Promotional+Allowance

Promotional Allowance - reduction of the wholesale price as an incentive to retailers or middlemen. A promotional allowance compensates the retailer for expenditures made promoting the product Manufacturers often give retailers allowances or discounts for performing certian promotional or merchandising activities in support of their brands. These are used to give special displays in a way of making their product stand out.

This promotional allowance could be used from the manufacturer to the wholesaler or the wholesaler to the retailer.

An example of this is a milk vending program is donating $100 to the to the retailer by the wholesaler to pay for extra cost materials and additional advertisements.

Another example is selling food to a grocer and promoting an extra allowance to display new food products in the front of the store and/or have displayed on a card board pop out display. . [] Marketing, Channel Management text Unit 5-2 page 167