MERCHANDISING AND

PRODUCT ASSORTMENT
• Merchandising-AMA- “the planning
involved in marketing the right
merchandise at the right place at the right
time in the right quantities and at the right
price”
• Merchandise management -the analysis,
planning, acquisition, handling and control
of the merchandise investments of a retail
operation.
 Contd…
• Analysis-of consumer behavior is
essential
• Planning-merchandise to be sold in the
future must be bought now
• Acquisition-merchandise needs to be
procured
• Handling-ensuring proper condition
• Control-it involves spending money
FACTORS INFLUENCING
MERCHANDISING
MERCHANDISE DECISIONS
 KEY MERCHANDISING TERMS
• Staple/basic merchandise-which are always in demand.
They may also be the basic necessities of life like
sugar ,salt, dal, stationary etc
• Fashion merchandise -which has high demand for a
relatively short period of time. Jeans short length kurthas
etc
• Seasonal merchandise -like rain coats, umbrellas etc
• Fad merchandise -usually generate a high level of sales
for a short time
• Style -refers to a unique shape or form of any product
 MERCHANDISE FORECASTING
• Forecasts are projections of expected
retail sales for given periods. Is tomorrow’s
expectation based on yesterday’s
achievements and today's plan is the
foundation of merchandise plans.
TYPES OF FORECASTS include
– Overall company projections
– Product category projections
– Item-by-item projection
– Store-by-store projections
 METHODS
1) Statistical Method
• Time series analysis
• Regression analysis and correlation
• Barometric technique
2) Survey Method
• Buyers
• Experts
• Sales force
 Contd….
3) Market Study
• Market test method
• Controlled laboratory experiment
4) Substitute approach
• One way to forecast sales for narrow
categories is to project sales on a
company basis and by department and
then to breakdown figures judgmentally
into merchandise classifications.
 STEPS
• Reviewing past sales
• Analyzing the changes in the economic
conditions
• Analyze the changes in the sales potential
• Analysing the changes in the marketing
strategies of the retail organization and the
competition
• Creating the sales forecast
 BENEFITS
• Reduce the cost of inventory by avoiding over
stock and under stock
• Helps in setting sales target.
• Helps in forming suitable advertisement and
promotion programs.
• It helps in forecasting short term and long term
financial requirements.
• Helps in planning man power requirement.
• Helps in planning of a new store or expansion of
an existing store.
• Helps to reduce the business risk.
• Thus it helps to earn maximum profit.
 MERCHANDISE BUYING
• BUYER RESPONSIBILITIES
A) Developing the merchandising strategies
B) Planning and selecting merchandising
C) Vendor selection
D) Pricing the merchandise
E) Inventory management
 HANDLING
• It involves seeing that the merchandise is where it is
needed and in the proper condition to be sold.
• Protective packaging and insurance
• Cold storage in transportation and speed in transportation
etc
• Use of freezers in the showroom for highly perishable
items
• Proper warehousing to protect goods from the
unfavorable conditions such as humidity, dust, rodents
etc.
• Proper packaging to avoid leakage, spoilage and
breakage of goods
• Proper recruitment and training of personnel to handle
goods with care
 PACKAGING
• It is defined as “all the activities of
designing and producing the container for a
product. The container is called a
package”– Kotler
• Packaging refers to the activities of
wrapping or enclosing the product in a
container like bottle, tin, jar etc to facilitate
transportation, storage, sales or
consumption.
 TYPES OF PACKAGING
1) Primary package – it relates to the
products immediate container.
2) Secondary package- it refers to the
additional layers of protection that are
removed when the product reaches to its
final destination.
3) Shipping package- It is concerned with
the packing arrangements used for
storage of transportation of the product
 FUNCTIONS OF PACKAGING
• Protection
• Promotion
• Convenience
• Identification
• Information
 FACTORS GOVERNING
PACKAGING DECISION
• Material used
• Cost
• Size, shape, color and design
• Promotion
• Consistency
• Multiple packaging and individual
packaging
 REQUISITES OF A GOOD
PACKAGE
• Package should suit to the product.
• Must protect the contents.
• Meet the requirements of different
segments of consumers who have
different levels of income.
• Must be attractive.
• Must be durable.
 ADVANTAGES OF PACKAGING
1) Advantages to marketer
• Protects the product from being damaged
or spoiled
• Promotes the product
• Facilitates storage and transportation
• Helps in branding
• Act as a silent salesman
 Contd…..
2) Advantages to middle man
• Facilitate transportation and storage
• Easy display
• Keeps the product fresh and clean
• Advantages to consumer
• Convenient handling
• Less possibility of adulteration
• Information regarding use and products and
• Easy identification
 LABELLING
• According to Mason and Rath “the label is an
informative tag, wrapper or seal attached to a
product or products package.”
• The purpose of labeling is to give the consumer
information about the product.
• It contains information like brand name, name
and address of producer, weight, count etc,
ingredients, directions for the use, special care
cautionary measures, recipes of food products
date of packaging and date of expiry and retail
price etc.
 KINDS OF LABELS
• Brand label- This simply gives the brand name
or mark
• Grade label- This gives the grade or quality of
the product by a number ,letter or word.
• Descriptive label- It gives details of products, its
functions, price, warning, instruction etc
• Information label- provides maximum possible
information about the product. It is different from
descriptive level in the sense that it contains full
instructions on the use and care of the product.
 Advantages
• Helps to identify the product or brand and
helps to differentiate from other brands
• It announces product description ,bar code
and using information
• It contains the prices of products which
can not be varied by the sellers
• It helps in advertising and promoting the
product
• Proper design attract the customers
 Disadvantages
• It is of no use to illiterate people.
• It increases the cost of the product
• As it helps the customers to compare the
merits and demerits of the product, the
lower quality products are sure to be
discarded by them
• Attractive labeling leads to impulsive
consumption
• It requires a lot of time and effort.