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LEARNING OBJECTIVES
Identify the dimensions of a retailers assortment plan, including variety, depth, availability and price level Understand the internal and external factors that will influence the assortment Understand the criteria used for product selection and appreciate the attention to detail required in the process. Understand the relationship between products and consumers and how this can influence product selection Explore the product assortment monitoring and review process
WIDTH
(variety of different types of product) DEPTH (choice within a product type, e.g. brand, product variation and price levels)
By product similarity
e.g.
Yoghurts
By end use
e.g.
By price
e.g.
By brand
e.g.
Table 4.1 Assortment Plan for Red Wine Price Level High Medium Low High Medium Low High Medium Type Beaujolais, Claret, Cabernet Sauvignon Cabernet Sauvignon, Cotes Du Rhone Vin de Table Rioja, other Tempanillo, Other Spanish Chianti, Other Valpolicella, Other SKUs 7 5 1 3 2 1 3 2
French
Spanish
Italian
4 2 2 1
Boxes
French Italian
1 1
Store size, store characteristics and fixturing availability Complementary merchandise (balance) Profitability of merchandise Corporate objectives (e.g. stock availability service Vs. exclusivity) Feedback from store personnel Disciplined or opportunistic range development
Consumers have different types of needs and motivations for shopping Consumer trends will affect the product category life cycle Product managers, particularly buyers must track consumer trends and purchasing patterns, influenced by
Essential to keep customers interested and inspired in a competitive market Resource hungry, with high failure rates Retailers who have a highly developed ownbrand strategy usually have facilities for inhouse product innovation
fashion
design studio development kitchen research and development labs graphics departments (packaging)
Getting each product in its totality right in terms of type and quality Consideration of a product in minute, qualitative detail e.g. components, ingredient, branding, packaging Ensuring each product criterion contributes to the products ability to satisfy consumer needs, Usually the job of the buyer, or category manager
aesthetics,
protection, function, brand identity, promotion, added value blending of shape, colour and materials, related to fashion and taste, abstract maintenance, durability, versatility, health, safety and environmental issues
Style
aesthetic
Utility
function,
Product Quality
QUALITY ASSURANCE
International product standards Ethical and environmental assurance Quality Assurance Systems to maintain consistent quality level Quality Control to halt the progress of faulty products Adoption of Quality Management Standard (ISO 9000)
PRODUCT SPECIFICATION
Provides a link between buyers product negotiations with supplier and deliveries Describes in detail what the product is and comprises (e.g. dimensions, components, production methods) May include a blueprint and/or sealed prototype Becomes the standard for production and quality checking
PRODUCT BRANDS
A brand is an intangible product feature A brand can be the only attribute that counts for the consumer Represents a quality guarantee Manufacturers brands usually represent quality and expertise Retailer brands (own brands, private label) have traditionally been low price variants, but now more complex Endorsement of products is an important variation within the branding theme
Managing the brand portfolio is at the heart of many retailers product strategy Retailer brands bring control, improved profits, and the opportunity to target specific customer groups Retailer brands can have different objectives:
exclusive brands own brands / house brands own label retailer sub-brand
prestige and positive consumer associations product development and marketing support
The price of a product is subject to different value perceptions and interpretations of individual customers Setting prices involves
an
appreciation of what represents value to consumers retailers financial objectives (e.g. target margins or profit contributions)
reaching
See chapter 12
tailored to needs of different types of retail managers on performance (e.g. sales and profits) in relation to resource input (e.g. space) in depth analysis of product assortment performance on a regular basis
Range reviews
formal,
trend analysis Product sector analysis Catchment area analysis Product range analysis