Price reduction offered to a consumer business user

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Price reduction offered to a consumer, business user, or marketing intermediary in return for prompt payment of a bill o Trade discount - Payment to a channel member or buyer for performing marketing functions o Quantity discount - Price reduction granted for a large-volume purchase o Cumulative quantity discount - Price discount determined by amounts of purchases over stated time periods o Noncumulative quantity discount - Price reduction granted on a one-time-only basis
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o Why would a seller grant such a price reduction? o Allowance - Specified deduction from list price, including a trade-in or promotional allowance o Trade-in - Credit allowance given for a used item when a customer purchases a new item o Promotional allowance - Reduces prices as part of an attempt to integrate promotional strategies within distribution channels o Minimum advertised pricing (MAP) - A manufacturer pays a retailer not to advertise a product below a certain price o Rebate - Refund of a portion of the purchase price, usually granted by the product’s manufacturer
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