Volume discounting

No-one would ever suggest that volume discounting always gives benefits. It is just one pricing strategy that a company might consider. Obviously it might be beneficial if offering the discount were to result in some customers buying more as a result. (Pricing strategies are not concerned with your worst case scenario - they are looking at ways of potentially generating more profit from an existing product, and it is very common to get a cheaper price per unit if you buy large quantities). However, it is certainly not always beneficial (and therefore is not a strategy that would always be followed) - the most obvious reason being the amount of discount being offered. A huge discount may well results in a large increase in sales, but if the amount of the discount was greater than the benefit of the extra sales then it would obviously be silly to offer such a large discount :-) Have you watched my free lectures on pricing where I discuss the various strategies than companies might consider? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.