Rebate prices and market environment.doc

 PAGE \* MERGEFORMAT 8 Rebate prices and ‘market environment’ I do not know since when, the domestic has formed a certain scale of production of some manufacturers have been offering rebates for business promotions, initially with annual sales of 0.5%. 1%, then gradually expanded to 1%. 3%, as time goes by, the need for competition, which from the manufacturer’s rebate to commercial enterprises, and gradually from the sales of 3% to 5%, 8%, 10%, worse were increased to more than 15%. Followed by the first commercial units are not lonely, have played less than exfactory sales banner sales will be provided by the manufacturer rebate rate of some or all of deduction paste it into the price of commodities, one time, ex-factory price has become the highest price the market wholesale price of commodities generally will be lower than ex-factory price, which is very popular on the market as a commercial phenomenon. In this phenomenon can not be considered unreasonable given the fact that there is, it certainly has a reasonable, but consider carefully the implementation of this approach after the actual results, you will find with the original intention was a far cry. The implementation of the original intention of the original rebate is to encourage business units to its own brand to expand sales, increase market share in order to achieve the purpose of increasing corporate profits. In fact due to the production of large enterprises with high rebates to stimulate business, the last turn into rebate is equivalent to price cuts, rebates for businesses to manufacturing enterprises as the basis for a price war, so that not only did not increase the profits of enterprises actually fell the enterprise’s profit. There are even some good businesses in order to reduce the price of other brands, resulting in poor sales as the reason for its own brand, forcing manufacturers to force price cuts, added to this price war going. There is a view: This part of the weaker price compe