Discount Policy
A discount policy refers to a set of guidelines and strategies implemented by businesses to offer reduced prices on their products or services. This can be used as a marketing tool to attract customers, clear out excess inventory, or encourage bulk purchases. The policy outlines the conditions and duration of the discounts, as well as any restrictions or limitations.
3 Key excerpts on "Discount Policy"
eBook - ePubThe Strategy and Tactics of Pricing
A Guide to Growing More Profitably
- Thomas T. Nagle, Georg Müller(Authors)
- 2017(Publication Date)
- Routledge(Publisher)
...Once customers recognize this pattern, they will delay purchases until late in a quarter and buy forward to cover their expected needs in the following quarter. Sellers often misinterpret the declining sales at regular prices and the increasing portion of their sales at discounted prices as a sign that customers have become more price sensitive. In fact, they are only responding to incentives for how to get a better deal on what they would otherwise have been willing to buy at higher prices. Periodic, predictable discounting is just one of many ways that sellers undermine their pricing power by making decisions for short-term sales gains that adversely affect buyers’ expectations and future behavior. When sellers adopt a policy of making price exceptions when necessary to meet the lower price of a competitor, they create the expectation among buyers that creating a competitive process for their business will be rewarded. Consequently, buyers create purchasing policies that require multiple bids for each order or create a reverse auction for awarding an annual contract. A pricing policy is a rule or habit, consistently applied, that defines the criteria under which a company will change a price for an individual customer, for a limited period of time or for particular transactions. To avoid creating customer expectations that a seller’s prices can be manipulated by adopting purchasing policies that disconnect price from value, sellers facing repeat customers need to anticipate the expectations that their pricing policies create for customers. Fortunately, a company can change its customers’ expectations by adopting pricing policies designed to influence those expectations positively. Some retailers have changed the expectations that it is better to wait for a sale by offering “30-day price protection,” enabling deal-sensitive shoppers to buy now and receive a credit for the difference between the price paid and a sale price offered within the next 30 days...
eBook - ePub- Keith Porter, Paul Smith, Roger Fagg(Authors)
- 2007(Publication Date)
- Routledge(Publisher)
...Government policy DOI: 10.4324/9780080492810-12 Chapter objectives In this chapter you will: Review major policy developments and debates in economic, industrial and education policy Consider the implications of developments in these fields for markets for goods and services, and for employment and labour markets Assess the major ways in which organizations seek to influence the development of government policy. Chapter introduction In this chapter, we examine those areas of government activity that impact directly on organizations and the activities of HR professionals in particular. We begin our review of economic policy by focusing on competition policy and then proceed to consider employment policy. The focus then shifts to industrial policy, followed by educational policy. We conclude with an examination of how the direction of government can be influenced by lobbying activities. 12.1 Government policy to regulate the competitive environment Sometimes firms will collude by agreeing on prices, market share or advertising expenditure. This collusion reduces the uncertainty faced by these firms. Formal collusive agreements are known as cartels, which are prohibited in Britain under restrictive trade practices legislation, unless the firms involved can prove to the Restrictive Practices Court that their agreement is in the public interest. 12.1.1 The ‘public interest' and competition policies The real world is characterized by imperfect markets, with firms having different degrees of market power. Governments consider the extent to which this market power will be in the public interest when they develop legislation to deal with monopolies and oligopolies. Market power, from the consumer's point of view, seems inevitably to be undesirable, because firms are able to exploit the powerless consumer. The greater the firm's power, the higher will be its prices relative to its costs of production...
eBook - ePub- Paul R. Portney, John P. Weyant(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...15 Discounting and Public Policies That Affect the Distant Future William D. Nordhaus W ILLIAM D. N ORDHAUS is A. Whitney Griswold Professor of Economics at Yale University. A discount rate is a price used to compare future and present goods. This paper addresses the following issue: When the implications of conventional benefit-cost tests are ethically unacceptable, how might they be modified? I examine this question by employing different rules in an empirical model of global warming. The major conclusion is that ad hoc manipulation of discount rates is a very poor substitute for policies that focus directly on the ultimate objective. Moreover, within the class of policies that distort discount rates, targeted distortions in the specific sectors are less harmful than distortions of discount rates in the entire economy. The best approach will generally be to identify the long-term objective and to directly override market decisions or conventional benefit-cost tests to achieve the ultimate goals. Focusing on ultimate objectives shows trade-offs explicitly, makes the cost of violating benefit-cost rules transparent, and allows public decisionmakers to weigh options explicitly rather than allowing technicians to hide the choices in abstruse arguments. Introduction Important issues that affect the distant future pose deep difficulties for public policy. Some obstacles are political, such as getting elected officials with two-year electoral cycles to focus on problems beyond their election horizons. Other issues are complicated by intractable uncertainties about what the world will look like in a century or more. But at a deeper level, it is apparent that our conventional tools of economic analysis are poorly designed to deal with long-term investments. Like distant objects reduced by the perspective of space, distant economic events are diminished by discounting to such tiny magnitudes that they become negligible in the standard economic benefit-cost calculus...
