DECA Marketing Cluster Practice Exam

What is a slotting allowance?

1. A fee to arrange shelf space for a product

2. A payment for advertising services

3. A tax on retail sales

4. A discount for bulk purchases

The correct answer is: A fee to arrange shelf space for a product

A slotting allowance is specifically a fee paid by a manufacturer to a retailer to secure shelf space for their products in a retail store. Retailers often have limited shelf space and must decide which products to feature prominently. By offering this fee, manufacturers can increase the likelihood of their products being placed in a visible and accessible location, which can significantly impact product sales and consumer awareness. The other choices represent different concepts within retail and marketing. While advertising payments refer to costs associated with promoting products rather than securing shelf space, a tax on retail sales pertains to government-mandated levies on products sold to consumers. Discounts for bulk purchases involve incentives for buying larger quantities of a product but are not about the strategic placement of products in stores. Therefore, the definition of a slotting allowance distinctly aligns with the concept of arranging shelf space for products.