Essay: Establishing Market Rate Rebate Levels
Rebates have more advantages to the consumers and the manufacturers/ producers. They catalyze market transformation, which is the major source of the positive impacts of rebates. Though many campaigns are launched through education, advertisement and financial incentives, rebates aid in market transformation where the consumers and producers have limited information. More so, by reducing the unknown risks and temporally lowering the prices they encourage the prices to go down as the producers begin to enjoy the scales of economics. One cannot lack to mention that by hindering the natural market signals, they limit market transformation too especially when they affect the supply of services and goods. Through this, they prevent consumers form purchasing the products in the long run when they offer products at high prices or low quality products. High costs may also limit clients from buying superior products.
The marketing directors must take their time to keenly develop rebate programs that do not result to negative effects on the market. More so, the rebates must be employed and focus on the long run while taking into consideration the technology compatible with the rebate strategy. It is essential to employ the market integration strategy and establish market based rebate levels. In the effort of establishing the market based rebate level, the best option to identify the market clearing rebate level is the auction format that requires the manufacturers to give accurate and reliable information.