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Ethical dilemma:
Although engulfed by mass customization and the destruction of large new products and variations, grocery store chains continue to seek to maximize the profits from their distribution. Their distributions include a tradable asset (shelf space) and they charge for it. This charge is known as the insertion fee. It has recently been estimated that food manufacturers spend about 13% of their sales on trade promotions, which is paid to stores to promote and discount the manufacturer's products.
A portion of these fees is per insertion, but the insertion fees are built into the manufacturer's cost. It also implies a disadvantage for small companies with new products, these companies with limited resources because they can be expelled from the market place. Insertion fees can also mean customers can never find a special local brand again.
Questions:
1. How ethical do you think insertion fees can be? Justify
2. What other strategy could be used in this type of case? explain
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