Merchandise Management

In: Business and Management

Submitted By annika0427
Words 1464
Pages 6
BUS4003 Retail and Channel Management
Merchandising Management in Retailing:
Vendors, retailers, customers
Dr. Kenneth K. Kwong
Department of Marketing and Management
Week 9

Merchandise Management
• Merchandise management is a process by which a retailer attempts to
– offer the right quantity of the right merchandise
– in the right place at the right time and
– meet the company’s financial goals or profit objectives

• Retailers need to be in touch with and anticipate what customers want to buy (sensitive to changes in the market trend) but are also able to analyze sales data continually and make appropriate adjustments in prices and the inventory level
Develop an assortment plan

Determine appropriate inventory level
& product availability

Buy merchandise

Monitor & evaluate performance & make adjustment

Forecast category sales

Allocate merchandise for stores

Develop a plan for managing inventory

Have to balance the interests of both vendors, retailers, customers

Merchandise Management
• A merchandise category is an assortment of items that customers see as substitutes for one another (the depth of merchandise)
– different favors, tastes & brand names of the same product (beverages)
– vendors & retailers may define their own categories different in functions or product attributes and consumer behaviors
– shampoos vs. conditioners (personal care products), paper towels (paper products) vs. detergents (cleaning aids) (manufacturers vs. retailers)
– supermarkets tend to manage category by brands; a buyer for each brand
(good for stocking, distribution & promotion but less efficiencies & may result a wastage due to overlook the interdependencies between SKUs)
– department stores manage merchandise by categories; a buyer oversees all merchandising activities for one single category
– category management…...

Similar Documents


...of the following is found within this retail classification scheme EXCEPT: a. the profit potential. b. amount of service offered. c. the breadth and depth of product lines carried. d. the relative prices charged. Answer: (a) Difficulty: (2) Page: 435, 437 5. The typical method of retail operation used by supermarkets and nationally branded fast-moving shopping goods is called: a. self-service retailing. b. limited-service retailing. c. full-service retailing. d. service-merchandiser. Answer: (a) Difficulty: (2) Page: 437 6. A good example of a retail operation that is classified as being a limited-service retailer is: a. Service Merchandise. b. Best Buy. c. JC Penney. d. Zales Jeweler’s. Answer: (c) Difficulty: (3) Page: 437 7. A good example of a retail classification called self-service retailing is: a. Sears. b. JC Penney. c. Best Buy. d. Macy’s. Answer: (c) Difficulty: (3) Page: 437 8. Describing retailers by the length and breadth of their product assortment is classification by: a. amount of service. b. product line. c. relative prices. d. control of outlets. Answer: (b) Difficulty: (1) Page: 437 9. A _______________________ is a retail store that carries a narrow product line with a deep assortment within that line. a. shopping......

Words: 6127 - Pages: 25

Merchandise Plan

...The goal of the merchandise plan is to provide a plan broken down to the lowest levels of the merchandise hierarchy to build a receipt budget by week that is used for open-to-buy purposes. KPIs include, but are not limited to, markdowns, reductions, and inventory and above/below the line adjustments to gross margin, receipts and inventory. Plans are usually developed in value with average unit retail prices for inventory, receipt and sales added to understand unit volumes at a high level. The sales flavors regular, markdown, promotional and clearance sales KPIs are planned individually including the average retail price of the sales type. In-season plan updates recalculate open-to-buy budgets based on trend. With that the analysis of business trends to identify variances to plan are possible on a weekly basis and allow stakeholders to take action. Merchandise Planning – OTB and Unit Flow Plan The merchandise Planning includes several workbooks for the different levels of the article hierarchy. The workbooks look very similar, but addressing different roles in the organization, like VP of Planning, Planning manager, merchandise manager, or however your organization is set up. One very nice feature is, that the solution provides you flexibility depending on your set-up, if you have planners for all the different levels (you remember: division, department, class and subclass), or if you just want to plan for example on division and break it down from there to class......

Words: 270 - Pages: 2


...Material management department is typically responsible for directing the supply chain. Material management is an umbrella department that has many other functions (e.g., central store, laundry and linen operations, and sterile processing). The core purpose of material management is to direct and control the movements of goods in an efficient manner through a hospital system (Langabeer, 2008). This material management proposal document will elaborate on the role materials management plays within a hospital and the role of operations managers in this process. This document will further identify possible constraints a hospital may experience in its supply chain, the potential effects and justification on implementing a new collaborative planning process, and provide suggestions on how to manage a hospital supplied during a disaster. Role of Materials and Operations Management The role of materials and operations management plays within a hospital system is vital to the success of any health care organization. According to Langabeer (2008) material management controls significant resources and have total expenditures, or spending at 50% of a hospital budget. Materials management not only directs and controls the supply chain of a health care organization it is responsible for managing the flow of goods throughout the hospital and carry out supply and resource logistics. Materials management has numerous meanings and some hospitals view material management as an umbrella......

Words: 2549 - Pages: 11

Merchandising Operation and Merchandise Inventory

...Merchandising operation and merchandise inventory Businesses Inventory that sell a product to customers  Merchandise held for sale  Asset account 3 Describe and illustrate merchandising operations and the two types of inventory systems 4 Balance Sheet Income Statement Sales Inventory  Asset revenue Cost of goods sold  Expense 5 Cash Purchase inventory Collect cash from customers Accounts receivable Sell inventory Inventory 6 PERIODIC  Goods PERPETUAL  Record counted periodically to determine quantity  Used by small businesses  Less popular now because of computerized inventory systems of quantity of goods is constantly updated  Better control of inventory  Popular now due to bar codes and computer scanning 7 Learning Objective 2 Distinguish between merchandising and manufacturing Difference between Merchandising and Manufacturing Manufacturing  converts raw materials to finished goods for sale Merchandising  merchandising companies purchases finished goods for sale.   In the Income Statement, Cost of goods sold = Beginning finished goods inventory plus cost of goods manufactured minus ending finished goods inventory In the Balance Sheet, three inventory accounts : finished goods, work in process, and raw materials. In the Income Statement, Cost of goods sold = Beginning merchandise inventory plus cost of goods purchased minus ending merchandise......

Words: 1677 - Pages: 7

Merchandise Planning and Management

...MERCHANDISE PLANNING AND MANAGEMENT Any business enterprise is preoccupied in planning its merchandise offerings. Effective merchandise planning is an important aspect of retailing. Incorrect planning of merchandise can lead to a very disastrous situation for retail business. Before making any merchandise plan, it is important that a retailer must know the meaning of some of the merchandise terminology: 1. Item refers to a unique kind of good within a merchandise line. 2. Stock Keeping Unit (SKU) refers to one or more of a distinctive item. 3. Merchandise Classification is a grouping of goods that serve similar customer need and exhibit closely sale patterns. 4. Variety relates to the number of different merchandise lines that are stocked by the retailer 5. Scrambled Merchandising. Some retailers follow a scrambled merchandising which occurs when unrelated merchandise line are introduced into limited-line store. 6. Assortment refers to the number of choice that are available within a particular merchandise line. THE PROBLEMS OF BUYING THE GOODS Customers nowadays are the best judge of what they want, what they will buy and from what source they will buy. With these attitude and behavior of the consumer, the retailer is then concerned with the task of securing the merchandise that will be saleable and bring the profits to the stores. This could only be accomplished if the retailer can identify clearly the basic problems in buying. What to buy. The......

Words: 1333 - Pages: 6

Porter's Six Forces Analysis General Retail: Merchandise/Department Stores

...February 25, 2010 Assignment 2 Porter’s Six Forces Analysis General Retail: Merchandise/Department Stores Prepared by: Yulia Petukhova ID# A30 The department store industry will be analyzed taking department stores as players, individual consumers as buyers, and manufacturers and distributors as the key suppliers. The Rivalry among existing firms High The period from the end of the 20th century up until now has been marked by the consolidation trend in the department store industry, characterized by major acquisitions by a few larger, powerful competitors, greatly intensifying the rivalry among them.9, 13 Since there are only a few of them in the industry, they tend to match each other’s steps in some way or another. After JC Penny introduced itself to Manhattan just a block away from Macy’s, it is only a matter of short time before Kohl’s will finally announce its move into Manhattan as well.10 Slowdown in the industry growth coupled with reduced consumer spending and low switching costs intensifies rivalry even further prompting the market players to differentiate their products by introducing exclusive brands and increasing innovation.3, 15, 17, 19, JC Penny contracted Cindy Crawford to extend her jewelry brand exclusively at their stores, while Macy’s has signed a strategic alliance agreement to become an exclusive retailer of Ellen Tracy branded women’s sportswear in spring......

Words: 2385 - Pages: 10

Buying Merchandise

...CHAPTER 14: BUYING MERCHANDISE Merchandise Branding Strategies • • • Manufacturer (National) Brands – Designed, produced, and marketed by a vendor and sold by many retailers Private-Label (Store) Brands – Developed by retailer and only sold in retailer’s outlets Licensed Brand – Developed by licensee and right sold to either manufacturer or retailer A special type of manufacturer brand is a licensed brand, in which the owner of a well known brand name (licensor) enters a contract to develop, produce and sell the branded merchandise. The licensee may be either 1) The retailer that contracts with a manufacturer to produce the licensed product 2) A third party that contracts to have the merchandise produced and then sells it to the retailers. PPC-RM Page 1 Buying from Vendors of National Brands • • • Helps retailers build their image Helps build traffic flow Reduces selling and promotional expenses What do Buyers do at Market? • • • • • Meet with vendors Discuss performance of vendor’s merchandise during the previous season Review the vendor’s offering for the coming season May place orders for the coming season Sometimes they do not buy at market, but review merchandise, return to their offices to discuss with the buying team before negotiating with vendors Negotiating with Vendors Two-way communication designed to reach an agreement when two parties have both shared and conflicting interests. Planning Negotiations • • Consider prior history Assess current......

Words: 508 - Pages: 3


...Qu8 -Perpeptual inventories, continue Restaurant, housework store (correct), dealer ship, mampop convience store -Periodic inveno most accurate Auto mobil dealer, Fine Jelwery store (correct), furniture, local neighborhood restaurant Chapt 6 -specific id, cant not classify Houseware store, jlwet stor, auto dealr, art galary (correct) Perpetual inventory system and periodic inventory systems are the two systems of keeping records of inventory. In perpetual inventory system, merchandise inventory and cost of goods sold are updated continuously on each sale and purchase transaction. Some other transactions may also require an update to inventory account for example, sale/purchase return, purchase discounts etc. Purchases are directly debited to inventory account whereas for each sale two journal entries are made: one to record sale value of inventory and other to record cost of goods sold. Purchases account is not used in perpetual inventory system. In periodic inventory system, merchandise inventory and cost of goods sold are not updated continuously. Instead purchases are recorded in Purchases account and each sale transaction is recorded via a single journal entry. Thus cost of goods sold account does not exist during the accounting period. It is determined at the end of accounting period via a closing entry. Differences Between Perpetual and Periodic System Following are the main differences between perpetual and periodic inventory systems: * Inventory......

Words: 3583 - Pages: 15


...Increase in salaries payable Decrease in other current liabilities Cash provided by operating activities 4-4 (110,000) 50,000 (15,000) (150,000) 15,000 _(70,000) (280,000) ($150,000) Requirement 2: Net income is $100,000, yet cash used by operating activities is ($150,000). There are several reasons for the difference. Accounts receivable increased by $110,000 (i.e., not all of the sales reported in the 2001 income statement were collected in cash in 2001). Inventories decreased by $50,000 (i.e., part of the cost of goods sold appearing in the 2001 income statement consists of inventory that was paid for in an earlier year (i.e., 2000). Accounts payable decreased by $150,000 (i.e., the firm paid cash for all of its 2001 purchases of merchandise from suppliers, as well as $150,000 for purchases made in 2000). Other current liabilities decreased by $70,000 (i.e., the firm paid cash for the various operating expenses it incurred in 2001 as well as $70,000 of operating expenses that were incurred, but not paid in cash in 2000). The changes in the prepaid expenses and the salaries payable accounts, along with the depreciation expense, explain the remaining difference between the firm’s net income and its cash flow from operating activities. Note: This problem demonstrates that a firm can be profitable under the accrual basis even though it does not generate positive cash flow from operating activities. E4-9. Determining cash from operations and reconciling with accrual......

Words: 11298 - Pages: 46

Football Merchandise

...please consider all types of club merchandise in your thinking i.e. Car accessories, bedroom décor/ accessories, memorabilia, mugs, car stickers etc. NOT just Football shirts. NOTICE:ALL QUESTIONS REQUIRE THE CIRCLING OF ONE ANSWER 1. Has the success of your chosen club ever affected your merchandise buying behaviour? (i.e. trophy success, new signings?) No 2. Does the purchasing of merchandise make you feel more involved in your club? (Closer to the club? Part of something bigger?) Yes 3. If you are a supporter that purchases replica shirts or crested leisure wear, In what circumstances do you wear the product? 1) Matchday 2) At home 3) to the shops 4) to the gym A) 1 & 2 NOT FOR PARTICIPANTS NOTICE: if the indiviual wears the garment at leisure as well as at matches and at home, I can begin to determine whether there is a trend between people who purchase a new shirt every season and how often they wear it 4. Do you believe that the marketing techniques of your football club has ever persuaded you to purchase merchandise? (i.e. Kit Unveilings, advertising, sales?) No 5. When purchasing club merchandise, how often is the product for your personal use? A) Never B) Rarely C) Sometimes D) Most of the time 6. Have you ever bought Club Merchandise as a gift for somebody other than yourself? If Yes: When/why do you buy it? A) Football Club Merchandise is a ‘safe’ option ......

Words: 569 - Pages: 3

Onlinevisual Merchandise

...Master Thesis On Visual Merchandising in an Online Store By Aryamparambil Pooja Kishor Babu Roll No: 005 PGDM - Marketing Under the guidance of Prof. Vilasini Jadhav K J SIMSR K J Somaiya Institute of Management Studies & Research January, 2016 DECLARATION I, Ms. Aryamparambil Pooja Kishor Babu hereby declare that this thesis is the record of authentic work carried out by me during tri semester IV and has not been submitted to any other University or Institute for the award of any degree / diploma etc. Signature Name of the student: Aryamparambil Pooja Kishor Babu Roll No: 005 Date ACKNOWLEDGEMENT I take this opportunity to express my deep gratitude to my instructor and faculty guide Ms. Vilasini Jadhav, whose expertise and able guidance helped me immensely in the successful partial completion of this Master Thesis. I express my sincere thanks to K.J.SIMSR for providing me the opportunity to work on this thesis. Lastly, I thank God, my parents and family for their constant encouragement and support in my endeavor. Table of Contents | |Topic |Page No. | | |Cover Page ...

Words: 3809 - Pages: 16


...percentage of catalog sales come back to us.) Lastly, we will organize a phone bank for several days and have employees make calls to solicit donations. Product acceptance criteria: The project is successful if and when $100,000 dollars (our four campaigns + company match) is raised for the Johnson family. Project Boundaries: The boundaries of this project will be limited to the project objectives and the service requirements as outlined above. Employees unable to perform any of the duties outlined in the service requirements and characteristics section must inform the project manager immediately upon notice of inability to perform required designated tasks. Project Requirements and Deliverables: The project management related deliverables are: Scope management plan, WBS, cost analysis, etc. The charity campaign deliverables are: four fundraising campaigns and $50,000 (plus company match of $50,000 for a total of $100,000). Project constraints: All volunteers will be available only on a part-time basis. Preliminary estimate cannot be specified with accuracy because of unpredictability of the donations. Controlling Project Costs and Risks Summer 2008 Team #3 (Raisa, Omar, Roberto, David, Mark, Suzanne) Week #2 and #3 Team Exercise Project assumptions: 1. All 1000 employees will participate in at least one of the four fundraising campaigns. 2. The Johnson Family will support us in any way they can (e.g., email messages to company, appearance at......

Words: 1033 - Pages: 5


...objectives ○ outlines clear responsibilities to groups and individuals including ethical behaviour ○ clearly links objectives, values and standards to responsibilities of groups and individuals ○ addresses the expectations of the organization ○ uses media and language appropriate to the audience. Your assessor will be looking for evidence that: ● you have analysed and identified the needs of case study 1, and reflected this analysis in the email ● you have analysed and identified the needs of case study 2, and reflected these in the strategic presentation you have developed. Case study 1 MacVille is an import/export company that sells and maintains espresso coffee machines. As part of your preparation for a senior management role with MacVille, your manager, Craig Jenkins, has asked you to review and report on an OHS incident that occurred in Brisbane recently with an employee Gary King. Your manager explains that Gary King is a maintenance technician. At 60 years of age, he is the oldest employee in the company. Gary is a technical espresso machine specialist who has worked in the industry for over 30 years and is recognised as one of the best and most knowledgeable people in the trade in Australia. Recently, the maintenance manager took Gary to the company doctor when Gary complained of an onset of severe lower back pain while undertaking repairs to machines in the workshop. Subsequently, Gary was given four days off work by the......

Words: 3293 - Pages: 14


...variety of good-quality merchandise, convenient hours, friendly and knowledgeable service as well as the guaranteed satisfaction on items purchased” ( WalMart operates on low price strategy also known as every day low prices (EDLP) that builds trust among the customers (Articlesbase, 2009).  EDLP saves retailers the time and expense of periodic price markdowns, saves manufacturers the cost of distributing and processing coupons, and is thought to generate shopper loyalty ( The strategy lies in purchasing the goods at lower prices and selling the goods to customer at much lower prices, cutting the price as far as possible and increasing the profit by increasing the number of sales (Articlesbase, 2009).   Walmart product quality is tested by third party independent testing labs. With the use of this method; Walmart ensure customers with products such as food baby products, apparels, home, and pharmaceutical are safe for use. This method gives customers a sense of safety when purchasing products from Walmart. As a rule, Wal-Mart and Sam's Club test products at Walmart’s discretion to ensure they comply with the highest safety standards set by state and federal government statutes. For competing products, Walmart perform comparative testing (WalMart. com). Reference: Strategic Management: A Case study of Walmart Inc Every Day Low Price (EDLP) retrieved from:......

Words: 319 - Pages: 2


...Abstract You will either lose or save an abundance or money in the development of starting the corporation or retelling the merchandise this all depends on how you produced your merchandise. There are three things that need to be considered; the manufacture price, your financial plan and estimated profit margin. You will correspondingly need to reflect on your management knowledge and the people that assist you with the corporation judgments and the profits, when choosing how you need to manufacture your merchandise.  How Management Operates The means of support if you want a successful corporation is the management. Management is everything and anything that affects the corporation in a moneymaking way or it could have a harmful effect on the corporation. The people that are responsible for the critical decision making to do with the corporation and they make the decisions dealing with the financial management, are called the managers. Controlling, leading, organizing, and planning are the four occupations management is broken down into. Each one of those corporations play a very significant part of what is takes to make you management successful for the corporation. (Coastal Carolina University, 2001-2011) In management controlling is completely regarding answerability. In the corporation or in a section of the corporation, a manager has a duty to establish goals, observer the goals, and if it is necessary modify or make different goals. A manager is also......

Words: 1144 - Pages: 5