merchendise planning

8/3/2019 Merchendise Planning

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Merchandise planning

Pgdm iv-7


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Merchandise or product

Merchandise is anything that can be offered to amarket or to customers that might satisfy a needor a want

Characteristics of merchandise

Shoppers exhibitGenerate profitManufacturer produceCustomers requirement.


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Determining the right assortmentof merchandise

Type

Quantity

Price Quality

Time

Place


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Steps in determining the rightassortment

Assessing the target market

Collecting information on assortmentplanning through internal & externalsources

Analyze the data

Determine the breadth & depth ofmerchandise offerings, stock balances,price zone,size,color & style of assortment


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Internal sources of information

Past sales records

Direct communication

Want slips Comparison-shopping


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External sources of information

Vendors

Trade publications

Trading activities


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merchandise assortment planning-concepts

Breadth & depth of merchandise

Breadth or variety of merchandise refers tothe number of different merchandisecategories a retailer offer.

depth refers to number of different items inmerchandise categories. It refers to thevariety of colors, size, style, sizes & pricethat a retailer offers in a given line


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Planning tools for merchandisemanagement

Planning sales forecast

Past sales

Product life cycle Category to which product belongs

Information from other sources


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Planning to introduce a newproduct

Appropriateness & compatibility withexisting lines & ranges

Growth potential

Profitability

Profit generation


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Dropping to products

Criteria for product elimination

Declining sales

Little or no contribution in sales of otherproducts

Availability off good selling items that can

be substituted for the product Failure of changes in merchandising

efforts to improve the situation appreciably


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Buying & handling merchandise

There are five major areas of concern

Who buys

What to buy How much to buy

From whom to buy

When to buy


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The buyer

The buyer may be responsible for thepurchase of a comparatively small rangeof merchandise or for several complete

departments, depending on the size &type of the retail organization.


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Acc. To diamond & pintel (1985) there areten main personal attributes for aneffective retail buyer

Qualification

Enthusiasm

Analytical excellence Product knowledge


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Dedication

Objective reasoning

Leadership Appearance

flexibility


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Sources of merchandise

Manufacturer or primary producers

Wholesalers

Importers Agents

Private brands


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Supplier selection

Prices including extra trade discount forbulk purchase

Terms- length of credit, size of cashdiscount, other conditions & benefits.

Deliveries- fast & prompt delivery, mode ofdelivery, safety of goods transported.


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Negotiation with vendors

Past relation with vendors

Additional mark up opportunities

Transportation Delivery & exclusivity

Communication

Testing new items Other points to consider


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Buying of staple goods

Purchase depends on

estimated sales for the next period of time

Quantity of goods presently in hand & under

processing

Desired stock at the end of the period

Quantity to buy can be calculated from the

following formula:Quantity to buy=[estimated sales + desires stock

at the end of month]-[goods in hand & on order]


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Buying of fashion merchandise

Formula is

Amount of purchase for peak seasonselling= estimated sales (during peakseason)+ desired stock (at the end of peakseason)- goods in hand & on order

merchendise planning

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