Jiffy Cake Mix Company developed a new brownie mix that is much improved over its current brownie mix. When a sales representative for Jiffy contacted a buyer for a major supermarket chain, the buyer demanded that Jiffy give the supermarket chain a combination of cash and free cases of goods whose total value exceeded the entire marketing budget Jiffy planned to spend on the new brownie mix during its first year on the market. When the sales representative from Jiffy protested, the buyer said, "It is company policy to get ______________ in order to secure shelf space for new brands."
A) push money
B) advertising allowances
C) quantity discounts
D) stocking allowances
E) sale prices

Question

Quizplus · Accepted Answer

The buyer is asking for something called "stocking allowances," which is an amount of money or free products given to a retailer in exchange for them allocating shelf space for a new product. This is a common practice in the industry, and is often necessary for a new brand to get a foothold in the market. Push money is a payment made to salespeople to encourage them to sell a particular product, advertising allowances are funds given to retailers to help them advertise a particular product, quantity discounts are price reductions offered to customers who buy large quantities of a product, and sale prices are temporary price reductions offered to customers.

Jiffy Cake Mix Company Developed a New Brownie Mix That