Scenario 15-2
The Sounds Good recording company is getting ready to release the first compact disc from its newest band, Planet Moon.Sounds Good's last three releases have been dismal failures, and the struggling company needs a quick influx of cash.The owners decide to use sales promotions to move the Planet Moon disc through record stores and into customers' hands.
-(Scenario 15-2) Sounds Good knows that the release cannot succeed without gaining distribution in large record store chains.However, many of these chains are refusing to carry the product, saying that shelf space is too precious to be used for an unknown band like Planet Moon.However, buyers for these chains say that they might be willing to carry the product if Sounds Good makes a direct cash payment to the chain, known in the trade channel as a(n)

Question

Quizplus · Accepted Answer

The direct cash payment that the record store chains are asking for is known as a slotting fee. This is a fee paid by manufacturers to retailers in exchange for shelf space for their products. It is a common practice in the retail industry, particularly in the case of new or relatively unknown products. The other options (cooperative advertising fee, merchandise allowance, and in-store allowance) do not fit the scenario described in the question.

Scenario 15-2 The Sounds Good Recording Company Is Getting Ready to Release