This activity is important because the final price serves many functions for the firm. The final price must be high enough to cover the firm's costs and achieve the firm's objectives, but also low enough to be attractive to consumers. To set the final price, marketing managers begin with the list $($quoted$)$ price and then make price adjustments. Marketing mangers use both discounts and allowances, which are reductions from the list price given, as a reward for performing an activity to arrive at the final price. The four most common types of discounts are $(1)$ quantity, $(2)$ seasonal, $(3)$ trade $($functional$),$ and $(4)$ cash.

The goal of this exercise is to demonstrate your understanding of the four types of discounts used by sellers.

Roll over each example to read the description of the discount, then classify it as an example of a quantity, seasonal, trade $($functional$),$ or cash discount.

Rubbermaid

Pepsi

Chiquita

Water

Quantity

Seasonal

Trade

$($Functional$)$