Core Concepts of Marketing

(Marcin) #1

238 CHAPTER 9 PRICINGTHEPRODUCT


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AD9.2 Arebatecanbeaveryeffectivepricediscount.

toeachpurchaseandisintended toencouragebuyerstomakelargerpurchases. Thismeans

thatthebuyerholdstheexcessfl1erchrdiseuntilitis used,possiblycuttingtheinventory

costofthesellerandpreventingthebuyerfromswitchingtoa competitoratleastuntilthe
stockisused.Acumulativequantitydiscount appliestothetotalboughtovera periodof
time.Thebuyeradds tothepotentialdiscountwitheachadditionalpurchase. Sucha pol-
icyhelpstobuildrepeat purchases. Buildingmaterialdealers,forexample,Ladsucha pol-
icyquiteuseful inencouragingbuilderstoconsentratetheir purchasewithonedealerand
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