Developing Merchandise Plans: Dr. Gopal Thapa Tribhuvan University

Developing Merchandise Plans
Dr. Gopal Thapa

Tribhuvan University
Merchandising
 Activities involved in acquiring particular goods
and/or services and making them available at the
places, times, and prices and in the quantity that
enable a retailer to reach its goals
Merchandising Philosophy
 Sets the guiding principles for all the merchandise decisions that
a retailer makes
 Should reflect
▪ Target market desires
▪ Retailer’s institutional type
▪ Market-place positioning
▪ Defined value chain
▪ Supplier capabilities
▪ Costs
▪ Competitors
▪ Product trends
Scope of Merchandising
Responsibility
 Full array of merchandising functions
 Buying and selling
 Selection, pricing, display, customer transactions
OR
 Focus on buying function only

Micro-merchandising
 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
Attributes and Functions of Buying
Organizations
Functions Performed
 Merchandising view
 All buying and selling functions
 Assortments
 Advertising pricing
 Point-of-sale displays
 Employee utilization
 Personal selling approaches

Functions Performed (cont.)
 Buying view
 Buyers manage buying functions
 Buying
 Advertising
 Pricing
 In-store personnel manage other tasks
 Assortments
 Point-of-sale displays
 Employee utilization
 Personal selling approaches
Merchandising Versus Store
Management Career Tracks
Devising Merchandise Plans
Forecasts
 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)

Types of Merchandise
 Staple merchandise
 Assortment merchandise
 Fashion merchandise
 Seasonal merchandise
 Fad merchandise
Staple Merchandise
 Regular products carried by a retailer
 Grocery store examples: milk, bread, canned soup
 Basic stock lists specify inventory level, color,
brand, style, category, size, package, etc.
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
Fashion and Seasonal Merchandise
 Fashion Merchandise: Products that may have
cyclical sales due to changing tastes and life-styles
 Seasonal Merchandise: Products that sell well over
nonconsecutive time periods
Factors in Planning Merchandise
Innovativeness
Innovativeness
Innovativeness
Structured Guidelines for
Pruning Products
 Select items for possible elimination on the basis of
declining sales, prices, and profits, appearance of
substitutes
 Gather and analyze detailed financial and other data about
these items
 Consider nondeletion strategies such as cutting costs,
revising promotion efforts, adjusting prices, and
cooperating with other retailers
 After making a deletion decision, do not overlook timing,
parts and servicing, inventory, and holdover demand
Quality
Quality
Quality
Retail Assortment Strategies
 Width of assortment refers to the number of
distinct goods/service categories (product lines) a
retailer carries
 Depth of assortment refers to the variety in any
one goods/service category (product line) a retailer
carries
 An assortment can range from wide and deep
(department store) to narrow and shallow (box
store
Brands
 Manufacturer (national)
 Private (dealer or store)
 Generic
Timing
 The retailer must decide:
▪ When they are first purchased, displayed and
sold
▪ Peak season, order and delivery time
▪ Routine vs special order, stock turnover, discount
and efficiency of inventory turnover
Allocation
 How much merchandise to place on the sale floor
 How much to place in a stockroom and whether to
use a warehouse
 A chain also apportions products among stores
Category Management
 Category management is a retailing and
purchasing concept in which the range of products
purchased by a business organization or sold by a
retailer is broken down into discrete groups of
similar or related products; these groups are
known as product categories
Category Management
 Merchandising techniques that some firms
including several supermarkets, drugstores,
hardware stores, and general merchandise
retailors, - use to improve productivity
 It is a way to manage retail business that focuses,
on the performance of product category results
rather than individual brands

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Developing Merchandise Plans

Dr. Gopal Thapa

 Focus on buying function only

 Personal selling approaches

 Store-by-store projections (if a chain)

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