An Operational and Ethical Dilemma Relating to Layout Theory Although buried by mass customization and a proliferation
Question:
An Operational and Ethical Dilemma Relating to Layout Theory Although buried by mass customization and a proliferation of new products of numerous sizes and varieties, grocery chains continue to seek to maximize the payoff from their layout. Their layouts include a marketable commodity - shelf space - and they charge for it. This charge is known as a slotting fee. Recent estimates are that food manufacturers now spend some 13% of sales on trade promotions, which is paid to grocers to get them to promote and discount the manufacturer’s products.
A portion of these fees is for slotting, but slotting fees drive up manufacturer’s cost. They also put the small company with a new product at a disadvantage, because small companies with limited resources may be squeezed out of the marketplace. (Sometimes called the “Home Depot phenomenon”.) Slotting fees may also mean that customers may no longer be able to find a special local brand.
Required:
How ethical are slotting fees?
You are to argue both sides of the question without bias or a preconceived opinion. In essence, you are arguing with yourself but as if each side of the question is with merit. . Your response should be in the form of two paragraphs – one that slotting fees are ethical and the other to the contrary – with bullet points for each position. (No, there is no “maybe”; take a stand.) Only at the end - in a third paragraph - will you summarize your final position AND a statement as to whether this was your initial position or if it changed as you argued with yourself in the mirror.