Be cautious when promoting business sales, solely on the basis of price rebate alone. Other options could also be looked at, such as differentiation on function, quality among others.
Price rebate leads to eroding profit margin in the long term. It can well very well in the short term.
In its bid to beat the competition coming from Japanese Automobile companies, Nissan and Toyota. General Motors, the market leader then with the first mover advantage resorted to price rebate, giving cash upfront for every car purchased infofurmanner.de.This strategy worked very well in the short term, but in the long run cost the company its fortunes,
The Japanese company’s who had embraced the quality management concept, spearheaded by Edward Deming (American business consultant) ensured that quality is inbuilt in the production cycle right from the beginning to the end, Saving so much in inspection cost to identify defects. The cars also saved a lot of fuel- fuel economy.
This worked well for the Japanese company’s who were able to penetrate the US market, and eat into the market share of General Motors and others.
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