Rebates are partial refunds offered by retailers of expensive products. Refunds and rebates temporarily enhance the value of a product. However, rebates can hurt profits when many consumers wait for a promotion rather than pay the normal price. I. Displays 1. In-store promotions are popular ways of communicating with shoppers as they are in the process of deciding what to buy.
Displays also satisfy the merchandising needs of channel partners.
B. Trade Allowances 1. Marketers can use trade allowances to reward value-chain partners for promoting products to customers. Many trade allowances take the form of cash payments. Often marketers ship extra allotments of products when wholesalers or retailers buy a minimum quantity. Some value-chain partners abuse trade allowances by engaging in forward buying and diverting.