Question

Ashley has decided to open a restaurant. She wants to purchase her poultry from O’Brien’s Food Service Ltd. They have quoted her $25.00 per case. The salesperson Adam stopped by her the restaurant and told her that with every order she makes she must also order two cases of frozen meatballs at a cost of $20.00 per case. Meatballs are going to be on Ashley’s menu. She does not want to buy the meatballs. Adam tells her that it is both or nothing. Ashley tells Adam that she needs to think about and that she will get back to him in a day or two. Is there anything wrong with O’Brien’s practice? DISCUSS. (5 marks).

Answer 1

There is nothing wrong with O Brien's practice of selling meatballs with poultry as he is selling a combined product offering. This practice is also used by many retailers or big stores where two related products are bundled together for consumers. Many companies di that due to their size and reach and after establishing a brand image. Since people know the brand and want it at the cost of competition, companies often push through unrelated products to increase revenue and profits. This is perfectly alright since the company is using it brand image and reach to improve its market share and revenue. The decision to buy still lies with the Ashley. O Brien's is only using its bargaining power for a better deal which needs to be negotiated for better terms and agreements.