INTRODUCTION TO RETAIL BUYING

Definition “that function responsible for obtaining by purchase, lease or other legal means, equipment, materials, supplies and services required by an undertaking for use in production.”

The purchasing environment Industrial buyers Institutional buyers Intermediate buyers

Procurement and competitive advantage Many business units produce products identical to competitors Through cost leadership or differentiation Delivery of service Unique added benefit

Ensuring environment is monitored Currency implications of overseas trading Comparative power positions of buyers, suppliers and competitors Technological developments in the supply market

Activities in the values chain Inbound logistics; receiving,storing, materials handling, inventory control, returns to suppliers Operations; packaging, labelling Outbound logistics;distributing the finished goods

Marketing and sales;inducing and facilitating buyers to purchase the product Service; maintaining or enhancing value of product after sale

Strategic importance of purchasing Change in environment from stable to dynamic Intensified competition The contribution of procurement to retail management

Status of purchasing within the organisation Influences the esteem in which the function is held at lower organisation levels Affects the status of groups and individuals within that function

Where purchasing has a high status Strong support from top management in order to negotiate effectively Equality of standing between purchasing and other departments Considerable freedom for purchasing staff Professionalism, expertise and morale high

Where purchasing has a low status Buyers may seek to gain status and authority by book procedures Purchasing will not be consulted regarding the preparation of specifications, sources of supply Buyers will tend to do what they are told by other departments Professionalism, expertise and morale low

Purchasing objectives “ to obtain materials of the right quality in the right quantity from the right source delivered to the right place at the right time at the right price.”

Major functions To contribute to the formulation, communication and implementation of policies, strategies and plans Improvement of purchasing and supply systems Establish and improve sources of supply Provide goods and materials to internal and external customers through storage, movement, distribution and transport.

The buyers Role Merchandise selection Merchandise pricing Product development Travel Advertising, promotion, visual merchandising and publicity Communicating with other merchandise departments