Slotting Fee
PART ONE- ETHICAL DILEMMA
INTRODUCTION
Marketing ethics can be described as the moral values that guide behavior within the field of marketing and cover issues such as product safety, truthfulness in marketing communication, honesty in relationships with customers and distributors, Pricing issues and the impact of marketing decisions on the environment and society. (Jobber, 2007).
ANSWER TO QUESTION ONE
Ethical dilemma has increased in goods as DISTRIBUTION is now seen as a means of competitive advantage because most large retailers seek to expand its operations.
Slotting allowance is the payment made by manufacturers to RETAILERS in other to secure a space on store shelves
Andrews, 2000 noted that it is very observable to see some items like Kellogg’s, Colgate, Doritos placed at the top eye level in a supermarket or at end of aisle. This is not by accident. Manufacturers pay big money for one of those slots.
These fees can range from $5,000 to $250,000 often paid cash advance and un-uniform. It is also unclear where the payments are reported. Several cases of bribery before allocation on the part of retail executives have been reported. Slotting fees can be seen as a profit by the grocery industry at their supplier’s expense. (Brandon 2002).
ANALYSIS OF SLOTTING FEES
Slotting fees limit competition. It is often the case when a large competitor offers more than a small competitor, its products was preferred irrespective of customers demand. In such cases where only the Big manufacturers products are displayed because of the prohibitive slotting fees, the customers loses because of lack of competition in the supermarket and limited choice of products to choose from. Hence the small manufacturers are denied the opportunity to succeed. This fee turns the retailer to a REAL ESTATE dealer selling space to the highest bidder.
However most retailers have argued that slotting fees would help them to cover some cost example Stocking cost and
INTRODUCTION
Marketing ethics can be described as the moral values that guide behavior within the field of marketing and cover issues such as product safety, truthfulness in marketing communication, honesty in relationships with customers and distributors, Pricing issues and the impact of marketing decisions on the environment and society. (Jobber, 2007).
ANSWER TO QUESTION ONE
Ethical dilemma has increased in goods as DISTRIBUTION is now seen as a means of competitive advantage because most large retailers seek to expand its operations.
Slotting allowance is the payment made by manufacturers to RETAILERS in other to secure a space on store shelves
Andrews, 2000 noted that it is very observable to see some items like Kellogg’s, Colgate, Doritos placed at the top eye level in a supermarket or at end of aisle. This is not by accident. Manufacturers pay big money for one of those slots.
These fees can range from $5,000 to $250,000 often paid cash advance and un-uniform. It is also unclear where the payments are reported. Several cases of bribery before allocation on the part of retail executives have been reported. Slotting fees can be seen as a profit by the grocery industry at their supplier’s expense. (Brandon 2002).
ANALYSIS OF SLOTTING FEES
Slotting fees limit competition. It is often the case when a large competitor offers more than a small competitor, its products was preferred irrespective of customers demand. In such cases where only the Big manufacturers products are displayed because of the prohibitive slotting fees, the customers loses because of lack of competition in the supermarket and limited choice of products to choose from. Hence the small manufacturers are denied the opportunity to succeed. This fee turns the retailer to a REAL ESTATE dealer selling space to the highest bidder.
However most retailers have argued that slotting fees would help them to cover some cost example Stocking cost and