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Great Rebate Round

In: Business and Management

Submitted By arundeep
Words 387
Pages 2
1. This case describes one reason manufacturers might want to offer rebates rather than decrease wholesale price. Explain why this can be viewed as an example of customized pricing.
Sol:
Manufacturers will offer rebates instead of decreasing wholesale price because some people may not spend time on redeeming rebates by this, manufacturers can offer the rebate to those who really need and will redeem it and get the whole value from those who can spend money t and worry about getting the rebate. So, this will be the example of customized pricing as it customizes to both the Customers who bargain and those who are looking for the quality product without worrying about price.
2. Even if all rebates were redeemed, why might manufacturers still want to offer rebates rather than decrease wholesale prices?
Sol:
Manufacturers of the respected companies will be able to show their profits on their records and show that they have higher cash flow and rebates go as an expense on their records and this will raise their sales scale resulting in their stock value increase. Manufactures can also show records as a loss and can also get some tax exceptions on their overall profit.
3. Why do you suppose that Best Buy, rather than one of Best Buy's big suppliers such as Sony or Panasonic, is considering eliminating rebates?
Sol:
Best Buy don’t want to provide rebates on their products because they original price of Best Buy match the rebated price of other stores and by which, if they still add a rebate on top of their actual prices they will be losing a lot of money. So, Best Buy will try to match their actual price with the rebated price offered when compared to the price in other stores. Moreover, rebates take a lot of publicity and administration costs like flyers cost, labor cost etc. which Best Buy may not be interested in spending money for that purpose.

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