BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Discounting is the process of converting a value received in a future time period to an equivalent value received immediately. For example, a dollar received 50 years from now may be valued less than a dollar received today-discounting measures this relative value.

Detailed explanation-2: -Dropping your prices can lead to a price war. Another one of the major disadvantages of discounts is that it prompts customers to compare prices. When you discount your products or services, you are forced to compete with bigger companies with a lower cost structure than a small business owner.

Detailed explanation-3: -Loyalty discounts-discounts for frequent customers. Trade discounts-discounts for trading in a similar product. Cash discounts-discounts for paying in cash instead of credit. Quantity discounts-discounts that encourage purchasing more of one product.

Detailed explanation-4: -Most Effective Discount Percentage In his book Contagious, author Jonah Berger uses The Rule of 100 to determine what makes consumers purchase. Berger explains, “The Rule of 100 says that under 100 percentage discounts seem larger than absolute ones. But over 100, things reverse.