1. Merchandising and Store Functions Performed
1.1. o Merchandising view
1.1.1. All buying and selling functions • Assortments • Advertising pricing • Point-of-sale displays • Employee utilization • Personal selling approaches
1.2. o Buying view
1.2.1. Buyers manage buying functions: • Buying • Advertising • Pricing • In-store personnel manage other tasks: • Assortments • Point-of-sale displays • Employee utilization
2. Figure 14-5: Devising Merchandise Plans
3. Retail Assortment Strategies
3.1. Width of assortment refers to the number of distinct goods/service categories (product lines) a retailer carries. Depth of assortment refers to the variety in any one goods/service category (product line) a retailer carries. An assortment can range from wide and deep (department store) to narrow and shallow (convenience store).
4. Advantages of Private Labels versus National brands
4.1. Store loyalty– A 1 percent increase in private label purchasing increases a retailer’s market share of a household’s purchases by 0.3 percent. A 10 percent increase in private label purchases, increases that retailer’s market share of that household by 3 percentage points. • Differentiation strategy- Opportunity to differentiate store on the basis of recipe, styling, value, features. • Increased channel power over suppliers— Depends on strength of private label versus national brand • Higher profit margins on private labels- 25 to 30 percent higher (but no return privileges, co-op promotions, slotting fees, and warehousing support).
5. Successful Private Label Strategies
5.1. Be a purchasing agent for consumers, not a selling agent for suppliers • Develop distinctive products (Trader Joe’s wild salmon in a can, chocolate-covered sunflower seeds, pretzels with sesame seeds (instead of salt) • Co-brand with famous designer (Target with Michael graves, Mossimo and Liz Lange) or with national brand (Costco and Starbucks, Jelly-Belly, StonyField) • Taste and product perfromance testing (Costco, Trader Joe’s, Aldi) • Tell a story about the product (ingredients, source, recipe, and health).
6. Category Management
6.1. Category management is a merchandising technique used to improve productivity. • It is a way to manage a retail business that focuses on the performance of product category results rather than individual brands. • It arranges product groupings into strategic business units to better meet consumer needs and to achieve sales and profit goals. • Retail managers make merchandising decisions that maximize the total return on the assets assigned to them.
7. Merchandising
7.1. Activities involved in acquiring particular goods/ services and making them available at the places, times, prices, and quantities that enable a retailer to reach its goals.
8. Merchandising Philosophy
8.1. Sets the guiding principles for all the merchandise decisions that a retailer makes
8.2. t should reflect • Target market desires • Retailer’s institutional type • Market-place positioning • Defined value chain • Supplier capabilities • Costs • Competitors • Product trends
9. Scope of Merchandising Responsibility
9.1. Full array of merchandising functions • Buying and selling • Selection, pricing, display, customer transactions OR • Focus on buying function only
10. Micromerchandising
10.1. Retailers adjust shelf-space allocations to respond to customer differences and other differences among local markets
11. Cross-Merchandising
11.1. Retailers carry complementary goods and services to encourage shoppers to buy more.
12. Forecasts
12.1. These 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)
13. Types of Merchandise
13.1. Staple merchandise
13.1.1. Regular products carried by a retailer • Grocery store examples: milk, bread, canned soup • Basic stock lists specify inventory level, color, brand, style, category, size, package, etc.
13.2. Assortment merchandise
13.2.1. Apparel, furniture, automotive, and other categories 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
13.3. Fashion merchandise
13.3.1. Products that may have cyclical sales due to changing tastes and life-styles
13.4. Seasonal merchandise
13.4.1. Products that sell well over nonconsecutive time periods