Discount

“Discount” refers to the “pricing rate ” of the products which are lower than the listed price which is marked in the products. Discount is detected by the percentages and it is the percentage of the listed price of the products. The price discounts are given to the customers by the industry or shopping centers to increase the interest of the customers and increase the sales of the products. This study discusses the pricing formula of the discount and the use of discounts. Different types of discounts are found which are given to the customers to increase the sales of the products. The discount rate is the rate of discounts in percentages which is calculated by the listed and selling price. 

4.1 Meaning and definition of Discount

Reduction of price in the items or products which are purchasable is called discounts. The money which is reduced in the products is called the discount or discount price. In another view, discounts are the amount of price which is reduced from the listed price of the products. Discounts are given to increase the sales of the products and to earn the satisfaction of the customers. The meaning of the discounts is the offer or reduction of price than the market for a listed price which is given to the customers. The definition of discount is, “reduction of price or value of an item or product”. Another definition of discount is, “the pricing system in which the price of a commodity (goods or services) is lower than its marked price listed price.” 

The discount of a product is the offer or refund of products which are offered to the customers to encourage the sales of the product. The reduction of the prices which are supplied by the shops to the customers is known as the discount. Discount helps to get more customer satisfaction and helps to improve the profit of the company by increasing sales. After discount or reduction of the price, the item is sold at which rate those are the actual or selling price of the products. 

4.2 Types of Discount

There are “three types” of discounts found and those are; “trade discounts, quantity discounts, and promotional discounts.” Different types of discounts are discussed below; 

Trade discounts: 

Trade discounts are those types of discounts which are given by the distributors of the products to the owners of the shops. These discounts are given by the reduction of prices to the owner of the shops. 

Quantity discounts:

Quantity discounts are given to the customers and this is given to help the customers to purchase huge quantities of the items. This helps the industry to increase the number of customers and to sell vast amounts of products in less time. 

Promotional discounts:

Promotional discounts are given when a company or industry promotes any new products and tries to get in the market. This is also given for the previous stock clearance of the stock and this attracts more customers as they can purchase more products at a low price. As an example of promotional discount the company or industry is using the tag line “Buy 2, Get 1 Free”.

Those various types of discounts help the owners and sell more products in less time. This also attracts the customers to buy more products and this helps the company or industry to increase their number of customers by giving them satisfaction. 

4.3 Formula of Discount

There are some formulas that are used to calculate the discount price of the products. The discount price of the products is calculated with the help of the marked price of the products. The formula which is needed to calculate the discounts of the products which are discussed below;

To calculate discount = “List Price – Selling Price”

Discount (%) = “(Discount/List Price) × 100” or

“(list price – selling price)/ list price * 100”

The list price is defined as the price which is seen in the tag or label of the products or items.

Selling price is defined as the price at which the products are sold. Discount is the amount that is reduced from the tag labeled list price. Those formulas help to calculate the discount of the products and this helps to sell more products in less time. 

Conclusion 

It is concluded that this study is developing a strong idea about the discount and rate of discounts, types of discounts and use of these discounts. The rate of discounts is the number of discounts in percentage. This helps to calculate the selling price of the products and this is possible to multiplication of discounts price from the list price. There are three types of discounts which are given to the customers and owners. The power is getting discounts from the distributors which help them to sell the products and get more profits.  Therefore it is concluded, the discounts help the owners of the industry to sell their products more and get more profit and to earn the satisfaction of the customers.