Download - Merchandise Planning by Akshay Chauhan
Merchandise Planning
Dr. S. K. Singh
Merchandise Planning
“Goods well bought are half sold”
Merchandise Mgmt decisions
Should reflect:
– Target market desires– Retailer type– Market-place positioning– Supplier capabilities– Costs– Competitors– Product trends
Process of Merchandise planning
Developing the sales forecast
Determining the Merchandising requirements (Assortment planning)
Deciding on the Merchandise control i.e. Merchandise level
Deciding on the Merchandise allocation within a store or/and among various stores in the retail-chain.
ForecastsComponents:
• Overall company projections• Product category projections• Item-by-item projections• Store-by-store projections (if a chain)
Types of Merchandise
• Staple merchandise• Assortment merchandise• Fashion merchandise• Seasonal merchandise• Fad merchandise
Factors to Bear in Mind When Planning Merchandise Innovativeness
FACTOR RELEVANCE for PLANNING
Target market(s) Evaluate whether the target market is conservative or innovative
Goods/ service growth potential
Consider each new offering on the basis of rapidity of initial sales, maximum sales potential per time period, and length of sales life
Fashion trends Understand vertical and horizontal fashion trends, if appropriate
Retailer image Carry goods/ services that reinforce the firm’s image
-Contd. Factors to Bear in Mind When Planning Merchandise Innovativeness
FACTOR RELEVANCE for PLANNING
Competition Lead or follow competition in the selection of new goods/services
Customer segments Segment customers by dividing merchandise into established-product displays and new-product displays
Responsiveness to consumers
Carry new offerings when requested by the target market
Amount of investment
Consider all possible investment for each new good/service: product costs, new fixtures, and additional personnel
-Contd. Factors to Bear in Mind When Planning Merchandise Innovativeness
FACTOR RELEVANCE for PLANNING
Profitability Assess each new offering for potential profits
Risk Be aware of the possible tarnishing of the retailer’s image, investment costs, and opportunity costs
Constrained decision making
Restrict franchisees and chain branches from buying certain items
Declining goods/ services
Delete older goods/services if sales and/or profits are too low
Factors to Consider When Planning Merchandise Quality
FACTOR RELEVANCE for PLANNING
Target market(s) Match merchandise quality to the wishes of the desired target market(s)
Competition Sell similar quality or different quality
Retailer’s image Relate merchandise quality directly to the perception that customers have of retailer
Store location Consider the impact of location on the retailer’s image and the number of competitors, which, in turn, relate to quality
-Contd. Factors to Consider When Planning Merchandise Quality
FACTOR RELEVANCE for PLANNING
Profitability Recognize that high quality goods generally bring greater profit per unit than lesser-quality goods; turnover may cause total profits to be greater for the latter
Manufacturer versus private brands
Understand that, for many, manufacturer brands connote higher quality than private brands
Customer services offered
Know that high-quality goods require personal selling, alterations, delivery, and so on
Personnel Employ skilled, knowledgeable personnel for high-quality merchandise
-Contd. Factors to Consider When Planning Merchandise Quality
FACTOR RELEVANCE for PLANNING
Perceived goods/ service benefits
Analyze consumers. Lesser quality goods attract customers who desire functional product benefits; High-quality goods attract customers who desire extended product benefits
Constrained decision making
Face reality. Franchises or chain store managers have limited or no control over products; Independent retailers that buy from a few large wholesalers are limited to the range of quality offered by those wholesalers
Brands
Private(dealer or store)
Manufacturer(national)
Generic