D. Price Discounts and Allowances 1. Discounts and allowances help you maintain relationships with organizational customers and strengthen your competitive position. A discount gives customers a direct price break for taking a specific action such as buying when or how you want them to buy. Quantity discounts , or price breaks per unit, allowed on large-volume orders, give customers a reason to buy more from you. Noncumulative quantity discounts are applied one order at a time.
Seasonal discounts reward customers for buying products out of season.
Allowances a. Allowances are pricing adjustments that indirectly lower the price in exchange for taking an action such as promoting the product. Allowances can help you influence customer buying behavior. Trade-in allowances are reductions in price offered by marketers in exchange for a product from the customer. Rebates are refunds to customers who buy certain products during a specific period. Promotional allowances are used to reward resellers for promoting products to customers through personal selling or advertising.