14 Chapter 14 Developing Merchandise Plans RETAIL MANAGEMENT: A STRATEGIC APPROACH

Class Agenda Administrative Item  Course Schedule and Final Exam date Retail Institutions Assignments Introduce merchandising philosophies and concepts in preparation for Build-A-Bear Workshop and SunRipe cases scheduled for next week Administrative Item  Midterm results

Merchandising Activities involved in acquiring particular goods and/or services and making them available at the places, times, and prices and in the quantities that enable a retailer to reach its goals.

Does Gap’s strategic alliance with Diane von Furstenberg reflect all of these things? Sets the guiding principles for all the merchandise decisions that a retailer makes Should reflect:  Target market desires  Marketplace positioning  Retailer’s institutional type  Defined value chain  Supplier capabilities  Costs  Competitors  Product trends Merchandising Philosophy

Scope of Responsibility Merchandising view  All buying and selling functions Assortments Advertising Pricing Point-of-sale displays Employee utilization Personal selling approaches Merchandising view  All buying and selling functions Assortments Advertising Pricing Point-of-sale displays Employee utilization Personal selling approaches Buying view  Buyers manage buying functions Buying Advertising Pricing  In-store personnel manage other functions Assortments Point-of-sale displays Employee utilization Personal selling approaches Buying view  Buyers manage buying functions Buying Advertising Pricing  In-store personnel manage other functions Assortments Point-of-sale displays Employee utilization Personal selling approaches

Merchandising v. Store Management Career Tracks at Hbc

Two Merchandising Strategies Retailer adjusts shelf-space allocations to respond to customer and other differences among local markets Cross-merchandising Retailers carry complementary goods and services to encourage shoppers to buy more Micromerchandising Is cross-merchandising different from scrambled merchandising?

Figure 14.5 Considerations in Devising Merchandise Plans

What is Category Management? process consumer A Retailer/Supplier process of managing categories as strategic business units, producing enhanced business results by focusing on consumer value Category Management is a Process and involves a series of interrelated activities Category Management is comprised of distinctly different supplier and retailer components and cannot be done alone by either Category Management has been shown to lead to improved business results and improved relationships between trading partners

Retailer & Manufacturer Category Planning Implementation Category Management Practices Category Management Retailer Develops Store-Level Marketing Plans Manufacturer Develops Marketing Plans and Programs for Brands Implementation Traditional Business Practices

A New Way of Doing Business Brand/SKU Management Retailer Focused Tactics Deal-Based Decision Making Reactive Business Planning Adversarial Work Process Category/Brand/SKU Management Consumer Focused Tactics Data-Based Decision Making Proactive Business Planning Collaborative Work Process OLDNEW

Figure Applying Category Management

Figure 14.4b Shelf Logic: Software for Category Management Planning

Category Captains What is a Category Captain? an appointed lead supplier who carries out the category review and leads the process to deliver the plan for the total Category The Category Captain must: have a demonstrable knowledge of customer insight and market understanding take an objective approach to growing the overall category recognize the role of other suppliers in delivering the goal Non-captains?

Merchandise Quality The battle of the brands Article Private (dealer or store) Private (dealer or store) Manufacturer (national) Manufacturer (national) Generic

Private Brand Test Match the Retailer with the Brand Name RetailerBrand Canadian TirePresident’s Choice LoblawsWind River ZellersLife IrvingMastercraft SearsCompliments Shoppers Drug MartKenmore SobeysTruly Marks Work WearhouseRiverdale Why would a retailer (like LaSenza for example) opt to sell only private label products?