Term
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Definition
| occurs when a group of competing retailers (or other channel members operating at a given level of distribution) establishes a fixed price at which to sell certain brands of products; when retailers attempt to reach agreements with one another regarding the use of double (or triple) coupons, rebates, or any other means of reducing price competition in the marketplace. |
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Term
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Definition
| occurs when a retailer collaborates with the manufacturer or wholesaler to resell an item at an agreed-upon price. This is often referred to as resale price maintenance, or fair trade. Until recently, such actions were considered as violation of Section 1 of the Sherman Antitrust Act |
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Term
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Definition
occurs when two retailers buy an identical amount of “like grade and quality” merchandise from the same supplier but pay different prices. However, not all forms of price discrimination are illegal. In order for price discrimination to be considered illegal, it must fit the following conditions:
a. The transaction must occur in interstate commerce.
b. The potential for a substantial lessening of competition must exist.
In addition, the act provides that any buyer who knowingly receives the benefit of discrimination is just as culpable as the supplier granting the discrimination. |
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Term
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Definition
| advertising involves promoting a product at an unrealistically low price to serve as "bait" and then trying to "switch" the customer to a higher-priced product. |
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Term
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Definition
| occurs when a misleading price is used to lure customers into the stores; usually there are hidden charges or the item advertised may be unavailable. The Wheeler-Lea Amendment of the Federal Trade Commission Act made illegal all “unfair or deceptive acts in commerce”. |
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Term
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Definition
| occurs when a manufacturer sells to independent retailers and also through its own retail outlets. Although retailers tend to become upset about this, the courts have not viewed these arrangements as violations. In fact, the courts reason that it can actually foster competition. |
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Term
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Definition
| a written policy that states what is ethical and unethical behavior. |
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Term
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Definition
| which is an unwritten but well understood set of rules or standards of moral responsibility |
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Term
| implied warranty of fitness |
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Definition
| implies that the merchandise is fit for a particular purpose and arises when the customer relies on the retailer to assist or make the selection of goods to serve a particular purpose. |
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Term
| implied warranty of merchantability |
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Definition
| made by every retailer; when the retailer sells goods and implies that the merchandise sold is fit for the ordinary purpose for which such goods are typically used |
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Term
| Sherman Antitrust Act (1890) |
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Definition
| Bans (1) "monopolies or attempts to monopolize" & (2) "contracts, combinations, or conspiracies in restraint of trade" in interstate & foreign commerce |
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Term
| Robinson-Patman Act (1936) |
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Definition
| Amends the Clayton Act, adds the phrase “to injure, destroy, or prevent competition”. Defines price discrimination as unlawful (subject to certain defenses) and provides the FTC with the right to establish limits on quantity discounts, to forbid brokerage allowances except to independent brokers, and to ban promotional allowances or the furnishing of services or facilities except when made available to all “on proportionately equal terms.” |
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Term
| one-way exclusive dealing |
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Definition
| occurs when the supplier agrees to give the retailer the exclusive right to merchandise the supplier's product in a particular trade area. However, the retailer does not agree to do anything in return for the supplier |
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Term
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Definition
| occurs when a retailer represents that merchandise is made by a firm other than the true manufacturer |
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Term
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Definition
| exists when a retail chain charges different prices in different geographical areas in order to eliminate competition in selected geographic areas. Such behavior is prohibited by the Robinson-Patman Act |
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Term
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Definition
| the result of the interaction between the retailer and the customer (either written or verbalized) and can cover all attributes of the merchandise or only one attribute. |
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Term
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Definition
| invoke the "foreseeability" doctrine, which states that a seller of a product must attempt to foresee how a product may be misused and warn the consumer against the hazards of misuse. The courts have interpreted this doctrine to suggest that retailers must be carful in how they sell their products |
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Term
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Definition
| fees paid by a vendor for space, or a slot, on a retailer's shelves, as well as for having a slot in the retailer's computer system for its UPC number |
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Term
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Definition
| attempts by a supplier, usually a manufacturer, to limit the geographical area in which a retailer may resell its merchandise. the courts view these restrictions as potential violations of the Sherman Antitrust Act. The law does not, however, prevent manufacturers & retailers from establishing territorial responsibilities as long as they don;t exclude all other retailers & restrict the sale of the manufacturer's products |
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Term
| two-way exclusive dealing |
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Definition
| occurs when the supplier offers the retailer the exclusive distribution of a merchandise line or product if in return the retailer will agree to do something for the manufacturer, such as heavily promote the supplier's products or not handle competing brands; violates the Clayton Act if they substantially lessen competition or tend to create a monopoly |
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Term
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Definition
| exist when a seller with a strong product or service requires a buyer (the retailer) to purchase a weak product or service as a condition for buying the strong product or service; have been found to be in violation of the Clayton, Sherman, and FTC acts |
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Term
| Federal Trade Commission Act (1914) |
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Definition
| established the FTC, a body of specialists with broad powers to investigate & to issue cease-and desist orders to enforce Section 5, which declares that "unlawful." |
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Term
| Consumer procuct safety act (1972) |
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Definition
| created by the Consumer Product Safety Commision |
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