The grocery business is one of the most competitive of all businesses, especially when it comes to getting a new product from a small manufacturer onto supermarket shelves. The typical supermarket carries about 30,000 different items, but some 15,000 new products are introduced each year. There is no way that all of these products will get on the shelves because there is limited space for such a host of new products. One method of helping the odds is for the manufacturer to pay slotting fees or pay-to-stay fees—in effect paying the retailers for the right to place the products on the retailers’ shelves. But these fees can be very high, sometimes as much as $5,000 for four feet of shelf space per store per year. Are “slotting fees” simply a way of life in highly competitive industries where the fight for shelf space is intense? Might there be other approaches? Discuss.
Answer to relevant QuestionsMovie studios are in something of a dilemma lately when it comes to planning their future channel strategy for distribution of their films. Electronic distribution is very profitable because, of the typical $4.99 cable ...In this chapter we discussed a number of conditions that may foster the need for channel design decisions. Name some others. Best Buy Co., the largest consumer electronics retailer in the world, is famous for its giant 40,000 square-foot “big-box” stores. This channel has served Best Buy well over the years as the end of the first decade of ...In discussing the means available to secure prospective intermediaries as actual channel members, the chapter suggests that the offer of a “partnership” by the producer or manufacturer could serve as a strong inducement. ...The Rust-Oleum Corporation is world-renowned for its anticorrosive coatings for virtually any application, for use on everything from heavy industrial equipment to consumer patio furniture. The company sells its industrial ...
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