Cost Implications of Bonus Pack Promotions Versus Price Discounts

Geurreiro, Reinaldo; dos santos, Ariovaldo; de SilveiraGisbrecht, José Augusto; Beng Soo Ong
June 2004
American Business Review;Jun2004, Vol. 22 Issue 2, p72
Academic Journal
This paper focuses on marketing managers of companies that have engaged in bonus pack sales promotions. The aim of the authors is to show that from a cost accounting standpoint, the contribution margin in a bonus pack offer is the same as that in an equivalent percentage in price discount. The said knowledge may have important ramifications on future bonus pack promotion plans as current conventional wisdom suggests that it would be less costly to give away products a company manufactures than to discount the price of the product if the customer were to buy higher quantities.


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