Through one of your top salespeople, you have learned that a large drugstore chain is unhappy with the price discounts it is receiving. The salesperson is convinced that if the chain does not get an additional discount, they will stop carrying the brand, resulting in a loss of about 2 million units in sales over the next year. An analysis of the cost of selling to the chain does not indicate any cost justification for an additional discount, and other sales representatives are concerned about the effects a discount to the chain would have on their customers. Should you offer the discount or not?

1. Offer the additional discount to the chain. (Cost: $1 million)

2. Do not offer the additional discount.