 Copyright 1999 Prentice Hall 8-1 Lesson 6.4 – Merchandising

Merchandising When the demand for licensed products is minimal, an organization may choose to handle their merchandising in-house In-house Merchandising: Refers to managing the merchandising process within the organization itself, rather than outsourcing or acquiring licenses The key benefit of in-house merchandising is the probability of increased profits LESSON 6.4 Branding & Licensing

Steps in the in-house merchandising process Merchandising 1) Design the logo and slogan or tagline (if it is not already available) 2) Determine merchandise type, quality and quantity 3) Interview local merchants (vendors) and select the company that can best fit the organization’s needs 4) Determine distribution outlets 5) Train sales staff 6) Prepare on-site merchandising strategies LESSON 6.4 Branding & Licensing

If an organization feels an in-house merchandising approach may not be the most efficient strategy, they may choose to outsource the effort to a third party Merchandising LESSON 6.4 Branding & Licensing Outsourcing the merchandising effort

Merchandising LESSON 6.4 Branding & Licensing For example, last year the Big 10 Conference signed an exclusive five-year deal with sports retail vendor MainGate to sell merchandise for its football championship and the men’s and women’s basketball tournaments

Merchandising The primary purpose is to maximize income for a sports or entertainment event Organizations maximize income through the sales of food and beverage and merchandise On-site Merchandising: Refers to the process of selling merchandise at the physical location of the event LESSON 6.4 Branding & Licensing

Four key considerations of on-site merchandising Merchandising 1)The location of where the merchandise is being sold 2)The physical layout and appeal of where the merchandise is being sold 3)How well the sales operation is performed 4)The appeal of the merchandise or product itself LESSON 6.4 Branding & Licensing

Best practices for selling on-site merchandise Merchandising  The heaviest traffic for merchandising is upon arrival and departure  Test marketing is important to ensure the effectiveness of a good or service  Training of sales personnel varies with the event LESSON 6.4 Branding & Licensing

Merchandising Making merchandise available online opens up a new sales channel for a sports or entertainment organization to purchase related goods and services Online Merchandising: Refers to the process of selling merchandise on the Internet LESSON 6.4 Branding & Licensing

Online Merchandising Merchandising  Organizations maximize income by providing a customized shopping environment and allowing consumers access to a wider variety of products and services  Global e-commerce sales surpassed $1 trillion in 2013 LESSON 6.4 Branding & Licensing

Online Merchandising Merchandising LESSON 6.4 Branding & Licensing Overall, eMarketer estimates, US retail e- commerce sales will reach nearly $39 billion in 2013, up 56.5% over 2012 and almost triple the amount spent in 2011.

Online Distribution Methods Merchandising LESSON 6.4 Branding & Licensing  Direct shipping to consumer  In-store pickup

Online Advantages Merchandising  Easier to control inventory  Opportunity to offer exclusive merchandise  Opportunities to reach out-of-market consumers LESSON 6.4 Branding & Licensing

Reaching out-of-market customers Merchandising LESSON 6.4 Branding & Licensing Kansas State University’s online store sold $131,500 of Wildcats merchandise and of that revenue, Kansas residents were responsible for just $56,100 of the purchases

Online Disadvantages Merchandising  Security concerns in making transactions online  Potentially higher distribution (delivery) costs  Consumers inability to touch, feel or “test-drive” products before buying can be a deterrent and lead to higher return rates LESSON 6.4 Branding & Licensing