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Ethical Dilemma In Chain Store Management 2

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Duke University
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Running Head: ETHICAL DILEMMA CONCERNING SLOTTING FEES ETHICAL DILEMMA CONCERNING SLOTTING FEES Name Institution Affiliation 1 ETHICAL DILEMMA CONCERNING SLOTTING FEES The current grocery retail industry requires that manufacturers seeking shelf space pay significantly high slotting fees for their products to be displayed by the latter. A survey of the current picture of the grocery store chains reveals a significant increase in the number of products finding a way into the market. Grocery stores have taken advantage of this scenario by charging slotting fees to both the old manufacturers and the new entrants. To ensure maximum returns and efficiency of their business, the grocery store managers accept marketable commodities only, which is discouraging to new startups seeking to penetrate the market. According to Israilevich, (2004) charging promotional costs to market manufacturers' products as well as accepting relatively marketable products acts as a detriment to the growth of many startups. Additionally, it may have an impact in limiting the number of products available for consumers to choose. Apart from these adverse effects on the user's choice, the aspects in most grocery stores lower the profitability of the manufacturers (up to 13 per cent of sales in this industry go to promotion). In as much as grocery store managers can base their high slotting fees on a selection criterion from various manufacturers' products, the effects of slotting fees have ethical issues ...
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