Q.'Ultra Televisions Ltd.' is offering its 90'' TV sets at a discount of ₹ 15,000 for a period of one month starting from 1st March, 2019. Identify the sales promotion activity used by 'Ultra Televisions Ltd.'.
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Start your 14-day free trial to unlock the full solution →The sales promotion activity used by 'Ultra Televisions Ltd.' is a Rebate, which is a temporary reduction in the price of a product.
In the competitive landscape of modern business, companies employ various strategies to stimulate demand and achieve their sales objectives. One crucial element of the promotion mix is sales promotion, which encompasses short-term incentives designed to encourage immediate purchase or sale of a product or service. Unlike advertising, which builds long-term brand image, sales promotion aims for quick, measurable results by offering direct inducements to consumers, dealers, or the sales force.
The scenario presented, where 'Ultra Televisions Ltd.' offers its 90'' TV sets at a discount of ₹ 15,000 for a period of one month, is a clear example of a sales promotion activity known as a Rebate.
While often used interchangeably in common parlance, in the context of marketing management, a 'discount' generally refers to a reduction from the list price, whereas a 'rebate' specifically implies offering products at special prices, less than the listed prices, for a limited period. The time-bound nature of Ultra Televisions' offer (one month) makes 'Rebate' the more precise term as per NCERT definitions.
A rebate is a direct price reduction offered on a product for a specified, limited duration. Its primary purpose is to create a sense of urgency among potential buyers, prompting them to make a purchase decision within the offer period. By reducing the effective price, companies make their products more attractive and accessible to a wider segment of consumers who might be price-sensitive or waiting for a better deal.
Companies like Ultra Televisions Ltd. might use rebates for several strategic reasons:
- Boosting Sales Quickly: A significant price reduction can dramatically increase sales volume in the short term, helping to meet quarterly targets or improve cash flow.
- Clearing Excess Stock: If a company has accumulated a large inventory of a particular model, a rebate can be an effective way to move products off the shelves before newer models arrive or to avoid storage costs.
- Attracting New Customers: A compelling rebate can entice customers who might not have considered the brand or product at its original price, thereby expanding the customer base. …
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