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Discount and Allowance Pricing - PDF

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Added on  2021-06-14

Discount and Allowance Pricing - PDF

   Added on 2021-06-14

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Marketing Assignment 04Submitted to: Sir Mohammad AliSubmitted by: Rehan ullahRegistration no: SP20-BBA-022Submission date: 22 Dec, 2020Department of Management SciencesCOMSAT University Islamabad, Abbottabad CampusPrice adjustment strategies Companies usually adjust their basic prices to account for various customer differences and changing situation. Price has direct impact on the customer,
Discount and Allowance Pricing - PDF_1
customer buying behavior, business and on the overall economy. There are six price adjustment strategiesoDiscount and allowance pricing oSegment pricing oGeographic pricing oPsychological pricing oPromotional pricing oInternational pricing Discount andAllowance PricingMost companies adjust their basic price to reward customers for certain responses, such as early payment of bills, volume purchases, and off-season buying. These price adjustments—called discounts and allowances—can take many forms.Cash discount: is a price reduction to buyers who pay their bills promptly. A typical example is "2/10, net 30," which means that although payment is due within 30 days, the buyer can deduct 2percent if the bill is paid within 10 days. The discount must be granted to all buyersmeeting theseterms. Such discounts are customary in many industries and help to improve the seller’s cash situation and reduce bad debts and credit collection costs.Quantity discount:is a price reduction to buyers who buy largevolumes. A typical example might be "Rs10 per unit for less than 100 units, Rs9 per unit for 100 or more.Functional discount: also called a trade discount is offered by the seller to trade channelmembers who perform certain functions, such as selling, storing, and record keeping.Manufacturers may offer different functional discounts to differenttrade channels because of thevarying services they perform, but manufacturers must offer the same functional discounts withineach trade channel.
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