Chapter 14 Developing Merchandise Plans RETAIL MANAGEMENT: A

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Chapter 14

• Developing Merchandise Plans

RETAIL MANAGEMENT A STRATEGIC APPROACH, 10th
Edition
BERMAN EVANS
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Chapter Objectives

• merchandising philosophy
• buying organization formats
• the processes they use

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Chapter Objectives

• merchandise plans
• Forecasts
• innovativeness,
• assortment,
• brands,
• timing,
• allocation

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Chapter Objectives

• category management
• merchandising software

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Merchandising

• Activities involved in acquiring
• goods and/or services making them available at
  the
• places, times, prices quantity
• that enable a retailer
• to reach its goals

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Merchandising Philosophy

• Sets the guiding principles
• for all merchandise decisions
• that a retailer makes

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Merchandising Philosophy

• Target market desires
• Retailers institutional type
• Market-place positioning
• Defined value chain

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Merchandising Philosophy

• Supplier capabilities
• Costs
• Competitors
• Product trends

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Scope of Merchandising Responsibility

• Many merchandising functions
• Buying and selling
• Selection, pricing, display, customer
  transactions
• OR
• Focus on buying function only

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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 services
• to encourage shoppers
• to buy more

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Attributes Functions of Buying Organizations
Figure 14-2 (next slide)
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Functions PerformedMerchandising 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 tasks
• Assortments POS displays
• Employees Personal selling

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Merchandising Vs. Store Management Career
Tracks
Figure 14-4 next slide
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Figure 14-5 Devising Merchandise Plans
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Forecasts

• projections of
• expected retail sales
• for given periods

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Forecasts

• Components
• Overall company projections
• Product category projections
• Item-by-item projections
• Store-by-store projections
• (if a chain)

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Examining types of Merchandise
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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
• milk, bread, canned soup
• Basic stock lists
• inventory level, color,
• brand, style, category,
• size, package, etc.

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Assortment Merchandise

• Apparel, furniture, auto, /or other categories
• for which the retailer must carry a variety of
  products
• in order to give customers a proper selection

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Assortment Merchandise

• Decisions on Assortments are projected
• Product lines,
• styles,
• designs, colors
• Model stock plan

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Fashion Merchandise

• Products that may have
• cyclical sales
• due to
• changing tastes and life-styles

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Seasonal Merchandise

• Products that sell well
• over nonconsecutive
• time periods
• Coats
• Swimsuits
• Christmas decorations

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Examining Merchandise Innovativeness
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Table 14-1a Merchandise Innovativeness
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Table 14-1b Merchandise-Innovativeness
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Table 14-1c Merchandise Innovativeness
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Figure 14-7 Traditional Product Life Cycle
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Pruning Products

• declining sales, prices, profits,
• appearance of substitutes
• Gather analyze
• detailed financial
• other data about these items

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Pruning Products

• Non-deletion strategies
• cutting costs,
• revising promotion efforts,
• adjusting prices,
• cooperating w/ other retailers

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Pruning Products

• do not overlook
• timing,
• parts servicing,
• inventory,
• holdover demand

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Table 14-2a Planning Merchandise Quality
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Table 14-2b Merchandise Quality
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Table 14-2c Merchandise Quality
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Retail Assortment Strategies
Width of assortment the number of distinct
goods/service categories (product lines) a
retailer carries
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Retail Assortment Strategies
Depth of assortment variety in any one
goods/service category (product line) a retailer
carries An assortment can range from wide deep
(department store) to narrow shallow (box
store)
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To BRAND or not to BRAND

• This is an important question

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Brands
Manufacturer (national)
Private (dealer or store)
Generic
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Table 14-3 Private Brand Test Match the
Retailer with the Brand Name
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Figure 14-3 Applying Category
Management(using BCG matrix)
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Merchandising Software
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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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Figure 14-4a Shelf Logic Software for Category
Management Planning
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Figure 14-4b Shelf Logic Software for Category
Management Planning
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The end
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Figure 14-1 Nikes Own Store Merchandising
Philosophy
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Figure 14-6 RD at Wendys
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Figure 14-11 Wal-Marts New Approach to Private
Brands
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Figure 14-12 Daffys Distinctive Branding
Strategy
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Figure 14-10 Sephoras Very Deep Assortment of
Cosmetics
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Figure 14-8 Predicting Fashion Adoption