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12/13/2014

Developing Merchandise Plans

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Merchandising
Origin:
12501300; Middle English marchandise <
Old French. See merchant, -ice

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Merchandising
Activities involved in:
acquiring particular goods /services
make available at the:
* places,
* times,
* prices
* quantity
that enable a retailer to reach its goals.
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Simple Expression of Merchandising


If you take good care in the buying of the
product, it doesnt come back.
If you take good care of your customer, they
do come back

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Merchandising Philosophy
Sets the guiding principles for all the merchandise
decisions that a retailer makes
Should reflect
* Target market desires
* Retailers institutional type
* Market-place positioning
* Defined value chain
* Supplier capabilities
* Costs
* Competitors
* Product trends

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Scope of Responsibility
Full array of merchandising functions
* Buying and selling
* Selection, pricing, display, customer
transactions
Focus on buying function only

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Merchandising Philosophy

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Micromerchandising
Retailer adjusts shelf-space
allocations to respond to customer
and other differences among local
markets

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Cross-merchandising
Retailers carry complementary
goods and services to encourage
shoppers to buy more
Tea-Milk-Sugar-Cup-Disposable Cup
Coffee maker near Coffee

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Buying Organization
Formats & Process

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The Attributes & Functions of Buying Organizations

Men/Women/Kids

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Functions Performed
Merchandising view
* All buying and selling functions
Assortments
Advertising pricing
Point-of-sale displays
Employee utilization
Personal selling approaches

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Functions Performed
Buying view
* Buyers manage buying functions
Buying
Advertising
Pricing
* In-store personnel manage other functions
Assortments
Point-of-sale displays
Employee utilization
Personal selling approaches
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Devising Merchandising
Plan

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Considerations in Devising
Merchandise Plans

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Forecasts
Forecasts are projections of expected retail
sales for given periods
* Components:
Overall company projections
Product category projections
Item-by-item projections
Store-by-store projections (if a chain)

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Types of Merchandise
Staple merchandise
Assortment merchandise
Fashion merchandise
Seasonal merchandise
Fad merchandise

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Staple Merchandise
Regular products carried by a retailer
* Grocery store staple examples
Milk
Bread
Canned soup
Basic stock lists specify inventory level,
color, brand, style, category, size, package,
etc.
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Assortment Merchandise
Apparel, furniture, auto, and other products
for which the retailer must carry a variety of
products in order to give customers a
proper selection
Decisions on Assortment
* Product lines, styles, designs, and colors
are projected
* Model stock plan
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Fashion and Seasonal


Merchandise
Fashion Merchandise: Products that may
have cyclical sales due to changing tastes
and life-styles
Seasonal Merchandise: Products that sell
well over nonconsecutive time periods

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Innovation: R&D at Store

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Structured Guidelines for


Pruning Products
Select items for possible elimination on the
basis of declining sales, prices, and profits,
appearance of substitutes
Gather and analyze detailed financial and other
data about these items
Consider nondeletion strategies such as
cutting costs, revising promotion efforts,
adjusting prices, and cooperating with other
retailers
After making a deletion decision, do not
overlook timing, parts and servicing, inventory,
and holdover demand
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Retail
Assortment
Strategies

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Bata: A Very Deep Assortment of


footwear

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Brands

Manufacturer
(national)

Private
(dealer or store brand)

Generic

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Costcos Approach to Private


Brands

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Nikes Sneaker Brand for Wal-Mart


1.

Nike Sneaker price tag $100

2.

Starter Sneaker price tag $10

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Category Management
is a retailing concept in which the range of products sold
by a retailer is broken down into discrete groups of similar
or related products;
these groups are known as product categories (examples
of grocery categories might be: tinned fish, washing
detergent, toothpastes).
it is a systematic, disciplined approach to managing a
product category as a strategic business unit.
each category is run as a "mini business" (business unit)
in its own right, with its own set of turnover and/or
profitability targets and strategies.
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Applying
Category
Management

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Merchandising Software
General Merchandise Planning Software
Forecasting Software
Innovativeness Software
Assortment Software
Allocation Software
Category Management Software
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Shelf Logic: Software for Category


Management Planning

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Shelf Logic: Software for Category


Management Planning

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Planograms /schematics (POG), are visual representations of a store's products


A planogram defines
which product is placed,
in which area of a shelving unit
with which quantity

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