940 3 retail 3rd lecture

7/27/2019 940 3 Retail 3rd Lecture

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A definition: the mix of products a store offers

Its the ESSENCE of retailing

Central to the stores success is the merchandise

selection that matches the tastes references

and expectations of its target customers


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Affects all aspects of retail operations

1. Affects the amount of funds the firm will have to

invest to maintain merchandise inventory

2. Affects the amount of space, labour and

e ui ment it will re uire for stock and dis la

3. The sales and profits generated by a store

..and


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The merchandise selection determines the

Of all the factors that influence a customers

decision to shop at a particular store, none isindividually more important than the selection of

In terms of: PRICE/QUALITY/SELECTIVITY


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The objective of merchandising strategy is to

sell at the store

To develop the merchandise selection, the retailermust meet four merchandise objectives

(being consistent with the firms retail marketing

strategy and its financial objectives)


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Optimal level of variety, assortment and depth

Proper balance of manufacturer, house and

generic brands

Proper selection of assortment within merchandise

lines

Best mix of new and established items


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Retailer normally prepare their merchandise plan

marketing information regarding the items

customers want and what roducts su liers will

be available

,

product appear on the market at various times,

stimulatin merchandise urchase in res ond todemand


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The store must decide how wide a selection will be


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Virgin Megastore vs Independent music store

Advantages in terms of competition and image

Stock turnover: which assortment is sold quicker?


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A WIDE SELECTION = A SLOWER STOCK

TURNOVER


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A WIDE SELECTION = A SLOWER STOCK

TURNOVER


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Why introducing new, strange items?

They IMPROVE the stores image

products

They bring customers into the store


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Once we have planned our assortment, we have to

Success in merchandising depends on the buyers

ability to identify:

Potential sources of su l

Evaluate alternative suppliers

Negotiate purchase agreements


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FACTOR 1

Reputation of supplier

Department stores and mass merchandisers

consider a suppliers reputation to be the most

important criterion in supplier selection


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FACTOR 2

Brand names

The suitability of a supply source depends on

whether its merchandise is appropriate for the

stores target customers


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FACTOR 3

Brand images

The image of the brand must be consistentwith

the stores merchandise strategy


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FACTOR 4

Price and payment terms

Wholesale prices can vary, even for similar

products. Price list, quantity discount schedules

and payment terms of different suppliers must be


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FACTOR 5

Supplier reliability

Buyers attach crucial importance to a suppliers

service standards. Suppliers must deliver at the

right time and in the agreed quantity


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FACTOR 6

Support provision

Retailers prefer suppliers that provide

promotional assistance, such as cooperative

advertising, point of purchase displays and


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merchandise mix

Once Ive selected the assortment and found the,

merchandise mix

Providing a desirable merchandise mix isobviously related to the survival and


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Deep and narrow

assortment =

Merchandise mix

po c es mus re ec

specialty store

.

store must have

numerous brands andstyles of the specialty

area it represents


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Deep and wide

assortment =

Merchandise mix

po c es sugges e

general store

philosophy which

features goodselections of diverse

product lines (and

usua y a pr va e

label)


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A retailers own

brand

Sold exclusively

roug a re a

organisations outlets

Low price, but not

only

New categories


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Shallow and narrow

assortments =

Merchandise mix

po c es o ow e

concept of the

,

which sell only

frequently neededlineswith little

selection or depth in

any g ven ne


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Shallow and wide

assortments =

Merchandise mix

po c es re ec e

five and dime type

.

Discount stores

typically carry a fewbrands and styles of

a wide variety of

gener c pro uc

classes


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Consistent and

compatibleassortments =

policies imply thatwithin the store as a

w o e, qua y, c ass

and selection of

merchandise areconsistent. There are

no extremely good

an no ex reme y

bad products


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COMPETITION

erc an se m x

adjustment: place more

differentiation leading to

specialisation


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FACTOR:

WORSENING

ECONOMICCONDITIONS

Merchandise mix

adjustment:streamline the

merchandise mix and

change merchandise

of having more

economical and lower

products


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FACTOR:

CHANGING

IMPORTRESTRICTIONS

Merchandise mix

adjustment: Reassessthe imported and

importable

components of the

mix


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Understand which are the different elements that

Analyse store name, entrance, windows

The power of colours


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A name should:

a)Allow you to identify and recognise

a store

b)Attract

c) Communicate What do you sell

Which is the quality and thepr ce pos on ng

Which is the target


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Creating a business name is easily one of the mostenjoyable, yet utterly important, aspects of starting

a retail business

Do make it easy to understand, spell andpronounce

Don't use negative sounding words


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Do consider where your business will fall in an

Don't limit your product line by choosing a name

that won't represent all you do

Don't use a strictl eneric term such as

'discount office supply' which cannot be protected

as trademarks


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Attract Seduce - Amaze

Its the first time you get in touch with the customer

Must be visible if you are walking, passing by with

the car, quickly or slowly


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They have to suggest whats happening

A store window has a life of its own: can reinforce

or weaken the brand positioning

Its the erfect scene to ex eriment and test new

ideas: its like a theatre scene

communication: digital, classic, smell, sounds


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It is a frame where products become icons and

of the observer

It is also an antidepressant stimulus, it can be

distracting, amusing, develop imagination and

It can highlight the convenience of a purchase On a store window you can use any mean of

communication: di ital classic smell sounds

OPEN WINDOW


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The exhibited objects mix with the interioro t e store an t ey are not perce ve n a

tangible way

The entire store becomes a window

The treatment of the interior exhibition will

have to be perfect, well organized, withfocal point under evidence

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+PARTIALLY CLOSED WINDOW


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The main advantage is that it highlightsmore t e ex te pro ucts n ront o t e

backdrop

The light is able to involve the observer

Its not suitable for important settings,

because the open part is going to distract

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Its the best solutionIt manages to involve the passers-by

Concentrate, no distraction

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With the entrance, ou define our level of

openness to the customer

Exclusivity, luxury Attraction and friendliness

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environment ATMOSPHERE

SIGHT

=

VISUALMERCHANDISING: Name,entrance,windows SOUND

ESTHETIC

MARKETING

PhisicalelementsPhisicalelements u ng rc tecture Storedesign Display

TOUCH

a a ec ea a ec econsumers

consumers

perceptionperception

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ENTERTAINMENT

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PLAY

FOOD&RELAX

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Byzantium, inaugurated in 330 AD by Costantine

By order of Costantine, every street in the city had

to have a shop: bazaar

Closed structures where indoor merchants carr

out their business

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Since ancient times, all populations gathered in

products and their creativity craft

The merchants showed the product in a creative

and tidy way, so they could attract the greatest

For years, THE MARKET has been the centers of

business, trade of products and knowledge

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In the Eastern countries, where trade is in the

,

to show as many products as possible to the

customer

Sometimes insistently, with the hope of

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Colors have accompanied and influenced man

Religion

Art

Science

Magic

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The are divided into

PRIMARY: red, blue, yellow

others

SECONDARY: orange, green, purple

Obtained by mixing two primary colors in equal

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

yellow-orange, red-violet, red-orange

Obtained by mixing two primary colors in

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represen s: sun g , ea , n e gence

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

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Negative: sickness, jealousy

To use: public places, business studies, kitchens

Not to use: bedrooms

Effects: makes eo le nervous

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It re resents: tradition, lastin values

It symbolizes: serenity, kindness, eternity

Positive: stability, peace, harmony, sea, sky

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melancholy

To use: hospital, bedrooms, bathrooms

Not to use: meetin areas and dinin rooms

Effects: it has a quiet and relaxing effect, sleepy

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It re resents: firml , stable values which do not

change

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Positive: nature, fertility, perseverance, relaxation

Negative: envy, disease, anger

To use: operating rooms

Not to use: business laces

Effects: it flattens the room, it promotes indecision


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It re resents: stren ht, nature, earth

It symbolizes: lack of roots

Positive: practicality, warmth, security

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It re resents: romanticism, love, beaut

It symbolizes: femininity, youth

Positive: quiet and creativity

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It re resents: ower, distinction

It symbolizes: occultism, mourning

Positive: power, formality, depth, style and

elegance

Negative: malice, fear, death

To use: stages, fitting museums and shop windows

Not to use: in other laces

Effects: increase emotional reaction and symbol of

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It re resents: be innin ,li ht, sim licit

It symbolizes: virginity, innocence and peace

Positive: snow, innocence, purity

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To use: everywhere, using colored furniture to

compensate the whiteness

Not to use: hos ital

Effects: too strict

940 3 retail 3rd lecture

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