Question

Explain, or discuss: It is not a secret that companies pay to have privileged places in the supermarket’s aisles and in their ends. Also, retailers can place products with a higher margins in the prime eye-level on the shelves. (Monopolistic Competition)

Answer 1

It is true. To attract customers and to cause customer paying more time near the product and also to make them buy last minute, companies do follow practice to pay higher price to super marketers.

Also, a higher margin product can be placed at eye level so that no error of negligiance will be caused. Products which are differentiated on the basis of features, packaging are kept like this so that they can easily be identified. It is also arranged in an attractive manner so that a different experience can be given to customers.

However, this strategy may not work always, as customers now are aware what is to be bought and are also understanding this strategy. Customers are made aware through advertisements and other campaigns and hence information is better now.

All these efforts are taken to increase sales.