Concept check The grocery business is one of the most competitive of business, e
ID: 378562 • Letter: C
Question
Concept check The grocery business is one of the most competitive of business, especially when it comes to getting a new pro from a small manufacturer onto supermarket shelves. 1 typical supermarket carries about 30,000 different items, but some 15,000 new products are introduced each year. There is no way what 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-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 $5000 for four feet of shelf space per sore per year Ouestion: Are "slotting fees" simply a way of life in highly competitive industries where the fight for shelf spac intense? Might there be other approached? Discuss all duct he e is 5 31Explanation / Answer
A slotting fee or the slotting allowance is the pay-to-stay which is the spending of fixed trade. It is a fee charged to the manufacturer by the retailers of supermarket distributors so that their product can be placed on the shelves. The slotting fee varies depending on the product, manufacturer, and conditions of the market. The slotting fees are paid by the manufacturer of products in order make customers aware of the varieites and products available in a space which increases sales.
The slotting fee is not simply the way of life for the competitive industries, but it makes visitors in supermarket aware of the different and new products which are offered for sale. A slotting fee is paid to a retailer by food and beverage suppliers in order to have their products featured on its store shelves and stored in its warehouse. The slotting fee covers the cost to enter product data in the retailer’s inventory system and program its computers to recognize the product’s unique barcode.
The other approach which can help a manufacturer to get space in the supermarket is through recognizing the role of logistics. Understanding how management of products and arrangements in supply chain management will help in getting available space. The cost of stocking the product if reduced will help in better placement in the stores and shelves.Detailing estimated inventory planning and filling of replishment order will be suitable.
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