Slotting Fees Ethical Dilemma Marketing Assignment (Essay Sample)

Slotting Fees Ethical Dilemma
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Slotting Fees Ethical Dilemma
Slotting fees is a charge rendered to manufacturers by retailers in groceries stores, to have them secure shelf space for their products. For a long time, this product slotting practice was dominant in groceries business to offer incremental profits to manufacturers without spending on long channels of distribution. In the modern supply chain, slotting fee charges have attracted both large supermarkets and small shops creating an unethical artificial monopoly favoring large manufacturing companies.
The slotting fee unethical inclination also arises in instances where large companies pay retailers any amount of fee and use this strategy to prevent any competition from new entrants in the market. Retail stores also promote unethical dealing by instigating bribery-driven fees to generate supernormal profits from the willing manufacturers. This practice show greed by retailers, because the fee charged does not translate to the effort their attendants put to increase sales for the manufacturers (Mottner & Smith, 2015, P.182-186).
The slotting fees practice in the supply chain is also unethical because the charges introduced normally increase production costs, which ultimately lead to overvaluing of products in stores. Those who bear the ultimate burden introduced by retailers are the consumers because they pay high prices, not commensurate with the value they receive. The fee charged for promotional purposes on shelves are not only unethical but also illegal. This is because governments also lose tax on such engagements because traders do them at arm’s length, and payments completed in cash.
The introduction of slotting fee in groceries has also brought several ethical dealings in the supply chain. Some of the ethical practices are the availing of product varieties to consumers, to allow the consumers exercise the principle of preference and choice. The variety of products created in the market because f this practice also come with price differences, making consumers have the liberty of buying what is within their means ( Rowe et al.,2014, p.232-241).
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