Question

Name a company that uses each type of discount.

Cash discount:

Functional discount:

Seasonal discount:

Rebate:

Zero percent financing:

Answer 1

Let's discuss the meaning of each type of discount and the company using it:

Cash Discount: The discount which a customer gets from the seller, if the customer pays in cash for the goods he/she purchased. Cash discount are offered by the sellers because they get the cash immediately which acts like a liquidity for them. It also increases companies cash in flows. Any company can offer cash discount, Even hospitals offers discount on cash transactions rather than card transactions.

Functional Discount: These discounts are given to those who helps in the distribution of a products. Think of supply chain, where wholesalers, retailers are involved. In this case, wholesalers give functional discounts to retailers, wholesalers also offers display boards for free to the retailers. This type of discounts are used by the publishers. Publishers offers functional discount to book sellers in order to encourage them to sell more.

Seasonal Discount: This is a very common one. For example, when the weather changes from summer to winter, many merchants offers 'Off season discount' on clothings. Even hotel chains offers seasonal discounts during off season to encourage its sales. So, clothing companies, holidays hotel companies uses such discount techniques.

Rebate: This is like a way to wave off some price on costly items, if the customer is willing to pay immediately. For example, if a customer goes to buy Television in cash , then some sellers can offer price waive off on such costly items if the customer is willing to pay rest lump sum amount immediately. So, Electronic companies use such discounts a lot.

Zero percent Financing: This is like a loan on zero percent offered by the seller to the customer. If the customer is willing to make some payment immediately, the rest amount will be recovered by financong the item. This is a very common practice adopted by major mobile companies, even automobiles companies also offer such discounts.