BASICS OF MERCHANDISE

MANAGEMENT
Goods well bought
are half sold
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Learning Objectives
The concept of merchandising
The evolution of the function of
merchandising
Planning Process
Planning for Merchandising

Merchandising
Simply, it can be termed as the planning,
buying and selling of merchandise.
planning and control of the merchandise
inventory while balancing the customers
expectation andretailers strategy.
Merchandising management is the
science of evaluating human behavior
and buying habits in order to determine
the best way to stock, display, and sell
goods at retail stores.

What is Merchandising?
American Marketing Association has defined
merchandising as, the planning involved in
marketing the right merchandise at the right
place at the right time in the right quantities at
the right price.
It is achieving the Five Rights
Having the right product
In the right quantity
Available at the right place
At the right time
At the right price
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Merchandise Planning
Merchandise planning is
necessary because it takes time
to buy, have merchandise
delivered, record the delivery
and subsequently display the
merchandise.

Merchandise Management
Decisions regarding product mix to be offered

Width and depth of the merchandise is considered

On :
The number of product lines a retailer wants
to offer
Service levels provided
Store formats

Criteria for purchase decisions are formulated in ter

Frequency of Purchase of Replenishment Cycles
Vendor Selection
Terms and conditions with the vendors
Forecasting and Budgeting

The Evolution Of
Merchandising

Devising Merchandise Plans

Planning is at two levels:

The Merchandise Budget Financial
plan detailing how much money to invest
in product inventories.
The Assortment Plan Distribution in
terms of various product lines which the
retailer wants to carry.

Dimensions of merchandise
mix

Factors Affecting The Buying

Function

Source: A theory of merchandise buying behaviour, Jagdish N Seth, Theory in Retailing, American Marketing Association

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Merchandise Planning
Process

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Merchandise Management Issues

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Developing Merchandise Plan

It is the key phase in retail strategy

A retailer must have:

Proper assortment of goods and services

They are in demand

Sell them in a consistent manner with the

Strategy.

Merchandising:

All activities involved in acquiring goods / services and m

them available at the place, time and price and in the qu
That enables a retailer to achieve his goals.
Merchandising Plan / Philosophy
Must reflect:
Expectations of Target group
Retail Format

Costs
Market place positioning competitors
Product Trends
Value chain
Suppliers capabilities

Merchandising Plan drives every product decision like:

Product line to carry
Shelf Space to be allotted
Products to inventory turnover
Pricing decisions

Breadth and assortment across the store (narrow / wide)

Depth within each category ( deep / shallow)
Quality
National Brands / Store Brands and its ratio

Micro Merchandising

Retailer adjusts its shelf-space allocations to respond to cus

And other differences among local markets.
Cross Merchandising

A retailer carries complementary goods and services so th

The shoppers are encouraged to buy more.