What is Allowance in Marketing?

Learn Allowance definition in marketing with explanation to study “What is Allowance”. Study allowance explanation with marketing terms to review marketing course for online MBA programs.

Allowance Definition

  • Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong



Allowance Explanation

It is a type of pricing strategy engaged with the promotion of the end product. Organizations mostly attached different rewards and benefits for their customers like bulk purchase, parsonage, promotional. Markdown, slotting and, sales allowances. Therefore, potential customer gets attracted towards the product which would help to increase company's profitability.

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