Examples of quantity discount in the following topics:
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- Quantity discounts are reductions in base price given as the result of a buyer purchasing some predetermined quantity of merchandise.
- A noncumulative quantity discount applies to each purchase and is intended to encourage buyers to make larger purchases.
- A cumulative quantity discount applies to the total bought over a period of time.
- For example, a 2% discount on bills paid within 10 days is a cash discount.
- Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked.
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- Chain Stores - Chain stores are able to buy a wide variety of merchandise in large quantity discounts.
- The discounts substantially lower their cost compared to costs of single unit retailers.
- Discount Houses - Discount houses are characterized by an emphasis on price as their main sales appeal.
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- Trade allowances are incentives used to encourage a retailer to stock a product such as cash discounts or promotional incentives.
- Discounts are reductions to a basic price of goods or services.
- Discounts are sometimes given to customers who buy in large quantities.
- Kids eat free promotions offer a discount on the total dining bill by offering one free kid's meal with each regular meal purchased.
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- They are used to lower prices, for discounts, free goods and value added giveaways.
- Wholesalers, retailers and other organizational groups are offered a wide array of sales promotion devices such as trade allowances or short term incentives to encourage retailer to stock up on a product, dealer loaders incentivizing product purchase and display, trade contests for selling the most product, point-of-purchase displays to create impulse buying and spiffs or bonus commissions on certain products and trade or functional discounts paid to distribution channel members for conducting sales and special events.
- For example "buy one, get one free, three for two, buy quantity and receive a lower price or percentage discounts on specific days of the week.
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- It was first recorded as a noun with the meaning of a "sale in small quantities" in 1433 (from the Middle French retail, "piece cut off, shred, scrap, paring").
- Like in French, the word retail in both Dutch and German (detailhandel and Einzelhandel, respectively) also refers to the sale of small quantities of items.
- A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesaler, and then sells smaller quantities to the consumer for a profit.
- There are many different types of retailers; department and discount stores, warehouse stores, variety, demographic retailers aimed at a specific buyer, "Mom & Pop" stores owned and operated by individuals specialty stores, general and convenience stores, mail-order, hypermarkets, supermarkets, malls, category specialists, vending machines, no-frills, self-service or automated retail (robotic kiosks seen in airports and at supermarkets), big box stores and of course on-line e-tailers.
- Retailing second hand or used goods, it enables consumers to purchase goods at deeply discounted prices or to borrow against and using the value of the product as collateral against a cash loan.
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- Airlines use several different types of price discrimination, including: bulk discounts to tour operators, incentive discounts for higher sales volumes to corporate buyers, seasonal discounts, etc.
- Airlines must also prevent business travelers from directly buying discount tickets.
- Price varies according to demand: larger quantities are available at a lower unit price.
- An example is student discounts.
- Price discrimination is very common in services where resale is not possible; an example is student discounts at museums.
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- For instance, hairdressers can go to the manufacturer to get a discount for buying in bulk.
- Such a discount might also be used to gain shelf space or a preferred position in the store.
- Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked with the product.
- The larger the purchase, the larger the discount.
- Hairdressers can go to the manufacturer to get a discount for buying in bulk.
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- Department, discount, warehouse, Mom And Pop, specialty, demographic, general, convenience, big box, automated/self serve, hypermarkets, supermarkets, malls and variety stores have adjusted traditional marketing strategies such as print advertising, media buys and in-store campaigns to incorporate the use of new technologies such as online outlets and shopping, email, texting, mobile applications, blogging, QR codes, kiosks, digital signage and online advertising.
- Sales tools such as discount coupons, price plus campaigns, up-selling and incentive programs are important components to the retail marketing mix of a plan.
- They stock a large array of unique products and sell them in small quantities spread over a number of their outlets while stocking and selling only a few popular items but distributing them in much larger quantities per outlet.
- These campaigns can be as simple as discounted pricing or as intricate and involved as contests, giveaways and loyalty programs.
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- Trade contests - Contests used to reward retailers that sell the largest quantity or highest units of a brand's product.
- Trade discounts (also called functional discounts) - Payments to distribution channel members for performing certain functions.
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- Other factors that should be considered when setting a list price include fixed order amounts, quantity breaks, promotion or sales campaigns, non-price costs (travel time to the store, wait time in the store, disagreeable elements), specific vendor quotes, the price prevailing on entry, shipment or invoice dates and the combination of multiple orders or lines.
- Much of the time, stores charge less than the suggested retail price, depending upon the actual wholesale cost of the item or if product is purchased in bulk from the manufacturer or in smaller quantities through a distributor.
- Value to the customer should be taken into consideration in addition to pricing objectives, profit maximization, geographic and buying habit considerations, discounting, rate of return, competitive indexing, the image conveyed by the price, customer price sensitivity, any legal restrictions, the category price points, price ceilings and floors and how payment is to be made.
- Some of the most common errors include; weak controls on the discounting process, inadequate systems for tracking competitor's selling pries and market share, cost-plus pricing, poorly executed price increases, worldwide price inconsistencies and paying sales representatives on dollar volume as opposed to addition of profitability measures.