Given below are two statements:
Statement I: Discount means offering products at special prices to clear off excess inventory.
Statement II: A shirt marketer’s offer of ‘50+40% Discount’ is an example of offering products at less than list price.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Statement I is incorrect but Statement II is correct.
Statement I: Discount means offering products at special prices to clear off excess inventory. — Incorrect. Offering products at special prices to clear off excess inventory is a rebate, such as a car maker’s offer to sell a car at a discount of ₹ 10,000 for a limited period. A discount means offering products at less than the list price.
Statement II: A shirt marketer’s offer of ‘50+40% Discount’ is an example of offering products at less than list price. — Correct. The shirt marketer’s ‘50+40% Discount’ sells shirts below their list price, so it is an example of discount.
NCERT (2026-27 Edition): “Sales Promotion Sales promotion refers to short-term incentives, which are designed to encourage the buyers to make immediate purchase of a product or service. These include all promotional efforts other than advertising, personal selling and publicity, used by a company to boost its sales. Sales promotion activities include offering cash discounts, sales contests, free gift offers, and free sample distribution. Sales promotion is usually undertaken to supplement other promotional efforts such as advertising and personal selling. …” “Commonly used sales Promotion activities … 1. Rebate: Offering products at special prices, to clear off excess inventory. …” “2. Discount: Offering products at less than list price. Example, a shoe company’s offer of ‘Discount Up to 50%’ or a shirt marketer’s offer of ‘50+40% Discount’.” |