Question

Dell sells to both individual customers through its site as well as through retailers such as Best Buy. Sales have been down lately as a competitor just came out with a new, popular product. Dell wants to offer an additional inducement to encourage its customers to buy. It decides to send a specified amount of money to consumers who purchase one of their more expensive computers. The consumer will receive a form that they will need to fill out and mail to Dell to receive the money. Dell also wants to encourage resellers to promote the product, so it agrees to pay resellers certain amounts of money for providing promotional efforts like advertising or point-of-purchase displays.

Refer to Scenario 18.2. As the scenario describes, Dell plans to create a sales promotion in which it will send a specified amount of money to consumers who purchase their line of more expensive computers. This is most likely a _______.

Answer 1

Dell is likely to use a rebate as an inducement for consumers to buy their more expensive computers, as well as offer promotional allowances to resellers. In addition, money-back guarantees can also serve as an inducement for potential buyers, mitigating perceived risk and encouraging sales.

Step-by-step explanation:

Dell’s strategy of sending a specified amount of money to consumers who purchase their higher-end computers is most likely a form of sales promotion known as a rebate. A rebate is an amount paid back or a discount given after the purchase has been made as a way to encourage the sale of the product. In the case of resellers promoting Dell products through advertisements or in-store displays, Dell is likely offering a promotional allowance or incentive, which is also part of its sales promotion efforts.

In the context of sales promotions, strategies like money-back guarantees can be highly effective, especially for companies that sell products online or through mail-order catalogs. These guarantees serve as a commitment to quality and reduce the perceived risk from the customer's perspective, thereby making potential buyers more comfortable with the purchase despite not being able to see the product in person beforehand. This trust-building measure can also act as an inducement to purchase.