Question: Most price structures have a basic list price from which various discounts and allowances are subtracted. Discounts (not to be confused with discount selling) are

Most price structures have a basic list price from which various discounts and allowances are subtracted. Discounts (not to be confused with discount selling) are reductions from list price that are given by a seller to a buyer who either gives up some marketing function or provides the function himself. Several types of discounts are commonly used, including:

a) Cumulative quantity discounts

b) Noncumulative quantity discounts

c) Seasonal discounts

d) Cash discounts

e) Trade (functional) discounts

Allowances are similar to discounts. They are either given to final consumers, or to customers or channel members for doing something or accepting less of something. Different types of allowances include:

a) Advertising allowances

b) Push money or prize money allowances

c) Tradein allowances

d) Stocking allowances

PowerPro Electrical Supply Company sells a wide assortment of products to electricians, electrical contractors, and general building contractors in the area around Dallas, Texas. PowerPro's line includes almost everything its customers might need-ranging from wire, electrical tape, circuit breaker boxes, conduit, switches, outlet boxes, lighting fixtures, and a wide variety of electrician's tools and equipment. In addition, like most other electrical wholesalers in the area, PowerPro offers free delivery to the construction site. Despite PowerPro's efforts to promote itself as "the most economical source for all your needs," most of its customers split their business among a number of different electrical supply wholesalers. When PowerPro's owner complained about this, one of his counter clerks offered an explanation: "The person having the work done usually doesn't care what electrical supply house gets the business-so the different electricians just call whoever comes to mind first."

Question: Could discounts or allowances be useful to PowerPro Electrical Supply? Why? If so, what type would be best? Explain.

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