The power of supermarket chains is illustrated in their ability to extract "Guarantee of Margins" from manufacturers. This refers to a situation where _______.
A)a guaranteed percentage of sales is used as a promotional allowance
B)a fixed percentage of a product's price is returned to manufacturers in the form of an advertising rebate
C)a clause is inserted in the manufacturer's contract that states that a fixed amount of the manufacturer's product will be stocked for a specified time period
D)a clause is inserted in the contract that ensures a certain profit margin for the retailer irrespective of the retail price being charged to the customer

Question

Quizplus · Accepted Answer

A "Guarantee of Margins" refers to a clause in a contract that ensures a certain profit margin for the retailer irrespective of the retail price being charged to the customer. This gives supermarket chains the power to dictate pricing for the manufacturer and can often result in the manufacturer being forced to reduce their margins in order to maintain their presence in the retailer's stores.

The Power of Supermarket Chains Is Illustrated in Their Ability