Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

17. Pricing Objectives and
    Policies

Text © The McGraw−Hill

Companies, 2002

502 Chapter 17

Rebates give the producer a
way to be certain that final
consumers—not others in the
channel—actually get the
price reduction. Coupons are
typically used for consumer
products, but marketers for
ThunkDesign offered a
coupon for a $30,000
discount to prompt business
customers to action.

Some Customers Get Something Extra

Many producers and retailers offer discounts (or free items) through coupons

distributed in packages, mailings, print ads, or at the store. By presenting a coupon

to a retailer, the consumer is given a discount off list price. This is especially com-

mon in the consumer packaged goods business—but the use of price-off coupons is

growing in other lines of business too.

Retailers are willing to redeem producers’ coupons because it increases their

sales—and they usually are paid for the trouble of handling the coupon. For exam-

ple, a retailer who redeems a 50 cents off coupon might be repaid 75 cents. In effect,

the coupon increases the functional discount and makes it more attractive to sell

the couponed product.

Couponing is so common that firms have been set up to help repay retailers for

redeeming manufacturers’ coupons. The total dollar amounts involved are so large that

crime has become a big problem. Some dishonest retailers have gone to jail for col-

lecting on coupons they redeemed without requiring customers to buy the products.

Clipping coupons—
more for less

Internet

Internet Exercise Catalina, a firm that specializes in targeted sales promo-

tions, set up an online system called “ValuPage.” Consumers can print out a

sheet with a list of discounts that sponsoring supermarkets redeem with “web

bucks”_which the consumer can then use for any future purchase at the

store. Go to the website (www.supermarkets.com), type in your Zip Codeonly,

and press Enterto review the system. Do you think this system will be more

or less susceptible to fraud than regular coupons? Explain your thinking.

Cash rebates when
you buy

Some producers offer rebates—refunds paid to consumers after a purchase.

Sometimes the rebate may be very large. Some automakers offer rebates of $500 to

$2,500 to promote sales of slow-moving models. Rebates are used on lower-priced

items too—ranging from Duracell batteries to Paul Masson wines.