Suggested Retail Price.
September 18, 2010 by admin
Filed under Uncategorized
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #
Cash discounts are price reductions offered by sellers to encourage buyers to make prompt payment. Cash discounts are usually stated on a bill in terms such as: 3/10, net 30.
This means that the amount must be paid within thirty days, and a 3 percent discount will be made if the amount is paid within ten days. In addition, in 1982, some oil companies such as Exxon began offering a 4 percent discount for customers paying cash. Smart buyers will continue to take advantage of cash discounts because they are a good financial opportunity.
Price lining is commonly found in retailing. It occurs when a store offers its products at a limited number of prices. A shoe store, for example, may offer its lowest quality styles all at $25 a pair, its middle quality styles at $35 a pair, and its highest quality styles at $45 a pair. Price lining is best illustrated by Sear’s pricing policy of “good better best.” This policy is designed to make buying decisions easier and to produce faster stock turnover.
Suggested Retail Price
In the mid 1970s Congress passed legislation designed to eliminate fair trade laws. The fair trade laws had been passed in the 1930s and allowed manufacturers to sue a retailer who did not adhere to their set retail price. The 1970s legislation meant that manufacturers and wholesalers could no longer force retailers to sell goods at a set price. Today, suggested retail prices still appear on labels of such products as books and clothing, but these prices are suggested prices to be used strictly as retail price guides.
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Although the FTC allowed Levi Strauss to maintain control of their own distribution channels, it forbade them to require retailers to sell their products at “suggested” retail prices. Since fair trade laws were eliminated by Congress in the mid 1970s, Levi Strauss must allow retailers to mark up products as they see fit. Furthermore, the Robinson Patman Act forbids Levi Strauss from giving special allowances to one middleman if it cannot offer them to all. Levi Strauss, however, can legally offer various trade, quantity, and cash discounts to all middlemen for performing various marketing functions.
