Essay: Reducing the Rebates
The rebates increase the companies’ sales volume and reduce the chances of their outlets failing to stock k their products. This enables firm’s quality products to penetrate the markets with ease and win a market share. It is therefore evident that rebates reduce the risks to firms and consumer along with the intermediaries who sell the new quality products in a market niche. In order for rebates to achieve their optimal benefits to the players in the market and effectively reduce the market risks and uncertainties, the consumers must find the new products being introduced in the market to be superior to the already existing substitutes in the market.
As the consumers become loyal to the new superior products being introduced in the market, the rebates should subsequently be reduced and the companies will continue to enjoy a reduction of the market share. According to Hewitt, Pratt, and Smith, (1999) the WashWise Program of Northwest Energy Efficiency Alliance succeeded in reducing the rebates with a reduction of their market share after introduction of the efficient cloth washers in the market. It is therefore evident that the price discounts play a very crucial role while introducing the new superior/ quality products in a market (109).