Question

Promotional allowance is a discount given by the manufacturer to the consumer. Comment Briefly.

Answer 1

Promotional allowances are those allowances given to a customer at the time of an advertising campaign or promotional activity.

The main goal of providing promotional allowances is to increase the demand for a product.

These are discounts given to retailers by the wholesalers so that they convince the customers to buy that particular product.

Answer 2

Promotional allowance:

• Promotional allowance is a discount or cash payments given by the manufacturer to the wholesaler, retailer or the customer for performing activities to encourage sales.
• The quality goods are provided at cheaper rates in order to expand the customer base and increase the sales of goods.
• For instance, The Wal Mart uses the promotional allowance in order to sell goods at cheaper rates and maintain promises and quality for capturing the market at large.

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