Prices are anticipated to remain flat as the economy recovers and businesses increasingly shift advertising budgets toward mass media as opposed to rebate promotions.
Los Angeles, CA (PRWEB) July 16, 2014
Rebate management services have a buyer power score of 4.2 out of 5, signifying a high degree of buyer negotiating power. As a market currently in decline, many factors help buyers to leverage better deals on rebate management prices. “Most notably, these factors include flat, stable price trends, a wide availability of substitutes and little specialization within the service,” says IBISWorld business research analyst Michelle Hovanetz.
Rebate management services run countercyclical to the overall economy. Accordingly, service prices rose during the recessionary period as a result of increased demand for low-cost promotion strategies. Buyers purchased rebate services to help drive sales during an otherwise stagnant period in retail. “As the economy has recovered, this trend has reversed,” says Hovanetz. In response to higher levels of corporate profit and larger advertising budgets, buyer demand has shifted toward higher-cost mass media advertising strategies in the three years to 2014. Falling demand is anticipated to continue through 2017, halting price growth and benefiting buyers.
The plethora of advertising alternatives available to buyers is perhaps the greatest source of leverage in negotiations. The existence of substitutes in the form of mass media advertisements, traditional sales and deal-of-the-day promotions, among others, provides buyers with many advertising opportunities beyond rebate promotions. Additionally, buyers have the option of implementing rebate programs in-house. The wide availability of substitutes has led to falling demand in recent years, thereby encouraging suppliers to negotiate with buyers to maintain revenue streams.
Lastly, buyers benefit from little specialization in the market. Suppliers of all sizes provide essentially the same services, albeit on different scales. Once the necessary supplier size and capacity is determined, buyers have little trouble finding suitable suppliers. The standardization among vendors allows for low switching costs because buyers can freely move from supplier to supplier with little risk of missing out on valuable expertise. Major vendors include Arrowhead Promotion & Fulfillment Co. Inc., DirectConnect Group Ltd., KBM Group and Marketing Resources Inc. For more information, visit IBISWorld’s Rebate Management Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of rebate management services. Rebates reward businesses and customers for using specific products and brands by providing them with money back on a purchase. Rebate management service providers assist clients throughout the rebate process and typically review and process scanned, handwritten or online rebates. In addition, many services help clients understand the laws surrounding uncashed rebate checks and handle rebate validation, fraud mitigation and reward distribution. This report excludes other sales and business promotion activities, such as coupon publishing, merchandising, promotional program management and advertising management services. This report also excludes rebate management software.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.