assortment planning part b (1)

8/2/2019 Assortment Planning Part B (1)

http://slidepdf.com/reader/full/assortment-planning-part-b-1 1/18



•Quality of merchandise offered for sale.

•Price Range

•Choice of National Brands or Private Brands

•Good Taste

•Proper Timing

•

Product Life Cycle•Variety of Product Lines, and

•Assortment Strategies



•Product Line : is a broad category of products

having similar characteristics and similar uses.

•Breadth : the number of product lines carried or the

number of brands carried within a product

classification.

•Depth : the number of choices offered to customers

within each brand or product classification.



=

=

=

+

+

+



•Faster Turnover•Ease of Stocking•Using less room & display area•Ease of re-ordering, checking &

receiving•Simplified counting, and•Avoidance of Markdowns

•Presentation of a wide variety ofgoods•A high degree of stopping &pulling power•A slant to those customers ofdiscriminating taste

Customers are not offered a

wide selection of products

Frequent re-ordering is

required which makes it a

costly method of inventory



•In order to satisfy customers and remain ahead of

competition, new products must be continuously added

while others must be deleted.

•Stock Breadth can be increased by adding other product

lines or additional items in an existing product line but

new products may divert sales from present assortments.

•Cannibalization occurs when potential sales of existing

products are lost to new items.



A merchandise classification system is needed to provide the means

for better planning and control of inventory.

Classification & Sub-Classification:

Classification: refers to the particular kinds of goods in a store or

department. E.g. Men’s Shoe Department

Each of these broad product categories could be further divided intoSub-Classification. E.g. Men’s Dress Shoes, Casual Shoes etc.

The type/size of the store/dept. , the image , the target market and

financial resources available will affect the number of classifications

and sub-classifications needed.



Merchandise Classifications

Examples of Merchandise Classifications:

Men’s Shoes Women’s Shoes

Dress Shoes Dress ShoesOxfords High Heels

Slip-Ons Medium Heels

Low Heels

Casual Shoes Evening ShoesOxfords High Heels

Slip-Ons Medium HeelsLow Heels

Athletic Shoes Casual ShoesRunning Shoes Medium HeelsCourt Shoes Low HeelsCleated Shoes Wedge Heels



Merchandise Classifications

Selection Factors:

Each sub-classification of merchandise can also be broken down by

various selection factors, which are product characteristics most

important for the customers as they make their purchasing decisions.

Key selection factors include:

•Brand

•Price

•Size

•Colour

•Material



•The unit assortment plans are not randomly selected collection of

merchandise.

•Assortments of merchandise are balanced to customer needs while being

bound by the financial constraints of the merchandise buying plan.

•It results in establishing a Model Stock, the desired assortment of stock

broken down according to factors important to the target market .

•While developing model stocks, cues should be taken from Current

Trends as well as Previous Sales .

•The Objective of establishing a Model Stock is to maximize the Sales

and Profits from the Inventory Investment.



Preparing an Assortment Plan

•A Model Stock does not have to be followed rigidly during selling

season.

•It should serve only as a guide because demand in regard to variousselection factors will vary during the season.

•Adjustments have to be made once the selling season is underway.

•Re-orders also change the nature of Model Stock.

•Fashion Buyers cannot be as specific as other buyers when developing

model stocks.




STEP 1

• Decide on Classifications & Sub-classifications.

• By doing this, the breadth of the product assortment is determined.

STEP 2

• Determine the brands and price lines that will be carried for each sub-classification.

• Knowing the characteristics of the target market is crucial here.

STEP 3

• Identify the general characteristics of an item that customers may consider while purchasing it.• It is not possible to plan for all the characteristics but it should allow the buyer to make purchases according

to the most important of these characteristics in relation to the majority of customers.

STEP 4

• Decide on the proportion of one classification to another and the proportion in which each factor will berepresented in the stock.

• For some selection factors like Size, past sales data can be used for calculation. For others like Colors, thebuyer must know how readily the customers accept new fashion colors as they are introduced.

STEP 5

• Calculate the specific number of units to be purchased.




- An Example

•Department - Wristbands.

•Past Sales show Maxi has been the most popular brand with

customers.

•Buying plan indicates – Rs 3000/- for buying the category.

•

The Buyer decides he only wants to keep Maxi.

•Each Maxi wristband costs Rs 10/-

•The total number of pieces that can be purchased is 300.



•The wristbands are available in sizes from XS to XL in

20 colors.

•Also available in 100% cotton or a polyester/cotton blend.

•Embroidered and Non-embroidered options are also available.



Preparing an Assortment Plan- An Example

According to past sales records:

1. The size distribution is as under-

S = 15%

M = 20%

L = 45%XL = 20%

2. The higher selling colors are:

White = 20%

Gray = 35%

Black = 15%

The buyer decides to supplement these 3 colors with 2 new colors that are

predicted to be very fashionable for the Fall season.

Each of these will represent 15% of the assortment plan.



SIZE

Total number of Units to

be bought S M L XL Total

300 15% 20% 45% 20% 100%

45 60 135 60 300

COLORS

White 20% 9 12 27 12 60

Gray 35% 16 21 47 21 105

Black 15% 7 9 20 9 45

Green 15% 7 9 20 9 45

Garnet 15% 7 9 20 9 45

TOTAL 100% 45 60 135 60 300



A well-balanced Assortment is the Cornerstone

of Retail Success

assortment planning part b (1)

Documents