+

Aims of the lesson

Understand

how a retailers merchandise decisions are related to its retail marketing and financial objectives the criteria for selection and explain how merchandise suppliers are selected

Describe

Recognise

how retailers use merchandise lists to plan assortments merchandise mix planning

The

Merchandise
A

definition: the mix of products a store offers for sale the ESSENCE of retailing

Its

Central

to the stores success is the merchandise selection that matches the tastes, preferences and expectations of its target customers on the customer!

Remember: focus

Merchandise
Affects

all aspects of retail operations

1. Affects

the amount of funds the firm will have to invest to maintain merchandise inventory the amount of space, labour and equipment it will require for stock and display sales and profits generated by a store depend on the merchandise

2. Affects

3. The

..and

Merchandise
The

merchandise selection determines the types of customers the store is able to attract

Of

all the factors that influence a customers decision to shop at a particular store, none is individually more important than the selection of merchandise offered terms of: PRICE/QUALITY/SELECTIVITY

In

Merchandise selection
The

objective of merchandising strategy is to select the right mix of products or services to sell at the store develop the merchandise selection, the retailer must meet four merchandise objectives consistent with the firms retail marketing strategy and its financial objectives)

To

(being

Four merchandise objectives

Optimal Proper

level of variety, assortment and depth

balance of manufacturer, house and generic brands selection of assortment within merchandise lines

Proper

Best

mix of new and established items

Merchandise selection

Product selection
Retailer

normally prepare their merchandise plan based on the past experience and current marketing information regarding the items customers want and what p products suppliers pp will be available preferences change and new product appear on the market at various times, stimulating g merchandise p purchase in respond p to demand not an exact science

However, However customer

It Its s

Breadth of selection
The

store must decide how wide a selection will be

Breadth of selection
Virgin

Megastore vs Independent music store in terms of competition and image

Advantages Costs Stock

turnover: which assortment is sold quicker?

Breadth of selection
Offering

additional titles involves disadvantages and costs that must be balanced against the attractiveness of carrying a large selection new item added requires some additional display and storage space balance between basic products and additional items items normally sell more slowly than the basic ones

Each

The

Marginal

Breadth of selection
A WIDE

SELECTION = A SLOWER STOCK TURNOVER

Breadth of selection
A WIDE

SELECTION = A SLOWER STOCK TURNOVER

Balanced assortment
Why

introducing new, strange items? IMPROVE the stores image

They Give

you a leadership in introducing the best products bring customers into the store

They

Supplier selection
Once

we have planned our assortment, we have to choose our supplier in merchandising depends on the buyers ability to identify: sources of supply

Success

Potential Evaluate

alternative suppliers purchase agreements

Negotiate

Supplier selection factors

FACTOR

1 of supplier

Reputation

RELEVANCE Department

stores and mass merchandisers consider a suppliers reputation to be the most important criterion in supplier selection

Supplier selection factors

FACTOR Brand

names

RELEVANCE The

suitability of a supply source depends on whether its merchandise is appropriate for the stores target customers

Supplier selection factors

FACTOR Brand

images

RELEVANCE The

image of the brand must be consistent with the stores merchandise strategy

Supplier selection factors

FACTOR Price

and payment terms

RELEVANCE Wholesale

prices can vary, even for similar products. Price list, quantity discount schedules and payment terms of different suppliers must be carefully compared

Supplier selection factors

FACTOR

5 reliability

Supplier

RELEVANCE Buyers

attach crucial importance to a suppliers service standards. Suppliers must deliver at the right time and in the agreed quantity

Supplier selection factors

FACTOR Support

6 provision

RELEVANCE Retailers

prefer suppliers that provide promotional assistance, such as cooperative advertising, point of purchase displays and product demonstrations

The management of the merchandise mix

Once

Ive selected the assortment and found the right supplier, supplier I have to buy a desirable merchandise mix a desirable merchandise mix is obviously related to the survival and profitability objectives of the store

Providing

Merchandise mix policies 1. 1

Deep and narrow assortment = Merchandise mix policies li i must t reflect fl t specialty store philosophy A specialty philosophy. store must have numerous brands and styles of the specialty area it represents

Merchandise mix policies 2. 2

Deep and wide assortment = Merchandise mix policies li i suggest t th the general store merchandising philosophy which features good selections of diverse product lines (and usually ll a private i t label)

Focus: the private label

A retailers own brand Sold exclusively th through h that th t retail t il organisations outlets Low price, but not only New categories

Merchandise mix policies 3. 3

Shallow and narrow assortments = Merchandise mix policies li i follow f ll the th concept of the convenience stores, stores which sell only frequently needed lines with little selection or depth in any given i li line

Merchandise mix policies 4. 4

Shallow and wide assortments = Merchandise mix policies li i reflect fl t th the five and dime type of store philosophy. philosophy Discount stores typically carry a few brands and styles of a wide variety of generic i product d t classes

Merchandise mix policies 5. 5

Consistent and compatible assortments = Merchandise mix policies imply that within the store as a whole, h l quality, lit class l and selection of merchandise are consistent. There are no extremely good and no extremely bad products

A partial list of external variables

FACTOR: INCREASING

COMPETITION
Merchandise M h di

mix i adjustment: place more emphasis on product differentiation leading to specialisation p

A partial list of external variables

FACTOR:

WORSENING ECONOMIC CONDITIONS

Merchandise

mix

adjustment: streamline the merchandise mix and change merchandise composition in terms of having more economical eco o c and lower o e products

A partial list of external variables

FACTOR:

CHANGING IMPORT RESTRICTIONS

Merchandise

mix adjustment: Reassess the imported and importable components of the overall merchandise mix

A partial list of external variables

FACTOR: MAJOR

POPULATION MOVEMENTS IN OR OUT THE TRADING AREA

Merchandise

mix adjustment: Provide more attractive quality and variety. Differentiate to make the store more attractive. c e Consider o e relocation

Aims of the lesson

Understand

which are the different elements that influence a customers choice store name, entrance, windows

Analyse The

power of colours

The NAME

A name should: a)Allow you to identify and recognise a store b)Attract c) ) Communicate What do you sell Which is the q quality y and the price i positioning iti i Which is the target

THE NAME
Creating

a business name is easily one of the most enjoyable, yet utterly important, aspects of starting a retail business make it easy to understand, spell and pronounce use negative sounding words

Do

Don't

THE NAME
Do

consider where your business will fall in an alphabetical list such as the yellow pages limit your product line by choosing a name that won't represent all you do use a strictly generic term, such as 'discount office supply' which cannot be protected as trademarks

Don't

Don Don't t

WINDOWS
Attract Its Its

Seduce - Amaze

the first time you get in touch with the customer your BUSINESS CARD

Must

be visible if you are walking, passing by with the car, quickly or slowly Must transmit with coherence the store positioning

WINDOWS
They

have to suggest whats happening inside but not too much insidebut store window has a life of its own: can reinforce or weaken the brand positioning the perfect scene to experiment and test new ideas: its like a theatre scene a store window you can use any mean of communication: digital, classic, smell, sounds

It Its s

On

WINDOWS
It

is a frame where products become icons and symbols with many cultural meanings to the eyes of the observer is also an antidepressant stimulus, it can be distracting, amusing, develop imagination and desires of the customer can highlight the convenience of a purchase

It

It

On

a store window you can use any mean of communication: digital, classic, smell, sounds

+OPEN WINDOW

The

exhibited objects mix with the interior of f the h store and d they h are not perceived i di in a tangible way entire store becomes a window

The The

treatment of the interior exhibition will have to be perfect, well organized, with focal point under evidence

40

+PARTIALLY CLOSED WINDOW

The

main advantage is that it highlights more the h exhibited hibi d products d i in f front of f the h backdrop light is able to involve the observer

The Its

not suitable for important settings, because the open part is going to distract

41

+ COMPLETELY CLOSED WINDOW

Its It

the best solution

manages to involve the passers-by distraction

Concentrate, no Communicate

emotions through lights

42

THE ENTRANCE
With the entrance, , you y define your y level of openness to the customer

Exclusivity, luxury

Attraction and friendliness

Understanding the store environment ATMOSPHERE

=
SIGHT

VISUALMERCHANDISING:
Name,entrance,windows Building B ildi &Architecture A hi Storedesign Display Instorecommunication

SOUND SMELL TOUCH TASTE

AESTHETIC MARKETING Phisicalelements th taffect that ff tth the consumers perception

+
RETAILTAINMENT
ENTERTAINMENT TIMEISMONEY PLAY FOOD&RELAX

44

Its It s nothing new new

Byzantium, inaugurated

in 330 AD by Costantine

the Great
By

order of Costantine, every street in the city had to have a shop: bazaar structures where indoor merchants carry out their business

Closed

Its It s nothing new new

Since

ancient times, all populations gathered in organized or improvised markets to let know their products and their creativity craft merchants showed the product in a creative and tidy way, so they could attract the greatest number of buyers years, THE MARKET has been the centers of business, trade of products and knowledge

The

For

Its It s nothing new new

In

the Eastern countries, where trade is in the DNA of the people, people the sales staff is available to show as many products as possible to the customer insistently, with the hope of persuading him to buy

Sometimes

Color and meanings

Colors

have accompanied and influenced man since antiquity in all its manifestations

Religion Art Science Medicine Magic

Colors
They y

are divided into

PRIMARY: red, blue, yellow

They are the basis for the composition of all the others
SECONDARY: orange, green, purple

Obtained by mixing two primary colors in equal parts

TERTIARY: blue-violet, blue-green, yellow-green,

yellow-orange, red-violet, red-orange Obtained by mixing two primary colors in different quantities

Colors

Colors
COMPLEMENTARY Each

COLORS

primary color has its complementary: the secondary color produced by mixing the other two primary colors. purple, purple its complementary of yellow

Red+blue=

Yellow

+ blue=green, green its complementary of + red= orange, orange its complementary

red
Yellow

of blue

RED
It

represents: speed, erotic, political struggle, religion li i symbolizes: y strenght, g heat, danger, g aggression, gg love and passion

It

Positive: passion, passion energy, energy love, love strenght strenght, action Negative: blood, war, danger, aggression To

use: in corridors, areas of activity

Not

to use: offices, bedrooms, factories where there is a lot of stress the room smaller, increases heart beats, keeps awake

Effects: makes

YELLOW
It It

represents: t sunlight, li ht heat, h t intelligence i t lli

symbolizes: y wisdom, action, wealth, sacredness, disease

Positive: sun, sun summer, summer optimism Negative: sickness, jealousy To

use: public places, business studies, kitchens to use: bedrooms people p p nervous

Not

Effects: makes

BLUE
It It

represents: p tradition, , lasting g values symbolizes: serenity, kindness, eternity

Positive: stability, peace, harmony, sea, sky Negative: depression, depression conservatism

and

melancholy
To

use: hospital, bedrooms, bathrooms to use: meeting g areas and dining g rooms has a quiet and relaxing effect, sleepy

Not

Effects: it

GREEN
It

represents: p firmly, y, stable values which do not change symbolizes: space, space pride, pride patience, patience hope

It

Positive: nature, fertility, perseverance, relaxation Negative: envy, disease, anger To

use: operating rooms to use: business places p flattens the room, it promotes indecision

Not

Effects: it

ORANGE
It It

represents: p health and joy j y symbolizes: glory, splendor and progress and wellness

Positive: openness, balance Negative: vanity, vanity selfishness To

use: in corridors, dining rooms to use: bedrooms, in areas with a lot of stress pleasure, joy and appetite

Not

Effects: promotes

BROWN
It It

represents: p strenght, g , nature, , earth symbolizes: lack of roots

Positive: practicality, warmth, security Negative: dirt

PINK
It It

represents: p romanticism, , love, , beauty y symbolizes: femininity, youth and creativity

Positive: quiet

Negative: weakness weakness, naivety

BLACK
It It

represents: p power, p , distinction symbolizes: occultism, mourning and

Positive: power, formality, depth, style

elegance
Negative: malice, fear, death To

use: stages, fitting museums and shop windows to use: in other places p emotional reaction and symbol of

Not

Effects: increase

infinity

WHITE
It It

represents: p beginning,light, g g, g , simplicity p y symbolizes: virginity, innocence and peace

Positive: snow, innocence, purity Negative: cold, cold sterile sterile, hospital To

use: everywhere, using colored furniture to compensate the whiteness to use: hospital p strict

Not

Effects: too