Allowance, in the context of promotional strategy, is a financial reward or promotional funds paid by the manufacturer to retailers or wholesalers. This payment is made in cases where there is a formal agreement between them to carry out specific activities aimed at better presenting and promoting the manufacturer’s products.
Conceptually, a discount is a form of push strategy that stimulates the distribution channel. These funds can be directed to cover in-store advertising costs (Promotional Allowance), better shelf positioning (Shelf Allowance), conducting special demonstrations or covering part of the inventory costs. Through these discounts, the manufacturer effectively buys better visibility and support from its trading partner.
