Rebates are amounts paid by way of reduction, return, or refund on what has already been paid or contributed. They are a type of sales promotion that are used as incentives or supplements to product sales. They are quite popular because they allow organizations to offer lower sale prices, without affecting their net profits because only part of the customers actually get the rebate. Customized pricing, on the other hand, refers to the situation in which a company tailors its pricing to different market segments: those who can pay the higher price and those who are willing to pay only the lower price. So why are rebates viewed as an example of customized pricing?
I believe rebates are viewed as an example of customized pricing because they give different segments of the population the opportunity to purchase the same product at different prices. By making use of rebates, companies separate their consumers into those who can afford and are willing to pay the original price of a product and those who are more price sensitive and to whom the sale price is an actual buying incentive. Sure everyone gets offered a rebate but for most people the rebate isn’t really a deal maker or breaker; the majority won’t bother to redeem it, while the lesser part of the consumers, those who actually need it, will. The strategy of rebates results in attracting different groups of people who want or need a product, yet at the same time are willing to pay different amounts for it. This consequently leads to the company gaining the broadest possible customer base with a single offering.
Customized pricing is a very current solution for organizations looking to get the most out of the products they have; a clear example of this is


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