Chapter 1414Developing Merchandise Plans

RETAIL MANAGEMENT:

A STRATEGICAPPROACH

Class Agenda

Administrative Item Course Schedule and Final Exam date

Retail Institutions Assignments Introduce merchandising philosophies and

concepts in preparation for Build-A-Bear Workshop and SunRipe cases scheduled for next week

Administrative Item Midterm results

Merchandising

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

Does Gap’s strategic alliance with Diane von Furstenberg reflect all of these things?

Sets the guiding principles for all the merchandise decisions that a retailer makes

Should reflect: Target market desires Marketplace positioning Retailer’s institutional type Defined value chain Supplier capabilities Costs Competitors Product trends

Merchandising Philosophy

Scope of Responsibility

Merchandising view

All buying and selling functions

Assortments Advertising Pricing Point-of-sale displays Employee utilization Personal selling

approaches

Merchandising view

All buying and selling functions

Assortments Advertising Pricing Point-of-sale displays Employee utilization Personal selling

approaches

Buying view

Buyers manage buying functions Buying Advertising Pricing

In-store personnel manage other functions Assortments Point-of-sale displays Employee utilization Personal selling approaches

Buying view

Buyers manage buying functions Buying Advertising Pricing

In-store personnel manage other functions Assortments Point-of-sale displays Employee utilization Personal selling approaches

Merchandising v. Store Management Career Tracks at Hbc

Two Merchandising Strategies

Retailer adjusts shelf-space allocations to respond to customer and other differences among local marketsRetailer adjusts shelf-space allocations to respond to customer and other differences among local markets

Cross-merchandisingRetailers carry complementary goods and services to encourage shoppers to buy moreRetailers carry complementary goods and services to encourage shoppers to buy more

Micromerchandising

Is cross-merchandising different from scrambled merchandising?

Figure 14.5 Considerations in Devising Merchandise Plans

What is Category Management?

A Retailer/Supplier processprocess of managing categories as strategic business units, producing enhanced business results by focusing on consumerconsumer value

A Retailer/Supplier processprocess of managing categories as strategic business units, producing enhanced business results by focusing on consumerconsumer value

• Category Management is a Process and involves a series of interrelated activities

• Category Management is comprised of distinctly different supplier and retailer components and cannot be done alone by either

• Category Management has been shown to lead to improved business results and improved relationships between trading partners

Retailer & ManufacturerRetailer & Manufacturer

Category PlanningCategory Planning

ImplementationImplementation

Category Management PracticesCategory Management Practices

Category Management

RetailerRetailer

Develops Store-Level Develops Store-Level Marketing PlansMarketing Plans

ManufacturerManufacturer

Develops Marketing Plans Develops Marketing Plans and Programs for Brandsand Programs for Brands

ImplementationImplementation

Traditional Business PracticesTraditional Business Practices

A New Way of Doing Business

Brand/SKU Management

Retailer Focused Tactics

Deal-Based Decision Making

Reactive Business Planning

Adversarial Work Process

Category/Brand/SKU Management

Consumer Focused Tactics

Data-Based Decision Making

Proactive Business Planning

Collaborative Work Process

OLD NEW

Figure 14.13 Applying Category Management

Figure 14.4b Shelf Logic: Software for Category Management Planning

Category Captains

What is a Category Captain? an appointed lead supplier who carries out the category

review and leads the process to deliver the plan for the total Category

The Category Captain must: have a demonstrable knowledge of customer insight and

market understanding take an objective approach to growing the overall category recognize the role of other suppliers in delivering the goal

Non-captains?Non-captains?

Merchandise Quality

The battle of the brands

Article

Private(dealer or store)

Private(dealer or store)

Manufacturer(national)

Manufacturer(national)

GenericGeneric

Private Brand Test

Match the Retailer with the Brand Name

Retailer Brand

Canadian Tire President’s Choice

Loblaws Wind River

Zellers Life

Irving Mastercraft

Sears Compliments

Shoppers Drug Mart Kenmore

Sobeys Truly

Marks Work Wearhouse RiverdaleWhy would a retailer (like LaSenza for example) opt to sell only private label

products?