You have been hired by a regional supermarket chain as the candy andsnack buyer. Your shelves are dominated by national firms such asWrigley’s and Nabisco. The chain imposes a substantial slotting fee toallow new items to be added to their stock selection. Managementreasons that it costs a lot to add and delete items, and besides, theseslotting fees are a good source of revenue. A small, minority-operated,local firm produces several potentially interesting snack crackers and aline of gummy candy, all with natural ingredients, added vitamins,reduced sugar, and a competitive price—and they also happen to tastegreat. You’d love to give the firm a chance, but its managers claim theslotting fee is too high. Should your firm charge slotting fees? Areslotting fees fair to the relevant shareholders—customers, stockholders,vendors?
You have been hired by a regional supermarket chain as the candy andsnack buyer. Your shelves are dominated by national firms such asWrigley’s and Nabisco. The chain imposes a substantial slotting fee toallow new items to be added to their stock selection. Managementreasons that it costs a lot to add and delete items, and besides, theseslotting fees are a good source of revenue. A small, minority-operated,local firm produces several potentially interesting snack crackers and aline of gummy candy, all with natural ingredients, added vitamins,reduced sugar, and a competitive price—and they also happen to tastegreat. You’d love to give the firm a chance, but its managers claim theslotting fee is too high. Should your firm charge slotting fees? Areslotting fees fair to the relevant shareholders—customers, stockholders,vendors?
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 5DRQ
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You have been hired by a regional supermarket chain as the candy and snack buyer. Your shelves are dominated by national firms such as Wrigley’s and Nabisco. The chain imposes a substantial slotting fee to allow new items to be added to their stock selection. Management reasons that it costs a lot to add and delete items, and besides, these slotting fees are a good source of revenue. A small, minority-operated, local firm produces several potentially interesting snack crackers and a line of gummy candy, all with natural ingredients, added vitamins, reduced sugar, and a competitive price—and they also happen to taste great. You’d love to give the firm a chance, but its managers claim the slotting fee is too high. Should your firm charge slotting fees? Are slotting fees fair to the relevant shareholders—customers, stockholders, vendors? |
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