discounts to attract customers, to get rid of unwanted products, products that are about to expired, and sometimes provide price reduction for buyers who buy in large quantity. According to (Rafi, 2013) that are four important reasons why primary reason why to offer volume discounts; such as, to capitalize on the law of diminishing utility, To compete with rivals who offer them, to lock in customers, and to encourage a large order instead of a series of small ones. When it comes to volume discounts you need to find ways to entice customers to buy more; it can be done by providing discounts as they buying more. Keep in mind not all customers come is relying on discounts; some wants you to show appreciation in a different way. …show more content…

Functional discounts takes place between a manufacturer and a reseller. The resellers get that discount because they buy in large quantity, and at the end they get to charge customers full price. In other words, they get to save and make profit at the same time. Manufacturers also have to prevent price discrimination based on research (Blair, 2015) stated that, back in 1988 Congress adopted the Robinson-Patman Act to prohibit price discrimination that may lead to competitive injury. Boise Cascade was the first known manufacturer who violated the section 2 of Robinson-Patman Act. Airline companies shows is great example for price discrimination, according to (Steven, 2012) each website has a different price for the same exact

Show More
Related
762 Words | 4 Pages

If we are selling our product at £2.50 and any competitor was to sell their product at £1.50 people would be more attracted to the lower price. This means we need to set a suitable price that everyone can afford to generate more sales. Which promotional methods used depends on certain factors, for example which stage in the product life cycle is it in? Advertising is important at the launch

Read More
849 Words | 4 Pages

When firms have such power, they charge prices higher than they can

Read More
406 Words | 2 Pages

Mark Thoma from CBS News says: “When firms have such power, they charge prices that are higher than can be justified based upon the costs of

Read More
1563 Words | 7 Pages

The price usually depends on how large the product you are buying is. Vera Bradley does offer discounts on items that have a pattern that is not in season. They also have outlet stores where products are offered with deep discounts. Promotion is essential to Vera Bradley. They promote their product to a target market.

Read More
418 Words | 2 Pages

1), “Company strategies aimed at controlling costs include construction of efficient-scale facilities, tight control of costs and overhead, avoidance of marginal customer accounts, minimization of operating expenses, reduction on input costs, tight control of labor costs, and lower distribution costs.” This is the perfect example of what Ron Johnson was trying to accomplish with J.C. Penney. By keeping the prices lower than the competition, they could attract more customers to shop within the stores. The sales that J.C. Penney advertises brings more of a customer base in to browse through the store, and it usually leads to a purchase of at least one item that is marked and discounted down from the much higher, regular

Read More
866 Words | 4 Pages

The airline industry is one of the most important industries in modern society as it keeps the world connected. Two of the biggest firms in this market are Southwest Airlines and Delta Airlines. The industry is an example of an oligopoly as only a small number of firms sell their services in a market with high barriers to entry. These high barriers largely come from the capital required to purchase a jet, let alone hundreds of jets, and to operate them with pilots and a crew. In this market, both Southwest Airlines and Delta Airlines share significant market power, and the decisions one company makes impacts the other, they are highly interdependent.

Read More
384 Words | 2 Pages

Should students go to a community college? Many people ask that question, such as parents. Many students just want a job and not to stay at school for four years, or they don't have a lot money to go to college. And there are people who are just the opposite. Whoever it is, community college is an option for some student.

Read More
491 Words | 2 Pages

For example, it may not be obvious to search for a flight to a destination not serviced by Alaska Airlines on their website; while at the same time, a customer purchasing a ticket to an destination on Alaska Airlines website serviced by a code share partner may be surprised or even confused see the identifier of that airline appear on their ticket. Whereas, from the airline’s perspective, these agreements allow them to sell seats for which they hold no inventory of their own and therefore no liability, while increasing sales on their own flights when sold by the other carriers. In the end, the sales resultant from these Code Sharing agreements are win for both carriers.

Read More
806 Words | 4 Pages

Why? iii) Which departments & functions control the final pricing decisions? iv) How can pricing be changed to gain an advantage in the industry? The return on companies developing a globally recognizable pricing capability is very high.

Read More
1532 Words | 7 Pages

For example, the company evaluates competitors’ prices as basis for pricing AmazonBasics products. The advantage of this pricing strategy is that it makes selling prices more competitive, affordable and attractive to target consumers. On the other hand, the price discrimination strategy involves setting different prices for the same product. Amazon applies this pricing strategy through its different websites. For instance, the company’s prices for the same products are different between the United States and the United Kingdom, which has its own Amazon website (amazon.co.uk).

Read More
777 Words | 4 Pages

In theory, the third degree price discrimination occurs when different customers pay different prices for the same goods, but each unit sold to a given group costs the same. This actually occurs in three different ways. First of all, most hotels offer discounts for children or seniors. This is done because the demand of these customer groups is more elastic. An explanation for this is simple: seniors usually have less income than adults, therefore a stay in the hotel takes up a larger share of seniors’ budget, meaning that they might not choose to purchase the good for a high price, which is affordable for adults with higher incomes.

Read More
840 Words | 4 Pages

(Nielson, 2014). Premium pricing can be define as the following; premiun pricing is to set a high price to reflext the exclusiveness of the product. It is possible for a company to charge e premium price as long as it has competitive advantage in its competing market. So far Apple has succeed in creating demand for its products which gives the company power over prices through product differentiation, innovative advertising, ensured brand loyalty, and a hype around the launced of new products. By focusing on customers willingness to pay more and mantaining a premium price at the cost of unit volume, Apple has also set an artificial entry

Read More
1728 Words | 7 Pages

Another vertical differentiation is the service on board. Most low-cost airlines try to maintain cost-effectiveness or lower their cost by not offering additional service to the passengers such as extra foods and drinks. However, Nok Air does provide a box of Auntie Anne bread, and beverages to the passengers during onboarding, while Air Asia provides nothing. This is considered to be the vertical price discrimination because all passengers agree that having some foods and drinks during on boarding is better, but there is no guarantee that food served by Nok Air is the best choice for them.

Read More
2457 Words | 10 Pages

For instance, if a firm faces a high level of demand, it has an incentive to increase the price to reserve some products for later customers who may be willing to

Read More
721 Words | 3 Pages

Furthermore, customers may find lower prices or higher discounts with a small number of firms in the oligopolistic market. The others will also cut prices to prevent losing their market share when a business started to cut down its price. Firms might have to sacrifice some profits in order to keep customers or reduce the rivals while lower prices to benefit consumers. For example, customers can find discounted air fares which allow them to enjoy the best flight deals with Air Asia.

Read More

More about • What Is The Four Primary Reasons Why Not To Buy So Many Discounts?

Related Topics

Open Document