1. Merchandising Plan

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

3. Merchandising Philosophy
Sets the guiding principles for all the merchandise decisions that a retailer makes
Decisions Should reflect
Target market desires
Retailer’s institutional type
Market-place positioning
Defined value chain
Supplier capabilities
Costs
Competitors
Product trends

4. Thus merchandising philosophy includes every product decision from
what produce lines –
carry to the shelf space allotted to them
inventory turnover –
pricing

5. Costco’s Individualistic Merchandising Philosophy
They have selection of 4000 items which when you go to Target or Wal-Mart you’ll get 1,00,000
They say they may select only two toaster or two peanut butter to sell
But they would be of best values we can find at the time
Those items selectively chosen would be 3000 items

6. Rest 1000 are such that constantly changes
One week shoppers see Levis relaxed jeans and the next time they come will not find those items instead will find Tommy Hilfiger
It creates an attitude that if you see it you better buy it.

7. Merchandise Personnel's Scope of responsibilities must be stated
Full array of merchandising functions
Buying and selling goods
Service: Like Selection, pricing, display, customer transactions OR
Focus on buying function only leaving rest works for others
Normally retailers go for full array

8. Functions Performed Merchandising view
All buying and selling functions
Assortments
Advertising pricing
Point-of-sale displays
Employee utilization
Personal selling approaches

9. Functions Performed (cont.)
Buying view
Buyers manage buying functions
Buying
Advertising
Pricing
In-store personnel manage other tasks
Assortment
Point-of-sale displays
Employee utilization
Personal selling approaches

10. Nike’s Own Store Merchandising Philosophy

11. Harry & David’s Merchandising Philosophy Keeps everything from fruits to nuts Concentrates more on Packing 100 % Guarantee If not satisfied replacement or money back which ever you prefer.

12. Retailer adjusts shelf-space allocations to respond to customer and
Micromerchandising (to capitalize on opportunities)
Retailer adjusts shelf-space allocations to respond to
customer and
other requirements of local markets

13. Conti… Wal-Mart, Carrefour do follow micromerchandising
As this approach puts the correct products in correct stores for our customers
So that we carry products that appeal customers or else we’ll carry “Dead inventory”

14. (Selling electronic items along with right fitting furniture's)
Cross-Merchandising (to capitalize on opportunities)
Retailers carry complementary goods and services to encourage shoppers to buy more.
(Selling electronic items along with right fitting furniture's)

15. Attributes and Functions of Buying Organizations Or Decisions that the retailer needs to take before merchandise planning
One product
purchase

16. Degree of Centralization
Many chains combine the formats by organizing a centralized buying along with giving store manager chance to put inputs
Like Zara’s

17. In a bright & vast white room, 200 designers and product mangers are deciding on what to create
They regularly gather suggestions from more than 500 stores managers worldwide
Not for just specific orders but --- ideas related to cuts, fabrics, or even for a new line for apparels
After weighing the managers ideas, the team decides finally what to make.

18. Designers draw up the latest ideas on the computers and then pass them through Zara’s intranet to nearby factories
Within days cutting, dyeing, stitching and pressing begins.
In just three weeks the clothes will hang up in the stores
Zara isn’t just a bit faster than its rival Gap.
But is infact 12 times faster in this entire process

19. Merchandise Plans

20. Forecasts Components:
These are projections of expected retail sales for given periods
Components:
Overall company projections
Product category projections
Item-by-item projections
Store-by-store projections (if a chain)

21. Types of Merchandise Staple merchandise Assortment merchandise
Fashion merchandise
Seasonal merchandise
Fad merchandise

22. Staple Merchandise Regular products carried by a retailer
Grocery store examples: milk, bread, canned soup
Basic stock lists
Specific inventory level, color, brand, style, category, size, package, etc.

23. Assortment Merchandise
Apparel, furniture, auto, and other categories
For which the retailer must carry a variety of products in order to give customers a proper selection
Decisions on Assortment
Product lines, styles, designs, and colors are projected
Model stock plan: used to project specific items such as number of green, red, blue

24. Fashion and Seasonal Merchandise
Fashion Merchandise: Products that may have changing sales due to changing tastes and life-styles (forecasting is difficult)
Seasonal Merchandise: Products that sell well over nonconsecutive time periods (forecasting is straight forward)

25. Fad Merchandise High sales are generated for a short time
Often toys and games are fads
Like Harry Porters toy fly off each time when related movie or news is released
For such products Never-out list (keeping huge quantity to meet anticipated demand and later stock smaller quantity to be a best seller)

26. Innovativeness
An innovative retailer has great opportunity-----Distinctiveness by being first in the market
And also a great risk possibly misreading customers and stuck up in large inventories.
But success of innovative merchandise depends upon certain factors like

27. Target market:
Evaluate whether the target market is conservative or innovative
Retailer image:
Carry goods/services that reinforce the firm’s image (in past could satisfy)

28. Competition:
Lead or follow competition in the selection of new goods/services
Customer segments:
Segment customers by dividing merchandise into
established-product displays and
new- product displays
And thereby find out the Number of customer acceptance for new ones

29. R&D at Wendy’s Wendy’s R&D Department is dedicated to continually improve products by refining cooking, serving procedures and ingredients

30. Need to even go for a fashion check
Check if fashion is
Vertical trend
Horizontal trend

32. Retail Assortment Strategies
Width of assortment refers to the number of distinct goods/service categories a retailer carries
Depth of assortment refers to the variety in any one goods/service category a retailer carries
An assortment can range from wide and deep (department store) to narrow and shallow (box store)

33. Sephora’s (USA) Very Deep Assortment of Cosmetics
Offers 365 shades of lipsticks
150 shades of nail polish
150 shades of cosmetic pencils

34. Do’s for planning their assortment
If variety is increased will overall sales go up
Will overall profits increase
How much space is required for each product category
How much space is available
Will carrying 10 varieties yield greater sales or profits than stocking 4 varieties
Investment cost that occurs with large varieties should also be taken care of.
As selling space is limited, it should be allotted to those goods generating the most customer traffic and sales.

35. Scrambled Merchandising:
Thus can even go for selection of some modern ways of distinction strategies for Assortment
Scrambled Merchandising:
Retailer adds unrelated items
To generate more revenue and lift up profits
Like Florists keeping umbrella
Complementary Merchandising:
Retailers sell basic product and related offerings through cross-merchandising
Like Stereos and CDs
Substitute Merchandising:
Keeping all competing brand options so a s to shift sales from one brand to other
And causing no difference to retailers overall sales

36. Brands Manufacturer (national) Private Generic (dealer or store)
(Local Products
Having secondary shelf allocation
Least promotion
Low priced
Only 1 % sales contribution)

37. Wal-Mart’s New Approach to Private Brands

38. Daffy’s Distinctive Branding Strategy

39. But you don’t have to hunt for a good deal
This is an off-price chain that caters to brand conscious shoppers who look for deals.
Daffy’s provide new meaning to the word bargain
For its online shoppers it has put up as follows
It says for everyone else we offer wide range of accessories, clothes etc
But you don’t have to hunt for a good deal
We already pay people to do that for you
i.e. our buyers load racks every week with new merchandise from all over the world.
You’ll get finest designer collections at savings up to 80 % off the regular retail price

40. Category Management
Is a merchandising technique used to improve productivity
It is even a way to manage a retail business that focus on the performance of product Category results than an individual brand
CM is a process of managing all SKU’s
It involves simultaneous management of
Price
Shelf-space
Merchandising Strategy
Promotional efforts
And all other elements of retail mix.

41. PRIL’s Category Management.

42. Applying Category Management

43. Shelf Logic Software for Category Management Planning

44. Shelf Logic Software for Category Management Planning