RETAIL MARKETING

UNIT 3

MERCHANDISE PLANNING

MERCHANDISE PLANNING

RETAIL MARKETING

UNIT 3 MERCHANDISE PLANNING

Concept

Buying of merchandise & selling it to end consumer

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UNIT 3 MERCHANDISE PLANNING

Merchandising can be termed as planning, buying & selling of merchandise . Challenging function- Goods well bought are half sold.

Merchandising challenge deals with

Right product Right Quantity At right place At right time And at right price

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UNIT 3 MERCHANDISE PLANNING

Achieving this 5 RIGHTS is key for success

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UNIT 3 MERCHANDISE PLANNING

Merchandise Mgt can be termed as Analyse customer Planning of merchandise to be sold Acquisition of merchandise

Handling involves merchandise in its own place

Control on the amt spent on buying merchandise

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UNIT 3 MERCHANDISE PLANNING

Factors affecting merchandising function

Size of organisation

Organisa tion structure

merchandising function

Merchandise to be carried

Types of stores

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UNIT 3 MERCHANDISE PLANNING

Merchandiser : - responsible for particular lines of merchandise

Eg- in Deptal store, there may be a merchandiser for

menswear womenswear childrenswear

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UNIT 3 MERCHANDISE PLANNING

Role & Responsibilities 1) Planningfor merchandise needs , not involved in buying Estimating consumer demand & impact of changes in retail envt, Sales forecast - budgets

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UNIT 3 MERCHANDISE PLANNING

2) DirectingGuiding & training buyers performance

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UNIT 3 MERCHANDISE PLANNING

3) Coordinating

Supervise the work of more than one buyer

Coordinate activities with all buyers

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UNIT 3 MERCHANDISE PLANNING

4) controllingNot only merchandise performance But also buyers performance

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UNIT 3 MERCHANDISE PLANNING

The buyer : Role & Responsibilities Select & order merchandise to be sold May be responsible for buying for a dept, an entire store,or a chain of stores Buyer should maintain a balanced inventory

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UNIT 3 MERCHANDISE PLANNING

Responsibilities of buyers are

Developing a merchandising strategy Planning & selecting merchandise assortment Vendor selection, development & management

Pricing the merchandise

Inventory mgt various store formats

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UNIT 3 MERCHANDISE PLANNING

RETAIL MARKETING

UNIT 3 MERCHANDISEPLANNING

FUNCTION OF BUYING FOR DIFFERENT TYPES OF ORGANISATIONS

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UNIT 3 MERCHANDISE PLANNING

Buying for a single / independent storeOne person owner & manager Thorough understanding of buying process Typically role of buyer is created

Co ordinating purchasing for various products

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UNIT 3 MERCHANDISE PLANNING

Writing orders
Handling special orders Making decisions on merchandise returns Remerchandising the store

Taking decisions with respect to pricing of product

Planning & coordinating various promotional activities

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UNIT 3 MERCHANDISE PLANNING

Buying for a chain store or a chain of department store Operation is larger than independent store Merchandising in chain store is characterized into-

central buying plans

central merchandising plans

Operates in more than one region

Diverse consumer market

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UNIT 3 MERCHANDISE PLANNING

Sales needs to be as close to accurate as possible

Overbuying or underbuying

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UNIT 3 MERCHANDISE PLANNING

Buying for non store retailerBuying merchandise will vary from that of store retailer Clear understanding of product consumers buy on net Uniqueness of product & competitive price

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UNIT 3 MERCHANDISE PLANNING

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UNIT 3 MERCHANDISE PLANNING

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UNIT 3

MERCHANDISE PLANNING

PROCESS OF MERCHANDISE PLANNING

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UNIT 3 MERCHANDISE PLANNING

Introduction -

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UNIT 3 MERCHANDISE PLANNING

Merchandise planning is defined as planning & control of merchandise inventory of the retail firm in a manner which balances between the expectations of the target customer & the strategy of the firm

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UNIT 3 MERCHANDISE PLANNING

Process of merchandise mgt STORE Format strategy B U S I N E S S

S T R A T E G Y

Merchandise Strategy

Merchandise Planning: Range Assortment Product price

Sourcing: Make or buy Allocation Performance Vendor identify of merchandise monitoring & Negotiations to stores evaluation Placing the order

Store operations & planning

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UNIT 3 MERCHANDISE PLANNING

PROCESS OF MERCHANDISE PLANNING Stage 1 - Developing the sales forecast Stage 2 Determining the merchandise requirement Stage 3 Merchandise control- to open to buy Stage 4 Assortment Planning

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UNIT 3 MERCHANDISE PLANNING

Stage 1 - Developing the sales forecast Predicting future sales Helps in determining inventory needs How much of each product needs to be purchased ? Should new product be added to merchandise assortment ? What price should be charged for the product ?

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UNIT 3 MERCHANDISE PLANNING

Process of developing sales forecast Review past sales Analyzing the changes in economic conditions Sales potential demographic changes

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UNIT 3 MERCHANDISE PLANNING

Stage 2 Determining the merchandise requirement Planning in merchandise is at two levels creation of merchandise budget assortment plan Two methods of developing merchandise plan

Top down planning

Bottom up planning

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UNIT 3 MERCHANDISE PLANNING

Top down planning top mgt works on sales plan & this plan is passed on to merchandising team

Bottom up planning individual dept managers work on estimated sales projections & then added up to arrive at total sales fig.

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UNIT 3 MERCHANDISE PLANNING

Merchandise budget usually comprise of five parts 1 sales plan , how much of each product needs to be sold dept wise Div wise stock wise 2- stock support plan , how much stock is needed to achieve sales

3 planned reductions which may need in case product does not sell

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UNIT 3 MERCHANDISE PLANNING

4- planned purchase levels i.e quantity of each product needs to be procured

5 gross margin = sales cost of goods sold

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UNIT 3 MERCHANDISE PLANNING

LEVEL OF IDENTIFICATION IS STORE ITSELF

Classification Within a supermarket Fresh groceries Ready to eat snacks

Additives/ pickles
Personal hygiene products Cooking aids like ready pastes Necessities like Dal, sugar, salt,oil Soft drinks

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UNIT 3 MERCHANDISE PLANNING

Merchandise Hierarchy

company

Dept

Merchandise classification

Merchandise Mercha category ndise sub category

Style price point

SKU

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UNIT 3 MERCHANDISE PLANNING

various categories in of product in every Dept. Eg ready to eat Dept biscuits, chips ,wafers, branded snacks like Haldirams Sub Category level Within chips & wafers salted wafers, branded wafers, flavored wafers Style /pack/pricePack- 100 gm Price fixed by retailer

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UNIT 3 MERCHANDISE PLANNING

Stage 3 Merchandise control- the open to buy

It is a tool in the hands of a fully committed small retailer In retail Open To Buy is a buzzword

Good inventory control is critical to ensuring an adequate level of stock is on hand for the amount of sales being generated Having too much inventory ,wrong inventory can slow cash flow & reduce profits with too many

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UNIT 3 MERCHANDISE PLANNING

IF retailer under buys & miss sales opportunities then retailer is not making the potential profit
A retailer can be sure to stock the right amount of right product at the right time by using OPEN TO BUY It can be calculated in units or in dollars OTB is essentially a difference between how much inventory is needed & how much is actually available This includes Inventory on hand In transit & Any outstanding orders

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UNIT 3 MERCHANDISE PLANNING

Planned reductions ; it includes

a) Planned markdowns reduction in prices due to bad quality, competitive product, change in trend b) Employee discountsDiscounts given to employees for buying companies products c) Shrinkage Loss of merchandise due to theft or pilferage

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UNIT 3 MERCHANDISE PLANNING

Stage 4 Assortment Planning Assortment Planning is both extremely important and challenging for retailers.

Assortment means combination of all products made available in a store. And a set of products offered within a product category Products share similar product categories
Assortment planning involves determining quantities of each product that should be purchased

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UNIT 3 MERCHANDISE PLANNING

RETAIL MARKETING

UNIT 3 MERCHANDISE PLANNING