Essay: Rebates Reduce the Risks for the Players in the Market
Rebates reduce the risks faced by all major players in the market. The major players are the firms producing products and the consumer. The retailers are also considered market players largely. To a consumer, when a producer reduces the price, the risk in terms of product cost is reduced hence making them to do away with uncertainties when beginning to consume a new product or unfamiliar product.
Through the rebates that reduce the prices for newly, launched product acts as a catalyst for consumer to wish to try a new product. When the consumers have tried and trusted a product, they are likely to continue to purchase the product even when the rebates are removed or lowered. In reference to firms producing new products, the price subsidies in form of rebates reduce the risks associated with innovation of new products. This because the high cost of innovating a new product, which can either succeed or fail in the uncertain global world is cut by the price subsidy. It is essential to note that innovations play an important role in the development of economies and companies at large. Some firms like the California’s national appliance and lighting manufacturers in California claimed to have introduced new products with the objective enjoying the benefits brought about by the rebates (world Bank 88)..