PRODUCT AND

MERCHANDIS
E
MANAGEMEN
T
Role of product management in retailing

• Products can tangible like visible goods or intangible like beauty parlors
gyms ,banks etc’
• Identification of products to be retailed is the core point of the retail business
• Varied cost implications, demand patterns and competitive factors play a major role
for different product categories • Critical for successful customer satisfaction
• Changes in product profile to provide innovative offerings (ethnic wear added to a
casual wear outlet)
Product management vs merchandise
management

• Product management deals with issues and set of decisions related to the selection
and removal of products from the retailers’ portfolio

• Merchandise management relates to the selection of the right quantity of the

product and ensures its availability at the right place and time ( Pantaloon offers
fashion and leather accessories, cosmetics, perfumes, jewellery for women and
formals, smart casuals, denims, men's accessories for men)
Product selection process

Review of product performance related Product range review assists retailers to

on : make decisions on :
• type of products • deletion of a product
• life cycle of the products, • increase in variety and range
• trends in the product category • identification of new suppliers
• its strategic fit with the retailer’s business • additions to product features
• review and revision of promotional campaigns
• Effective product management is also known as
brand management
Brand management
Key issues in retail branding:
• brand management of the retail outlet
• deciding whether to opt for the strategy of self own
branding
• Mutli-pronged strategy
• a strong retail brand and private label strategy is an
effective tool to differentiate stores and the shopping
experience The world’s 10 strongest brands
Elements of
a store brand
Own branding
• retailer sells products under the retail organization’s house brand name
2 types of own branding:
• integrated own branding: retailer also manufactures the branded retail products
(Raymond, Sony)

• independent contracting: retailer procures the products from other suppliers although
sold under the label of the retail house
Own branding contd…
Four significant factors of own branding/private labels:
• private label sales have showed an increase in terms of both value and volume across
countries
• labels enhance store profitability by increasing pressure on branded manufacturers
• labels can be used to increase margins or offer products at lower prices
• better control over price, delivery, and quality, ensures a strong brand identity for a
retailer
• effective private label programme to include all elements of the value proposition—
price, quality, and product differentiation
Merchandise
management
Merchandise management: process by
which a retailer attempts to offer the
right quantity of the right product at
the right place and time while meeting
the retail firm’s financial goals

Merchandise management is a sum of :

Planning, procurement, handling &
control of merchandise investment of a
retail operation
Dimensions of Merchandise mix
Merchandise unit plan

• Target market analysis

• Need to incorporate demographic, shopping behaviour and psychographic data (DLF City Centre
Shopping Mall in Gurgaon has evolved its merchandise mix around female ethnic and formal wear in
garments, footwear, etc.,
• Influential consumer characteristics
• Competition Analysis :
• evaluation of the competitive retail stores in the trade area
• used to arrive at a market
• positioning that identifies the retail store position and defines its target customers
• determined by competitive factors (number, types, and positioning of the anchor store and non-anchor
stores, size and nature of the market area of retailer)
Influential
competitive
factors
Model stock plan
• Identify the attributes considered by the customer in purchasing the product
• Focuses on features or attributes and availability in terms of sizes and brands
(Pantaloon focuses on men’s and women’s wear, varied sizes and brands)
• Identify number of levels under each attribute
• List levels available in respective product category on offer to target segment
in view of preferences and similar offerings of competitors
• Allocate total rupees or units to respective product categories
• An acid test for a retailer planning for the optimal merchandise mix (includes
ordering cost, transportation, and stocking cost)
Constraining
factors
Types of suppliers
Manufacturers & primary producers
Wholesalers
Agents
Other retailers
Government & semi- government sources
Category management
Category management: process of managing a retail business with the objective of
maximizing the sales and profits of a category rather than the performance of individual
brands or models

Advantages: - increased sales • - reduced inventory management • - improved route and

warehouse management •
Merchandise management planning
Specialty retailers
Grocery and food retailing:
- fixed cycle replenishment
- continuous replenishment
- Merchandise Performance Evaluation
- ABC Analysis
- Sell-though analysis
• ABC analysis divides an inventory into three categories—"A items" with very tight
control and accurate records, "B items" with less tightly controlled and good records, and
"C items" with the simplest controls possible and minimal records

• Sell-through rate measures the amount of inventory that is sold within a given period
relative to the amount of inventory received within the same period. Strictly speaking,
sell-through rate estimates how quickly a company can sell its inventory, converting it to
revenue
Thank you