merchandise planning.ppt
TRANSCRIPT
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Concept –
Buying of merchandise & selling it to end consumer
RETAIL MARKETING 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
REATAIL MARKETING 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
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Factors affecting merchandising function –
merchandising function Merchandise to be carried
Types of stores
Organisation structure
Size of organisation
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Merchandiser : - responsible for particular lines of merchandise
Eg- in Deptal store, there may be a merchandiser for
menswear
womenswear
childrenswear
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Role & Responsibilities
1)Planning- for merchandise needs , not involved in buying
Estimating consumer demand & impact of changes in retail envt,
Sales forecast - budgets
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
3) Coordinating –
Supervise the work of more than one buyer
Coordinate activities with all buyers
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
4) controlling-
Not only merchandise performance But also buyer’s performance
RETAIL MARKETING 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
RETAIL MARKETING 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
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Buying for a single / independent store-
One person – owner & manager
Thorough understanding of buying process
Typically role of buyer is created
Co ordinating purchasing for various products
RETAIL MARKETING 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
RETAIL MARKETING 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
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Sales needs to be as close to accurate as possible
Overbuying or underbuying
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Buying for non store retailer-
Buying merchandise will vary from that of store retailer
Clear understanding of product consumers buy on net
Uniqueness of product & competitive price
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Merchandise planning is defined as Merchandise planning is defined as planning & control of merchandise planning & control of merchandise inventory of the retail firm in a manner inventory of the retail firm in a manner which balances between the expectations which balances between the expectations of the target customer & the strategy of of the target customer & the strategy of the firmthe firm
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Sourcing:
BUSINESS
STRATEGY
STORE Format strategy
MerchandisePlanning:RangeAssortmentProductprice
Merchandise
Strategy
Make or buyVendor identifyNegotiationsPlacing the order
Allocation of merchandise to stores
Performance monitoring & evaluation
Store operations & planning
Process of merchandise mgt
RETAIL MARKETING 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
RETAIL MARKETING 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 ?
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Process of developing sales forecast –
Review past sales
Analyzing the changes in economic conditions
Sales potential demographic changes
REATAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Stage 2 – Determining the merchandise requirement
Planning in merchandise is at two levelscreation of merchandise budget assortment plan
Two methods of developing merchandise plan
Top down planning
Bottom up planning
REATAIL MARKETING 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.
REATAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Merchandise budget usually comprise of five parts
1 –sales plan , how much of each product needs to be sold
dept –wiseDiv wisestock 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
REATAIL MARKETING 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
REATAIL MARKETING 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
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Merchandise Hierarchy
company Dept Merchandise classification
Merchandise category
Merchandise subcategory
Style price point
SKU
REATAIL MARKETING UNIT 3 MERCHANDISE PLANNING
various categories in of product in every Dept.
Eg –ready to eat Dept –biscuits, chips ,wafers, branded snacks like Haldiram’s
Sub Category level –Within chips & wafers – salted wafers, branded wafers, flavored wafers
Style /pack/price- Pack- 100 gmPrice – fixed by retailer
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Stage 3 –Merchandise control- the open to buyStage 3 –Merchandise control- the open to buy
It is a tool in the hands of a fully committed small It is a tool in the hands of a fully committed small retailerretailer
In retail Open To Buy is a buzzwordIn retail Open To Buy is a buzzword
Good inventory control is critical to ensuring an Good inventory control is critical to ensuring an adequate level of stock is on hand for the amount of adequate level of stock is on hand for the amount of sales being generatedsales being generated
Having too much inventory ,wrong inventory can Having too much inventory ,wrong inventory can slow cash flow & reduce profits with too many slow cash flow & reduce profits with too many
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
IF retailer under buys & miss sales opportunities then IF retailer under buys & miss sales opportunities then retailer is not making the potential profitretailer is not making the potential profit
A retailer can be sure to stock the right amount of right A retailer can be sure to stock the right amount of right product at the right time by using OPEN TO BUYproduct at the right time by using OPEN TO BUY
It can be calculated in units or in dollarsIt can be calculated in units or in dollars
OTB is essentially a difference between how much inventory OTB is essentially a difference between how much inventory is needed & how much is actually availableis needed & how much is actually available
This includes –This includes – Inventory on handInventory on hand In transit &In transit & Any outstanding ordersAny outstanding orders
RETAIL MARKETING UNIT 3 MERCHANDISE PLANNING
Planned reductions ; it includesPlanned reductions ; it includes
a)a) Planned markdowns –reduction in prices due to bad Planned markdowns –reduction in prices due to bad quality, competitive product, change in trendquality, competitive product, change in trend
b)b)Employee discounts-Employee discounts-
Discounts given to employees for buying companies Discounts given to employees for buying companies productsproducts
c) Shrinkage – c) Shrinkage –
Loss of merchandise due to theft or pilferage Loss of merchandise due to theft or pilferage
RETAIL MARKETING 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