Question

modern decorating, inc. shipped the wrong color of paint to a customer. the customer agreed to keep the paint upon being offered a 15% price reduction. the price reduction is an example of a:

Answer 1

A 15% price reduction offered by a company due to a mistake is an example of a concession, which is a standard strategy businesses use to resolve issues and maintain customer satisfaction, especially for online and catalog sales.

Step-by-step explanation:

The price reduction offered by Modern Decorating, Inc. to the customer for keeping the wrong color of paint is an example of a concession. In the context of business transactions, a concession is often made to resolve a complaint or an issue that arises after the sale of goods or services. In this case, the 15% price reduction serves as an incentive for the customer to retain the paint despite the mistake, mutually benefitting both parties by avoiding the potential costs and inconvenience of return shipment and additional administrative processes.

Such approaches in business, like offering a concession or money-back guarantees, are strategies that companies may employ to ensure customer satisfaction and loyalty. They are particularly relevant in the realm of online and catalog sales, where customers cannot physically inspect products prior to purchase.