Question

Topic: Student Questions

Business Scenario Problem: Bus 1100

Posted by mouton2nd on 3/11/2016 at 11:28 AM ET 250 Points
Starting up a business(fictional)for a class project and have something implemented that is very similar to this example.

There's this place where i go to get my oil changed, and as part of a special deal they have, you get a ticket for a free car wash just down the road.

What form of business is this, is it a partnership, but mainly, who pays who for this referral, how much would this possibly cost a business to have in place?

Any help would be greatly appreciated!!
Thank you
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RESPONSES

  • Posted by Jay Hamilton-Roth on 3/11/2016 at 2:15 PM Member
    Why don't you ask them how this cross-promotion is structured?
  • Posted by Gary Bloomer on 3/11/2016 at 8:16 PM Accepted
    It's a referral agreement: what's good for one business is good for the other: win, win.
  • Posted by mgoodman on 3/11/2016 at 8:53 PM Accepted
    Typically, the car wash would sell or give the tickets to the oil-change shop at a deep discount, expecting to get several new repeat customers once they've sampled all the new people.

    If the car wash is well established and better known than the oil-change shop, then the price might be higher. And perhaps the oil-change shop can get the car wash to distribute tickets or coupons for a discounted oil change as part of the deal.

    In any event, each promotional tie-in like this is negotiated by the owners/managers based on what they think they need and what they perceive the value of their respective offerings to be.
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