Essay: Success of Rebates
Initially, rebates success was measured in terms of the avoided cost that a certain specified technology could be translated into a monetary gain. However, the demand sided programs were not relevant in terms of the market clearing points which is set by the market actors tastes and preferences. More so, the demand sided management program ignore the manner in which the financial incentives the rebate programs are shared among the companies. This meant that as long as the products could reach consumers, then the success of the demand sided management programs could succeed. Though the market transformation, the marketing rebates are concerned with stabilizing and creating a sustainable market environment. Therefore, there is great concern about how the resources are distributed among manufacturers. It is therefore recommended that marketing managers should ignore the demand sided management programs and adopt the market based rebates that will benefit both the manufacturers and the consumers concurrently (Gellings & Chamberlin 5).
. For this strategy to succeed, given a certain budgetary allocation, the per unit incentive shall be calculated then an actual budget will be employed to achieve the objectives of the rebate program.
In reference to the market based rebate programs, the market transformation programs needs to set after carrying out extensive market research and development and employ experts to design, implement and evaluate the program. Prior to establishment of the optimal rebate strategy, the marketing director must companies’ production cost, the capacity and the prices the consumers are willing to pay. The market research cannot provide sufficient information to offer the best incentives. The results of this is a combination of two inefficient conclusion; first, the manufacturer benefit by being offered a high rebate level that cannot be sustained by the available budget, secondly, the available rebate budget is very high while rebates are low hence the funds remain underutilized.