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• 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

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