Premium price for paper-shredding machines

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Reference no: EM131796142

What would you do? A pricing consultant has suggested that your firm set a premium price for the paper-shredding machines it sells through office equipment stores—but that there be a $20 mail-in rebate with each unit. The consultant says his research shows that, when an office shredder wears out, it’s usually the administrative assistant who is sent to buy a replacement. The consultant says that many of these buyers will pick your firm’s shredder, in spite of the higher price, so that they can pocket the rebate. At the end of his report he says, “This is an accepted way to motivate the decision maker. Think about all those executives who rack up frequent-flier miles on business trips and then use the free tickets they get for family vacations.” Your boss has left the decision up to you. Would you follow the consultant’s advice? Why or why not?

Reference no: EM131796142

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