The Impact of Bonus and Rebate Schemes on Dealer Performance in Turkey's GSM Sector

Abstract

The aim of this paper is to explore the bonus and rebate schemes offered to exclusive dealers in the GSM sector in Turkey. Specifically, it examines how operators and handset manufacturers provide special incentives, such as bonuses and rebates, to dealers who exceed certain predefined sales targets. These incentives are designed to motivate dealers to achieve higher sales volumes and promote specific products or services, ultimately benefiting both the manufacturers and operators. By studying these practices, the paper aims to provide insights into how bonus and rebate schemes influence dealer performance and market strategies in the Turkish GSM sector. The study develops a theoretical model of dealer and manufacturer behavior, drawing on key observations about the mobile phone market. This model aims to explain how dealers and manufacturers interact, particularly in relation to incentive structures such as bonuses and rebates. By analyzing the dynamics between dealers, operators, and handset manufacturers, the model seeks to capture the factors that influence dealer behavior, including how they respond to special incentives for exceeding sales targets. It also examines how manufacturers design these incentive schemes to drive dealer performance and maximize market share, providing a deeper understanding of the strategies at play in the mobile phone industry. The analysis offers important insights into the preferences of dealers regarding sales incentives. For instance, it reveals that rebates are generally not favored by the owners of dealers in comparison to bonuses. Dealers seem to prefer receiving direct bonuses for exceeding sales targets, as opposed to deferred or conditional rebates. This preference may be linked to the immediacy and clarity of bonuses, which provide more tangible and immediate rewards for their efforts. The authors further validate these findings through empirical testing of their theoretical model. Their results confirm the theoretical predictions, demonstrating that bonuses are more effective than rebates in motivating dealers to achieve higher sales performance. These findings provide valuable implications for operators and handset manufacturers when designing incentive structures, suggesting that bonus-based incentives may be more successful in driving dealer engagement and boosting sales in the GSM sector.