Salesperson Slotting Allowance Authority in Manufacturer-Retailer Negotiations

Abstract

Over the past 30 years, slotting allowances have played an important, albeit contentious, role in manufacturer-retailer relationships. As the debate over this practice continues, little attention is being paid to the role of salespeople in slotting allowance negotiations. The current study addresses this shortcoming in the literature by investigating the delegation of slotting allowance authority to salespeople in the context of manufacturer-retailer negotiations. A structural model is tested using data collected from retail managers. The analysis indicates that delegating slotting allowance authority to salespeople positively impacts the salesperson's influence over customer decisions and enhances selling performance. The results also suggest that a salesperson's trustworthiness increases his or her influence and performance with the customer. Overall, the findings suggest that manufacturers are likely to benefit from delegating slotting allowance authority to the sales force and training salespeople to convey this authority during retail negotiations. The study concludes with a discussion of implications for theory and practice.

Keywords:

• channel negotiations
• delegating salesperson authority
• salesperson influence
• salesperson performance
• salesperson trustworthiness
• slotting allowances
• United States

Notes

*Multiple types of allowances and fees paid to retailers may be considered “slotting allowances” (see Bloom et al., 2000). Two of them (display fees and payments for shelf space) were the specific type of slotting allowances present in our study. Therefore, the instructions provided to survey respondents stated, “It is a common practice for vendors to pay for display space or shelf space in a store. For example, Pepsi, Coke, or Frito-Lay may pay an allowance for a display or to get a new product on the shelf. This section of the survey asks questions dealing with the amount of control you believe a sales rep may have over these types of allowances. The questions on this survey use (firm) as an example so consider only your (firm) sales rep when responding to the items.”

**Correlation is significant at the p ≤ .01 level (2-tailed).

*Correlation is significant at the p ≤ .05 level (2-tailed).