Quantity Discounts: Managerial Issues and Research Opportunities

Abstract

Marketing managers frequently administer pricing policies involving substantial quantity discounts. However, our understanding of the precise role of these discounts, and their design, is quite limited. This paper reviews and integrates the economics and marketing literature and presents a detailed analysis of the policies of four firms in order to: (i) specify the variety of motivations for quantity discounts, (ii) provide guidelines to managers in designing quantity discount schedules, and (iii) set out the most fruitful directions for future research.