506 TTLM Merchandising Introduction

MINISTRY OF COMMERCE & INDUSTRY
GOVERNMENT OF INDIA
INTEGRATED PROGRAMME IN RETAIL

MANAGEMENT
SEMESTER – 5
MERCHANDISING INTRODUCTION
HANDBOOK
PREPARED BY: N.B.LAL

REVIEWED BY:
HOD: MR. A K SHARMA
FDDI SCHOOL OF RETAIL MANAGEMENT

FDDI/FMRM/TTLM/MBA-103 Page 1
Table of Contents
UNIT TOPIC PAGE
Unit-1 Concepts of Merchandising 3
Unit-2 The Model of Retail Merchandiser 9
Unit-3 General Roles and Responsibilities of retail 14

merchandiser
Unit-4 Overview of merchandise management process 22
27
Unit-5 Merchandise Mix management
Unit-6 Merchandise Mix Strategies 31
Unit-7 Classification of merchandise 36
Unit-8 Fashion Merchandising 41
Unit-9 Sock Plan for fashion merchandise 46
Unit-10 Lifestyle Merchandising 51
Unit-11 Organizational Structure of Export Organization 56
Unit-1 Concepts of Retail Merchandising
RETAIL: The word retail is derived from the word retalier, which in French means to cut off
or to break the bulk.
RETAILING: Retailing includes all the activities involved in selling goods or services to the
final consumer for personal non-business use, usually in small quantities.
TRADING: Trading means buying and selling of goods. Traders may be wholesalers or
retailers.
MERCHANDISE: Merchant means trader and merchandise means goods meant for trading.
MERCHANDISING: All the activities and processes related to proper management of

merchandise are referred to as merchandising.
In Eastern Europe, particularly in Russia, the term “merchandising” is commonly used within
the trading industry and denotes all marketing and sales stimulation activities around PoS
(point of sale), design, creation, promotion & care of merchandise and training of the sales
staff. Basically a merchandiser is someone who is continuously involved in business
promotion by buying and selling of goods.
IN THE SUPPLY CHAIN, merchandising is the practice of making products in retail outlets
available to consumers, primarily by stocking shelves and displays. While this used to be
done exclusively by the stores' employees, it is increasingly done by the manufacturer,
vendor, or wholesaler that provides the products to the retail store. Product categories
where this is common are Beverage (all types, alcoholic and non-alcoholic), packaged baked
goods (bread and pastries), magazines and books, and FMCG category specially health and
beauty products. For major food manufacturers in the beverage and baked goods industries,
their merchandisers are often the single largest employee group within the company. For
nationwide branded goods manufacturers such as The Coca-Cola Company and PepsiCo,
their respective merchandiser work forces number in the thousands.
IN MARKETING, one of the definitions of merchandising is the practice in which the brand or
image from one product or service is used to sell another. Trademarked brand names, logos,
or character images are licensed to manufacturers of products such as toys or clothing,
which then make items in or emblazoned with the image of the license, hoping they'll sell
better than the same item with no such image. For the owners of the intellectual
property(trademark or logo) in question, merchandising is a good source of revenue, due to
the low cost of letting a third party manufacture the merchandise, while the IP owners
simply sit back and collect the merchandising fees.
 Café Coffee Day’, earns 10% of its revenue from sale of merchandise. The coffee
chain, with more than 970 cafes in India, plans to increase the share of merchandise
by launching more innovative products.
 Café Coffee Day started merchandising with coffee powders, and later on added
other items associated with coffee such as mugs and crockery. It further added
mints, chewing gums, nibbles, crunches, energy bars and even T-shirts and items of
topical interest.
 Australian coffee chain Gloria Jeans, which has 12 outlets in Mumbai, Delhi and
Bangalore, is earning around 5% of its revenue from marketing of merchandise. The
merchandise itself could take the form of a coffee grinder or an espresso machine or
a set of espresso cups etc.
 Besides adding to revenue, the merchandise allows the retailer to interact with
customers even beyond the café space.
Merchandising, especially in connection with child-oriented films and TV shows, often

consists of toys made in the likeness of the show's characters (action figures) or items
which they use. However, sometimes it can be the other way round, with the show written
to include the toys, as advertising for the merchandise. The first major example of this was
the TV show "He-man and the Masters of the Universe," in the early 1980s, but this practice
has been common in children's broadcasting ever since.
Sometimes merchandising from a television show can grow far beyond the original show,
even lasting decades after the show has largely disappeared from popularity. In other cases,
large amounts of merchandise can be generated from a pitifully small amount of source
material (Mashimaro).
The most common adult-oriented merchandising is that related to professional sports

teams (and their players).
Sometimes a brand of non-media products can achieve enough recognition and respect that
simply putting its name or images on a completely unrelated item can sell that item. An
example would be Harley-Davidson branded clothing.
Yet another path official merchandising follows sometimes is the prop replica market. (A
prop replica is a collectible recreation of a movie, television, or novel prop that is intended
to accurately recreate the item as it appeared in the original media.) Mainly focused on fan-
made articles, prop replicas are becoming more and more famous as users tend to collect
those pieces of movie memorabilia that med/big companies do not mass-produce, reaching
even higher levels of quality than certain 'licensed' replicas.
IN Buying House/Export House In an export house merchandising is a combination of
business and technical aspects.
Senior merchandisers have responsibilities of product development and co-coordinating

with the buyer, regarding the garment styles, quality and price point that meet buyer’s
expectations. They have to negotiate with the buyers on pricing, workout delivery schedules
and investigate for future buyers.
Junior merchandisers have the responsibility of handling the paper work and follow-ups,
detailing with buyers, overseas communications etc. Once the order is placed it is their duty
to complete the necessary paper work, provide break down information to all other
departments and get samples approved for fit, colour and quality.
Overall, we can say that merchandising is the core department of the entire export industry.
Fashion Merchandising entails the connection of different fashions to related consumers.

Fashion merchandising involves ensuring that the merchandise appeals to the targeted
consumer and anticipating the future trends that consumer will follow.
Fashion merchandising is integration of business and style, so in addition to having a flair

for style and knowledge of textiles, business skills and market techniques are also needed
for a good fashion merchandiser.
The key to fashion merchandising is to promote and obtain the goods. This can involve going
to national and international fashion events, buying fashions and negotiating with
merchants, manufacturers, retailers and designers.
Fashion designing and fashion merchandising are two related but different fields. Both
require a deep knowledge of fashion trends. However, fashion designing focuses primarily
on creating clothes that consumers want to buy, while fashion merchandising focuses
primarily on getting consumers to buy those clothes.
IN RETAIL , merchandising means maximizing merchandise sales using product design,

selection, packaging, pricing, and display that stimulates consumers to spend more. This
includes disciplines in pricing and discounting, physical presentation of products and
displays, and the decisions about which products should be presented to which customers
at what time.
DEFINITIONS BY MANAGEMENT EXPERTS
PAUL MAZUR (1927): Procuring merchandise to be resold to customers. These functions

were primarily performed by buyers.
P.H.Nystrom (1932): Careful planning, proper styling and production or selection and buying
followed by effective selling.
R.C.Kean (1987): Merchandising is the analysis and response to changes (transformations)

and processes (advances) which occur in the planning, negotiating, acquisitions and selling
of products/services from their inception to reception and use by target consumer.
Glock & Kunz (2000): Planning, developing and presenting product lines for identified target
markets with regards to pricing, assorting, styling and timing.
Ernest H. Risch: Retail Merchandising is a management system of strategic planning and

tactical control directed towards acquisitions and division of a large quantity of merchandise
into smaller assortments with the objective of its profitable distribution to the retail
consumer.
David Gilbert: Merchandising is the planning &implementation of the acquisitions, and

handling &monitoring of merchandise categories for an identified retail organization.
Key Points of David Gilberts Definition- (Roles & Objectives of Retail Merchandiser)
Planning: 1.Forward visualization in terms of changing taste and consumption patterns and
different market segments on the basis of age, gender etc., and 2. Collecting and analyzing
store level data.
Implementation: Effective implementation of plans.
Acquisitions: Procurement of material from wholesalers, manufacturers, in house

production, S&R basis, consignment basis etc.
Handling: Merchandising needs to be handled in an appropriate way to ensure that it is sold

in perfect condition.
Monitoring: As buying is an investment decision, entire merchandise operation needs to be

monitored to ensure adequate returns.
Bette K Tepper: Merchandising comprises of having right merchandise in the right place in
right quantities at the right prices at the right time.
The Right Merchandising Blend
• Right Merchandise: Keeping in mind consumer needs, tracking consumer purchasing

patterns, being aware of changes in fashion and tastes and introducing new
products.
• Right time: Stocks should be managed so that the product offer reflects the
requirement of customers at any particular time.
• Right Quantity: Retailer must neither run out of stock nor tie up capital and space in
excess stock. Too much stock may also result in reduction in prices to clear the
dead/slow moving stock leading to reduction in profits.
• Right Place: Merchandise must be procured keeping in mind the size and location of
store, profile of customers, logistical concerns etc.
• Right Price: Sales price must also be kept in mind while making a purchase decision.
For e.g. smaller margin for fast moving /bulk items, larger margin on less frequently
sold products, price level the customer is willing to pay etc.
Difference between buying and merchandising: During the 1920s, Paul Mazur, a New
York investment banker, worked with the National Retail Dry Goods Association to develop
a model organization for department stores. The structure that he suggested consisted of
four functional divisions: merchandising, publicity and promotion, store operations, and
finance and control|. Even present day retail organizations continue to follow the basic
Mazur structure.
Later on, because of the importance of employee recruitment and training, compensation
programmes, labour laws, and unions, retailers modified the Mazur four-function model to
include personnel or human resources as a fifth function.
Since merchandising is the key activity in retailing therefore in USA, the role of a
merchandiser is quite broad ranging from planning the type and amount of buy, to their
display in store, to their final marketing, while buyer is the person who actually goes out to
different resources with a view to buy their products to be sold in the store.
In UK on the other hand, buying is perceived as central role and merchandising as a

department parallel to buying largely performing staff (advisory) functions.
In general, the job description for both these profiles differs from company to company and
has large overlapping areas and therefore these terms are used interchangeably throughout
the retail industry.
Unit-1 Review Questions
1. Define and discuss the definitions of retail merchandising as given by various

management experts.
2. Retail Merchandising comprises of having right merchandise in the right place in right quantities
at the right prices at the right time. Elaborate!
3. Discuss meaning of merchandising in the contexts of marketing, retail, and supply chain.
4. Discuss meaning of merchandising in the contexts of fashion, retail, and export house.
5. Differentiate between buying and merchandising. Also elaborate how a retail

merchandiser can impact the society.
Unit-2 Model of retail Merchandising Department
MERCHANDISING STRUCTURE
GENERAL MERCHANDISING MANAGER
DIVISIONAL MERCHANDISING MANAGER
BUYER------------PURCHASE AGENT
STOCK PEOPLE SALE PEOPLE
Roles & Responsibilities of Merchandising Dept.-According to position in hierarchy
General Merchandising Manager:
• Developing an overall merchandising budget
• Establishing the store’s merchandise direction (Product lines, price points, and
quality).
• Determining budgetary allocations for Divisional Merchandising Manager.
• Carrying out top management’s merchandising policies.
• Regular meetings with the merchandising team and market specialists.
• Visits to the market place, trade expositions and showroom

Divisional Merchandising manager
• Assisting and advising the General Merchandising Manager.
• Responsible for a particular merchandising line. For e.g. Divisional Merchandising

manager for children' wear would supervise the buyers who purchase merchandise
such as baby clothes, clothes for newborns, clothes for boys, clothes for girls,
accessories etc.
• Distributing the division’s budget to the buyer.
• Coordinating the efforts of buyers to ensure that the overall merchandising direction
decided by top management is followed.
• Advising buyers on merchandise acquisitions.
Buyer
• Buyers are mainly responsible for developing a product offer that meets customer’s
expectations of value and quality.
• Buyers negotiate a price, order the goods, agree on a delivery date, complete all the
paper work and keep in touch with the suppliers to ensure that goods arrive on time.
• They are also responsible for vendor selection, development, and management.
• They maintain regular contact with sales force and interact with shoppers.
Central Buyers: Work for chain stores and mail order houses and generally located at head
quarters
Associate or junior buyers: Usually buy specific items for a department or division of a large
organisation which is too large to be served by a single buyer. She/he assumes responsibility
for specified purchases but need to coordinate with head buyer.
Purchase agents: They focus on routine purchase tasks specializing in commodities or a

group of commodities. They usually track market conditions, price trends, and future
markets.
Roles and responsibilities of merchandisers according to store formats
Buying for a single independent store
• Coordinating the purchasing of various products required for the store.
• Writing Orders.
• Handling special orders as and when they are received.
• Deciding about merchandise returns.
• Pricing of merchandise.
• Planning sales promotion and publicity.
Buying for a chain store
• Buyers should be specialist for specific product lines or specific regions.
• S/he should be aware of peculiarities of different merchandise and type of

merchandise needed for different markets.
Buying for non store retailers (Catalogues, Direct mail, Home shopping, E-tailing)
• S/he should be aware of peculiarities of large geographic area as merchandise orders

shall be received from a wide region.
• Very advance planning is required as production of catalogue takes a long time.
• Uniqueness of product and competitiveness of price needs to be ensured to

counterbalance the effect of touch and feel factor.
General Role and responsibilities of a Merchandiser
Planning, Directing, Coordinating, controlling
Planning
• Formulations of the policies for the area for which they are responsible.
• Estimating consumer demands and impact of changes in retail environment.
• Forecasting sales for the period and translating them into inventory levels
Directing
• Guiding and training the buyer. For e.g.to, take additional discounts from suppliers
for goods not doing well in store, Selecting vendors, Merchandise lines that can be
developed,
• Inspiring commitment and extracting performance
Coordinating
• Coordinating with retail buyers in terms of how well merchandise fits in with the
store image and other products being bought by other buyers.
• working closely with visual display staff and department managers to decide how
goods should be displayed to attract best customer attraction, setting up sales
promotion and advertising campaigns(In some organisations this role is separately
carried out by Visual Merchandisers).
Controlling
• Evaluating buyers 'performance on the basis of net sales, sales per square foot,
maintained markup percentages, stock turnover and inventory control.
Societal Impact of retail merchandiser
 Increases the number of choices. Larger number of choices available transforms the
society into a “Throw-away” society”
 The products should not encourage “wrong lifestyle habits”
• Environmental considerations should be in balance with profit objectives of the

company
The Key Merchandising Competencies required for a merchandiser/buyer
 Effective communicator
 Appropriate interpersonal skills
 Advanced numerical capabilities (To work out budgets, understand sales
figures, prices, markups etc.)
 Ability to translate customer’s wants into specific products.
 Ability to work in a team
 Itinerant-Should love traveling.
 Awareness of general economic conditions to anticipate consumer buying
patterns
 Resourcefulness, Good judgment, self-confidence, Quick decisions, Ability to
take risk and marketing skills.
1. What are key competencies required for a merchandiser
2. Draw the flow chart of merchandising structure of a typical retail organization and
discuss the role of each functionary in it.
3. Discuss role and responsibilities of General Merchandising Manager, Divisional

merchandising manager and buyer in a retail organisation.
4. Discuss general roles and responsibilities of a retail merchandiser.
5. Write short notes on (a) Purchase Agents and (b) Prop replica.
Unit-3 General Roles and Responsibilities of a Retail
Merchandiser
Roles & Responsibilities
Line Functions: These are mainstream activities fundamental to an organisation’s mission. In
Retail context they include Merchandise buying, selling, pricing and store operations.
Staff functions: These are not directly involved in merchandising department’s mainstream
activities but support or advise line functions. For example fashion forecasting, comparison
shopping, vendor bill verification lab testing, quality control etc.
Separation of buying and Selling Paul Mazure identified buying and selling as related
activities and proposed merchandising functions to include (1) Merchandise procurement
and (2) store level activities like customer service and Stock keeping. As single store
operations evolved into multi unit chains, these functions became separated. Buying
became a corporate level function while merchandise presentation and inventory
management became a store level function.
Contemporary Buyer’s functions Corporate Functions & Field Functions
Corporate Functions These functions are performed within a company’s central

organisation or corporate office. Such functions include –Buying, Finance, and Sales
Promotion etc.
Field Functions: These are the functions which are performed in a remote or satellite
operation like stores or vendors locations.
Main Functions of buyers
• Buying
• Planning
• Budgeting
• Pricing
• Distribution
• Product Development
• Developing Private level Programme
• Disseminating Information
• Advertising, Special Events Etc.
Buying functions include composing assortments that will appeal to target customers in
terms of price, quality and individual taste, obtaining best possible goods at lowest possible
price, and Pricing them low enough to be competitive with other retailers yet high enough
to meet organization’s profit goals.
Buying functions for Fashion goods involve higher risk than for basic goods such as Hosiery
as it is based on uncertain predictions of consumer acceptance of new styles.
Buying for basic goods are often just reorders of historically best selling brands, styles,
colours and sizes.
Planning involves projecting sales and inventory based on an analysis of sales history,
current market trends, and performance objectives of the retailer. This requires determining
what should be bought, deciding on the quantity of each item, selecting resources and
determining the appropriate time for the merchandise to be made available to customers.
Planning is a statistical function requiring analytical aptitude and ability to make

multidimensional decisions on part of buyer.
Distribution (Allocation) Allocating arriving shipments of merchandise to individual stores

based on each store’s capacity, current sales trends and inventory levels and correcting
stock imbalances in store.
Product Development: Determining the product to be developed internally with store’s

private label to inculcate some uniqueness to their product offer. This requires the buyer to
determine what their customers want and suggest the styles that might be created to be
included in inventories. This requires establishing specifications for the design, production
and packaging of goods. Contracting manufacturers or company owned factories to
manufacture the goods according to specifications. In very large organisations there might
be company owned factories that do their own manufacturing.
Need for developing private labels
Helps getting around the problem of competitor’s pricing.
Allows the store to stock goods that none of its competitors carries and therefore can’t be
comparison shopped.
Require very little selling or other promotional expenses for the manufacturer and therefore
available to retailer at more economical rates allowing higher than normal markup.
No manufacturer’s interference in merchandise returns, setting of retail prices and timing &
amount of markdowns.
Width and depth of private label
Department Stores and many traditional chain store organizations do not use private labels
extensively.
Many off price retailers incorporate pvt. Labels to some extent. They attract customers by
manufacturer’s brands while motivating them to buy some of their own labels.
Some stores carry entire inventory consisting of private labels. The store’s name and private
label it carries becomes one and same in this case.
Methods of Acquisitions
• Direct Outside Sources
• Resident Buying Offices
• Company Owned Production
Direct Outside Sources

National Manufacturers: They produce goods under their own labels as well as for retailer’s
private labels.
Advantages: As producers maintain good standards for their own products, the private label
assortments feature the same quality.
Private label Manufacturers: They deal exclusively in items produced for retailer’s private
labels and brands.
Advantage: They design the goods according to the retailer’s specifications coupled with
their own expertise and deliver the finished goods to retailer.
Resident Buying Office Acquisitions
They develop the product for the exclusive use of their clients within a geographical
location.
This type of acquisition generates exclusivity within a certain radius.
Very little effort is required by the retailer towards product development.
Especially beneficial for small retailers who are unable to develop their own programmes.
Company Owned Production
By eliminating profit margins of outside manufacturer’s and contractors , the costs are
reduced and can be passed on to customers resulting in greater profits.
Factories work exclusively for retailer and therefore able to tailor the products according to
their specific needs.
Better quality control can be ensured.
Retailing and manufacturing however require different expertise and initial as well as
running costs for company owned productions are high.
Buyer’s Role in Product Development
Traditionally buyers made their purchases from vendors who produced the merchandise
that best suited their (buyer’s) needs.
For buyers who work for retail organisations incorporating private labels, product
development and acquisition is also part of job.
Buyers are not designers who create the styles and models yet they provide their own
inputs to designers.
By virtue of their interaction with vendors as well as clientele , buyers know what market
has to offer and what customer needs require satisfaction.
Through regular scanning of manufacturer’s and designer’s lines ,they know what is being
offered in terms of price , style , fabrics and colours etc.
Buyers also take their clues from popular events such as films , stage shows , room settings
in a magazine etc.
Buyer must always be on a lookout for something exciting from which idea can be taken.
Many retail buyers and Store personnel have gone on to become Designers due to
knowledge gathered by them as buyers. For example, Parry Ellis-Designer from Store Buyer
and Ralph Lauren-Designer from Store Sales Person
Introducing a private label programme

Creating of separate departments in the store to feature the private line.
Interior and window visual presentations to dramatise the private labels.
Extensive advertising campaigns in a multimedia approach
Customer give aways such as carry bags, pens etc emblazoned with private label signatures.
Sales training for employees so that customer’s questions can be answered quickly and
satisfactorily.
Fashion shows and informal modeling of the item, shopping bags that display the new
labels.
Naming the private labels- The company name or Image builders
The Company name: Store brand or umbrella brand or Image builders: Using names that
are reminiscent of designer signatures, Exotic locations, regions that impart a particular
image, legendry personalities or sporty sounding labels or a particular era.
Buyers Role in planning Advertising

Advertising classifications: Promotional advertisements & Institutional advertisements
Promotional advertisements: Promotional advertisements are used to draw customer’s

attention to a particular style, a special sale or a particular designer’s offerings. Intention of
promotional advertising is to bring immediate attention to the product in the hope that it
will increase business.
Institutional advertisements: These ads concentrate on improving retailer’s image by

focusing on company services, association with charitable organisations, raising consumer
awareness on social issues etc. They do not bring immediate results or focus on a particular
buyer’s merchandise but they are long term investments.
Combination advertisements: They combine both the institutional and promotional

concepts. For example sales ads with national or environmental or social overtones are
released.
Cooperative Advertising: In this type of advertising vendor also contributes in retailer’s

advertising expenses. Vendor contribution is called allowance. Amount paid by vendor is
usually based on the size of purchase order. Motivation for purchase should however never
come from the size of allowance.
The Promotional Budget Apportioning the allocated funds for advertising and other
promotional Endeavour’s ensures that the budget lasts for the designated period as well as
covers all the outlets.
Disseminating information
Need: Store people who interface with retailers do not necessarily have the good
understanding of the product as they are more concerned with store operations. It is
therefore the buyer’s job to help the sales personnel understand the products displayed on
the selling floor.
Types of product information needed for dissemination
Styles: Advantages of a style like where and when are these appropriate for use, and their
potential for a long life are the information needed for efficient selling of the merchandise.
By explaining to the customer the rationale behind each styling, and how it will better serve
their fashion needs, a sale might be easier to be made.
Colour: The buyer should pass on information about how new colour offerings might be
incorporated into existing wardrobes , how the new style could be coordinated with old and
how these new colours might enhance the individual’s appearance.
Other information: Types of fabrics and fibers, Care, Quality, Operating techniques,
Servicing, Warrantees & Guarantees, Special power requirements and Adaptability under
different environments.
Communication techniques used by Buyers to reach retailers
Store Visits: During store visits store managers/associates are able to ask questions that
have been raised by customers. They are able to point to the items that need further
inclusion. As store level personnel's voices are also heard and their morale boosted.
Telephone: With more and more number of stores in a retail chain it has become difficult to
frequently visit individual stores in the chain. Telephone is quick and serves the need in case
of questions about reorders, availability of goods, Concerns with care of merchandise and
complaints about product performance. Telecalls however cannot answer queries about
specific items that need to be seen in order for a problem to be solved.
Fax: Enables the buyer to transmit images as well as photographs and drawings of
merchandise to the store personnel. It can be used round the clock without the intended
recipient being present at the same time.
E-mail: It is the quickest and efficient system for exchange of information and may be used
using as online service or in case of large retailers using in-house servers.
Bulletin Boards: Bulletin boards are placed at strategic locations like time clocks to
disseminate information like- tear sheets to inform the associates about the advertisement
released so that they can be ready for potential traffic. Information about temporary
markdowns, incentives that could increase the sales etc. is also displayed on bulletin boards.
Video conferencing: Buyer shows each item and discusses its merits. The store personnel
learn about the details of the goods, the fabric, unusual construction, methods for
laundering and cleaning, style importance to the season, and any other selling points that
will help answer potential questions from shoppers.
Store Level Functions
Special Events and visual merchandising
Visual Merchandising: Buyer’s role in visual merchandising is not only selecting the
merchandise that needs to be featured but also to provide guidelines for Store decor,
signage, and display fixtures, setting standards for presenting merchandise, developing
planograms or floor layouts. Designing new stores or renovating existing ones. Organizing
formal displays, deciding about placement of merchandise on the selling floor and overall
designing of the sales arena to augment the goods offered for sale. It also involves deciding
the lighting that focuses on the goods and signage that is strategically placed.
Department managers should also be properly schooled in the basics of visual presentations
so that they do not have to wait for visual team to visit in case immediate changes are
required.
Special Events: Promotional Events & Institutional Events

Promotional Events are special events used to sell specific merchandise by organizing
fashion shows, arranging special appearances by celebrities or demonstrations by vendor
representatives. Buyer is responsible for making contacts, and develops the promotional
concepts.
Institutional Events are not necessarily designed to promote specific merchandise but to
increase overall traffic and to promote the store’s image by generating customer interest.
For e.g. Festival window displays. Buyers do not play specific roles in the events but are
required to-ensure adequate inventory levels, decide about the Markdowns and arrange for
special holiday merchandise etc.
Maintaining Inventory Merchandiser needs to ensure the availability of stock to all the
target customers all the time in order to maintain store’s image. OTB, inventory turnover
and GMROI are some of the tools which help determine the inventory productivity.
Maintaining Assortment Variety needs to be wide enough to ensure sufficient choice to the
shopper and at the same time it should be focused enough to project a clear image of the
store and not to confuse and overwhelm the customer.
Evaluation yardsticks for Buyers: Buyers performance is evaluated in terms of sales,

inventory levels and ultimate margin results.
Sales: Sales performance of a buyer is evaluated In terms of money, in terms of units and in
terms of Sales per square foot.
Inventory Levels: Stock turnover (Number of times in a period the average amount of
inventory on hand is sold) and merchandise left in the inventory past the selling
period/selling season are some of the yardsticks on which buyer’s performance is judged.
Margin Results: Initial Markup, Maintained Markup and their contribution in Company’s
Profit goals are ultimate indicators of a buyer’s performance.
Unit-3 Review Question
1Discuss various factors considered for evaluating buyers.
2. Discuss various methods of acquisition of merchandise for Private label development.
3. Elaborate the need of disseminating information for a retail merchandiser. What type of
information is needed to be disseminated and what communication techniques can be used
to reach the retail operation staff?
4. Differentiate between line functions and staff functions of a merchandising department of

a retail organisation. Also write a note on key merchandising competencies.
5. Discuss the specific role of merchandiser in (a) planning, (b) buying, and (c) allocation.
6. Write a detailed note on buyer’s involvement on product development.
7. Discuss merchandiser’s role in planning special events and advertising.
Unit-4 Overview of Merchandise Management Process
Merchandise management is the process by which a retailer attempts to offer the right
quantity of the right product at the right time and place while meeting retail firm’s financial
goals. This involves planning, developing and presenting product lines with reference to
pricing, assorting, styling and timing according to Target Market.
Overview of Merchandise Management Process
Components of merchandise management
Merchandise management is the analysis, planning, procurement, handling, and control of

the merchandise investments of a retail operation
Merchandise analysis
Identifying the target segment in order to determining their needs prior to buy the required
merchandise
Merchandise Planning
Establishing objectives and devising plans for obtaining merchandise well in advance
Benefits of Planning
1. Enhances the possibility of right assortment of goods
2. Enhances the possibility of increased stock turns, thereby releasing important working
capital.
3. Provides more choice to the customer
4. Reduces the possibility of a stock out
Process of Planning: It involves Developing sales forecast and merchandise budgeting.
Developing Sales Forecast
Objective :
How much of each product needs to be purchased.
Should new products be added to merchandise assortment.
What price should be charged for the merchandise?
Process of Sales forecast:
Reviewing past sales
Analyzing changes in economic conditions
Analyzing changes in sales potential
Analyzing changes in marketing strategies of competitors
Category Management Planning: Categories are defined on the basis on which customers
buy rather than the basis on which merchandisers buy. For e.g. aspects of products’ end-
use, products those are substitutable or products those are complimentary may constitute a
category and not the expertise of individual merchandiser.
Within a category, merchandise is assigned subcategory role for e.g.
• Traffic Builders: Products with high market share
• Transaction builders: Add on types or impulsive purchase items.
• Cash generators: Popular items with high margin.
• Image creators: Designer names that impart prestige.
• Excitement creators: Fashion or fad items.
Information sources for accurate merchandise planning:
For scientific planning, information has to be collected from diversified sources and then
integrated into cohesive plans. These sources can be classified as internal and external.
Internal Sources: Information related to past sales history, current sales trends and
inventory status can be obtained from various internal resources like POS data, Inventory
records and similar MIS records.
External Sources: Information related to the competition, market trends and fashion trends
comes from external sources only. Some of these external information sources can be as
follows-
General news papers and magazines: Content of newspapers and magazines provides an
insight into the tastes, preferences, lifestyles as well as the thought process of specific
market segments as these publications by and large cater to well defined market niches like
career women, kids, housewives or students etc. Women’s era, Stardust, fashion planet,
cosmopolitan, health magazines are a few examples.
Trade Journals: They carry industry specific information on major industry players, new
products or trade legislations related to industry. Even the advertisements carried by them
provide an insight about vendors, trade fares and trade shows etc. They also carry features
of use to retailers. Retailer, Images Retail, Harper’s Bazaar, VMSD, VMRD, Point of purchase,
inside fashion etc. are a few examples.
Trade Associations: Trade associations like AIMA, Retail Association of India etc. promote
goodwill, conduct researches, organise trade shows, sponsor conferences and publish
newsletters.
Research agencies, consultants and academic institutions are other external sources of
information.
Merchandise Budgeting: Financial management tool used to plan and control the total
amount (in dollars) of inventory carried in stock at any time. It determines how much a
retailer should invest in inventory during a specified period. Merchandise budget is a
financial plan that indicates how much to invest in product inventories. It is also a financial
tool for planning and controlling merchandise investment.
It involves Identifying planned sales, reductions, Merchandise to receive for a selling period.
They constitute primary form of planning closer to the top of organizational pyramid.
Merchandising budget consists of five parts-
Projected Sales: How much of each product is expected to be sold-Department wise,

division wise or store wise.
Inventory Plan: How much inventory or stock is needed to support such sales plan.
Estimated Reductions: The planned reductions needed to be made in case the merchandise
does not sell as expected.
Estimated Purchases: The quantity of each product that needs to be procured from the
market.
Estimated Gross Margins: The gross margins that the department ,division or store
contributes to the overall profitability of the company.
Procurement and handling-managing merchandise mix
NOTE: Merchandise Budget controls dollars; Merchandise Mix controls product units
Merchandise Mix: Merchandise mix represents the full range of mixture of products, a
retailer offers to its target customers.
Components of Merchandise Mix:
Merchandise Variety
It is the number of different product lines that a retailer stocks in store
Merchandise Assortment
It is the number of different product items within a particular product line.
Merchandise Support
It deals with the planning and control of the number of the units the retailer should keep in
stock to meet the expected sales for a particular product.
Merchandise Control:
Checking how well the performance guidelines established during planning stage are being
followed.
Designing policies and procedures to determine whether the stated objectives or goals have
been achieved. These objectives or goals range from the corporate strategic objectives to
micro level objectives like merchandise assortment, stocking and reorder.
1. What do you understand by various components of merchandise mix? Discuss in

detail along with suitable examples.
2. What do you understand by Merchandise budgeting? Discuss five parts of a

merchandise budget.
3. What is the objective of developing a sales forecast and what is the process thereof.
4. Write a detailed note on merchandise planning.
5. Name and discuss various components of merchandise management.
6. Write a detailed note on Information sources for accurate merchandise planning.
Unit-5 Merchandise Mix Management
Merchandising Mix is the complete merchandise on offer by a retailer. Retail

merchandising requires management of the merchandise mix. Developing the merchandise
mix allows the retailer to segment the market and appeal to a select group of consumers.
The components of the merchandise mix
 Merchandise Variety (Number of product lines)
 Merchandise Assortment (Number of product items)
 Merchandise Support (Number of product units)
Merchandise mix management involves
1. Planning & Controlling Merchandise Variety
2. Planning & Controlling Merchandise Assortment/Support
3. Planning Merchandise Mix Strategies
Planning Merchandise Variety Involves Planning And Controlling Product Lines.
Retailers use following factors to evaluate product lines-
The compatibility among product lines.
Product substitutes
Product complements
unrelated products
The physical attributes of each product line.
Product bulk
Product standardization
Product service levels
Product selling methods
The product lines’ potential profitability.
Direct and indirect contribution to profitability
Calculations of gross margin %
The role branding plays in the success of the product line.
How brands can distinguish a retailer from competitors.

How brands can build store loyalty.
the advantages and disadvantages of offering different types of brands – no
names, vendor brands, store brands (private labels) and licensed
merchandise
The age of each product within the product lifecycle

What stage a product is in to judge future sales potential
The number of products offered at different stages
The fashionable nature of each product line.
Use of unique designer fashions as part of the store’s strategy
The above average risk of fashion merchandise ( But also note: high margin
items with above average profitability)
The market appropriateness of each product line
How well the product matches consumption patterns and buying needs of targeted
consumers.
The relative advantage, affinity, trialability, observability, and complexity of new product
introductions.
Market trends– provide products the market wants.
The impact of lifestyle on product line acceptance.
Targeted customers’ activities, interests, and opinions
The match between consumers’ lifestyle and retailer’s image
Usefulness of trade shows to identify product lines for targeted consumers’ lifestyles
The competitive threat facing each product
Competitive conditions under which the product line is available – intensive, selective or
exclusive distribution
Is the product line available to direct (intra type) competitors or indirect (inter type)
competitors, or both
The conditions under which each product line will be procurable
Availability and reliability of various suppliers

Terms and conditions under which the product will be made available
Controlling merchandise variety is an art and a science. There are no rules for what should
be included in the merchandise mix and what should be excluded. However two useful
management methods used are-
I. Category Management: each product managed as a business unit at the

store level
II. ABC Analysis: each product line is ranked based on performance levels
Planning merchandise assortment and support
While organizing the merchandise mix as to the number of different product lines carried,
retailer must decide on Brands, Sizes, Colors, Material, Style, & Price points. Objective is to
ensure that product choice meets targeted consumer needs
Retailer must also carefully plan the number of units to have on hand to meet the expected
sales for the brand, size, and color combinations.
Retailer must develop merchandise lists like-
Basic Stock List (staple items)
Model Stock List (fashion items)
Never out List (key items and best sellers)
Controlling merchandise assortment and support
Involves monitoring and adjusting the types of product lines that are added and dropped
from the merchandise mix
Two widely used methods to control assortment and support:

1. Inventory turnover: rate at which the retailer depletes and replenishes stock
2. Open-to-buy: amount of new merchandise a retailer can buy during a specific time period
without exceeding planned purchases for the period.
3. GMROI
1. What do you understand by various components of merchandise mix? Discuss in

detail along with suitable examples.
2. Write a detailed note on factors used by a retailer to evaluate various product lines
while planning merchandise variety.
3. What do you understand by a balanced assortment? What factors should be kept in

mind while taking assortment planning decisions?
4. Write a short note on Planning and controlling merchandise assortment and

support.
5. Name two methods of controlling merchandise variety
Unit-6 Merchandise Mix Strategies
Managing Merchandising Assortment
An assortment is the selection of merchandise; a retailer carries at a particular time. It

includes both- the breadth of product categories and the variety within each category.
Most critical merchandising challenge: Having on demand, the type of merchandise in the
form of S K U, sought by a customer at a particular time.
Planning Assortment
Balanced Assortment: A balanced assortment is the one that has a well-planned variety of
colors, styles, and sizes for special appeal to a specific market with a minimum investment in
inventory.
Factors influencing assortment-planning decisions
Adequate variety to attract customer and inventory to prevent stock outs;
Minimum investment in slow moving stock as well as in total inventory
Maximum gross margin, return on inventory and stock turn.
Category management is a practice of classifying the assortment into categories based on

consumer needs. Product assortment is determined from customer’s perspective such as
product forms, price options, sizes, and brands and store’s perspective like customer flow,
display, and stock filling. For e.g. some pharmacists define the category according to
manufacturer whereas others alphabetically by the name of medicine.
Merchandise Mix Strategies
Assortment Dimensions
Width: Assortment width refers to the number of distinct goods or service categories
(product lines), a retailer carries.
Depth: Assortment depth refers to the variety within a goods or service category.
Consistency: Consistency refers to the compatibility of product lines in terms of consumer

purchasing habits and end use.
Basic Assortment Strategies

A firm’s assortment strategy is formulated By using a mix of various assortment dimensions.
Following strategies are possible:
Wide and Deep
Wide and shallow
Narrow and Deep
Narrow and Shallow
Wide and Deep

Many goods and service categories with large assortment in each category
Example: Full-line Department Stores
Advantages:
One stop shop.
Full selection of items
High level of customer traffic
High level of customer loyalty
No disappointed customers
Disadvantages:
Complex inventory management
No specialized image
Low stock turns
Large number of non-saleable goods
Information overload for customers
Wide and Shallow

Many goods and service categories but a limited assortment in each category .
Example: Variety Stores, General Stores, Discount Stores
Advantages:
One stop shopping
High level of customer traffic
Emphasis on convenience shopper
Less costly than wide and deep
Disadvantages:
Low variety within each product line

Weak image
Many items with low turnover
Reduced customer loyalty
Disappointed customers
Narrow and Deep
Few goods/Service categories and a large assortment in each category.
Example: Specialty Stores
Advantages:
Specialised image
Good choice for customers within each category
Customer loyalty
No disappointed customers
Less costly in comparison to wide and deep
Disadvantages:
Too much emphasis on any one category
No one stop shopping
Susceptible to trends/cycles
Little or no scrambled merchandising
Narrow and Shallow

few goods/Services categories and limited assignment in each category .
Example: Vending machines, Newsstands, Door-to-door
Advantages:
Aimed at convenience customers
Least costly
High Stock turn
Disadvantages:
No one stop shopping
Disappointed customers
Weak image
Limited customer loyalty
Little or no scrambled merchandising
Misc. Terms Related To Assortment Strategies
Scrambled merchandising: Unrelated items added to generate more revenue and lift profit
margins (Like florist carrying umbrella or Cyber café offering Cold drinks)
Complementary goods and services: Retailer sells related offerings along with basic items.
For e.g. Cassettes along with Stereos.
Substitute goods and services: Retailer keeps competing brands of a product. In this case,
sales may keep shifting from one brand to other but have little or no impact on overall sales
Brand Mix A mixture of different types of brands included in merchandise mix of a retailer
like - Manufacturer’s Brands, Private labels/Store Brands and Generic Brands.
Manufacturer’s Brands
Advantages:
Produced and controlled by manufacturers
Pre-sold –Supported by manufacturer’s advertising.
Provides credibility to retailer.
Advantageous for Small Retailer.
Disadvantages: Low margins for retailer.
Private labels/Store Brands : Pantaloon -Bare, Honey, Ajile, UMM,Rig, Biba,Anokhi , West
Side-Nuon
Advantages:
More profits for retailer;
No competition;
Less expensive to customers;
Leads to customer loyalty.
Disadvantages:
Retailer has to: line up suppliers, Arrange for warehousing, Bear marketing expenses and
absorb losses from unsold items
Generic Brands
Product’s generic name is used as brands. For e.g. Basmati Rice, Battery Water, and
Eucalyptus oil etc.
1. Discuss various merchandise mix strategies used by retailers along with the
advantages, disadvantages, and examples of each.
2. What do you understand by brand mix used by a retailer? Discuss advantages and
disadvantages of keeping different type of brands.
3. Discuss various advantages and disadvantages of including manufacturer’s brands in

brand mix of a retailer.
4. Write short notes on Scrambled merchandising; Complementary goods and services

and Substitute goods and services
5. Discuss three assortment dimensions for retail merchandise mix.
6. Write a detailed note on factors used by a retailer to evaluate various product lines
while planning merchandise variety.
7. What do you understand by a balanced assortment? What factors should be kept in

mind while taking assortment planning decisions?
Unit-7 Classification of Merchandise
Classifying Merchandise
Classifying merchandise is the process of arranging the merchandise mix into groups based
on Criteria of end use like Usage, Quality, and Price etc. Classifying merchandise helps in
organizing many unique pieces of merchandise into manageable groups.
As companies expand, maintaining a comprehensive view of the business becomes important to

ensure the efficiency and success of their operations.
Benefits of Merchandise Classification
An organization with well-structured merchandise classification has a fuller view of its

products across multiple sectors and is able to analyze data in a variety of ways suitable to
its business needs.
A standardized merchandise classification allows similar items across different businesses to

be grouped logically. This allows a retailer to view, evaluate and report on data at different
aggregate levels and with higher accuracy not only within an individual business, but across
multiple business lines at an overall enterprise level.
The benefits of such an approach include better performance visibility, understanding of

consumer demand, and more effective merchandise and sales planning.
The benefits continue down the supply chain and are reflected in better integration with
supply chain partners, and improved coordination between retail planning and production,
which in turn leads to a reduction in production costs and inventory requirements.
Standardization enforces data integrity, allowing data governance to be addressed at an

enterprise level.
Finally, it supports continuous business growth and accommodates moving into other
product lines as the business expands.
Through development of common definitions, terminology, nomenclature and structures,

an enterprise-wide standardization approach to merchandise classification becomes a key
element in driving successful planning, analytical and execution capabilities at a retailer.
The Concept:
The overall concept can be broken down into three elements, namely the merchandise
hierarchy, product definition, and alternate hierarchies, where an enterprise-wide
merchandise hierarchy serves as the primary product hierarchy with attributes providing
product definition and enabling creation of alternate hierarchies that accommodate
additional channel or function needs.
Merchandise Hierarchy
The function of the merchandise hierarchy is to categorize products and is NOT intended to
describe product or classify organizational, production or design elements.
Merchandise hierarchy is multi-level with the highest level providing an overall enterprise
view and then narrowing down to families or classes of products, with the total number of
levels being determined based on specific business requirements and is the same
throughout the enterprise
It provides a common language and consistent codes at each hierarchical level and ensures
that merchandise systemically resides in one place and is grouped based on similar form and
format and common purpose and use.
Product Definition
Merchandise hierarchy categorizes product while style, SKU and attributes are used to
define product.
Style represents a logical grouping of like SKUs based on similar business determined
attributes. When a style is created it must be assigned to the corresponding lowest level of
the hierarchy.
SKUs are product variations; each variation is an individual SKU attached to a style. This
means each Style will usually have more than one SKU assigned to it, but not the other way
around.
Attributes are data elements assigned to a product variation (SKU). They are used to
describe/define particular aspects of the SKU, such as physical or non-physical
characteristics of the item and can be used to cluster together similar products for planning
and reporting purposes
For example, a “V-neck T-shirt” can be a style, meaning that all V-neck T-shirts are grouped
under one style.
This can be further drilled down to a “Women’s White V-neck T-shirt Size XL,” which
represents an SKU.
“V-neck T-shirt” style can be combined with gender attributes “women’s” and a report can
be produced showing sales or other information for all women’s V-neck T-shirts.
Within the organization, attributes can be further grouped by different types depending on
the need of the business. For example, a company that has multiple lines of business can
develop groups of attributes for each of its lines as well as a group that would apply across
all lines of business (enterprise attributes). For example, in the business that deals with
apparel and personal care lines, “fragrance” can be an attribute that is only applicable to its
personal care line, while ‘gender’ can be an enterprise wide attribute.
Additionally, multiple organizational functions will require different attributes for their
specific needs (i.e., production information, including fabric types or logistics requiring
information on lead times or product dimensions). To make it easier for these functions to
view and maintain their relevant attributes, enterprise and business line-specific attributes
can be also grouped by function, e.g., production planning or merchandise planning groups.
Combining the hierarchy levels with additional attributes enables viewing, analysis and
planning of a subset of data and for the creation of customized reports.
Finally, a GTIN attribute (such as an EAN-8 or EAN-13 number printed on the bar code) is
the worldwide product numbering standard, which provides a common representation of
each SKU both inside and outside the organization. This structure enables a company to
incorporate global standards around attributes, achieving consistent data standards.
Alternate Hierarchies Similar to defining function or sector specific attributes, different

departments or business functions may also require their own hierarchies in order to
maintain flexibility or achieve a higher level of granularity within their specific functions. For
example, if “Tops” is a core hierarchy value in the system of record, but the planning system
requires a hierarchy level to view “Knit Tops,” “Knits” could be an attribute in the system of
planning.
Similar to merchandise hierarchy, alternate hierarchies must have their own rules
determined by the business and the values within each merchandise classification level
must remain consistent for each function.
Language of merchandising assortment
Total Merchandising Mix: Complete merchandise on offer by a retailer. For e.g. a men’s
specialty retailer may deal in goods meant for men.
Merchandising categories: Groups within overall merchandising mix. For e.g. Suits, casual
wear and accessories.
Merchandise classes: Merchandise categories are broken down into classes. For e.g. classes
within suits category may be single breasted, double breasted or formal.
Merchandise subclasses: Merchandise classes are further broken down into sub classes For
e.g. Sub classes for single breasted suits may be solids, stripes, and tweeds.
Merchandise group: Merchandise subclasses are further divided into groups .For e.g. Solid
colour suits may be divided into Small, medium and large sizes.
Assortment Factors: Groups are further described by assortment factors that together make
up an S K U. Colour, style and sizes may be some of the assortment factors.
SKU: A unique combination of assortment factors. For example, a small sized, striped, single
breasted men’s suit will form one SKU. An S K U or a stock keeping unit is determined by a
particular combination of style, size, and colour or the unique combination of assortment
factors embodied in a single product determines an S K U.
An S K U is therefore a unique piece of merchandise distinct from other similar merchandise
because of its particular combination of assortment factors
Units: Total volume per SKU .
NOTE: Terms described above reflect a simple system. A detailed classification system must
be learned in the context of a particular company because each term is unique to an
organization.
1. What do you understand by merchandise classification? Why is it necessary?
2. Describe the benefits of classifying merchandise.
3. Discuss three elements of concept of merchandise classification.
4. What criteria will you use for classifying the merchandise of a retailer into various
groups?
5. Give a typical classification structure of the merchandise of a retail store dealing in

men’s apparels.
Unit-8 Fashion Merchandising
Definition- Fashion is a form of expression widely accepted by a group of people over time.
Time period that defines the duration of it varies. Acceptance of fashion by one group is
independent of same by another. Fashion acceptance changes over time
Difference between style and fashion- Style refers to distinctive characteristics or designs
features. It’s product specific.
Trend means direction of the movement, degree of acceptance, duration, relation to other
trends of the fashion, can be a synonym for fashion. Like as follows: Strong or Key trend;
Emerging or Dying trend; Seasonal trend; Secondary or Background trend.
Trends are important with respect that they tell retail right time to buy, right time for
product promotion and right time for mark downs besides the product and its pricing,.
Overreacting to trends can be more devastating than not reacting to them at all.
Trends cannot be just limited to apparel industry, but they can expand their scope to overall
lifestyle retailing.
Some trends are short lived, for example metro sexual trends.
Trends are numerous as are the products associated with them.
Fashion Life cycle
It defines evolution, culmination, and decline of fashion. The life cycle for different fashions
might vary It has four phases:
1. Introduction: During this stage fashion apparel is called “High Fashion”. Available
only at exclusive stores. Prices are high Promoted by “Fashion leaders” or “trend-
setters”
2. Growth: When is flooded by “knock offs”, the cheaper copies. Giving the fashion a
mass access, thus adopted by “fashion followers”.
3. Peak: when no new customer is being added. When sales plateau is neither
increasing nor decreasing.
4. Decline: Characterized by declining sales, when it’s taken up by “fashion laggards”.
Peak
Sales
Growth Decline
Intro
Time
Things can be fashionable only for a season depending on, its durability and replacement.
Fashions that targets the youth evolve and die quickly also.
Most of the fashions that appear on the fashion runways are styles that before becoming
the fashion die a gradual and early death.
Pre-peak Post-peak
Rate of Sales Incoming
Testing Out going
Passage of Time
Four types of fashion cycles - the flop, fad, ford and classic
A flop is a fashion cycle rejected by all consumer segments almost immediately. Only a few
fashion innovators try and quickly discard the fashion. A flop gains neither a significant level
nor duration of acceptance. They not only represent the financial loss of obsolete
merchandise, but they also tend to tarnish the retailer’s image as a fashion leader.
Fad is short lived fashion ( e.g. video games).It rises and falls quickly It may be termed as
miniature or minor fashion. Popular esp. amongst youth, it generates generous revenues for
retailers, who identify their emergence early. However fads purchased late will have to be
sold at drastic reduction.
A ford is a best seller in fashion merchandising. They are characterized by wide acceptance,
long term stability and stable demand. Usually are produced by many different
manufacturers in a variety of price lines.
Classic is a long enduring fashion. Whenever they change, the changes are very subtle. True
definition to the term can be “Time Less”. Traditional in approach, they mostly appeal to
customers with conventional outlook. At times these are not classified as fashion, as term
fashion implies change and classics seldom change. They often promoted as “investment
dressing”
Column2 Classic
Time
Trickle Theories (Explains the acceptance of fashion from one socio-economic group to
another)
Trickledown Theory:
Origin of these fashions is in upper society.
Lower economic groups imitate the fashions
Later become must haves for the masses
Trickle across Theory/ Diffusion:

Adopted across all socio economic groups
Takes into consideration the impact of mass- communication, computerized designs and
production capabilities, thus giving fashion the mass appeal the same look-alike product can
be available at Wills lifestyle and Big Bazaar with the difference in the quality.
Trickle up Theory/ Float phenomenon
When the fashion floats upward in the socio-economic group, e.g. ragged jeans
The Basic- Fashion Continuum
Basic Goods: Functional goods that change infrequently, generally necessities. They are
purchased on replacement basis as a necessity. While their display plays no major role, price
is a major factor.
Fashion Goods: Aesthetically appealing goods that change frequently, generally non-
necessities. Unique color, styling, texture entice customer to buy fashion goods. Their sales
are based on consumer’s desire for novelty and change. Way goods are packed or displayed
plays a major role.
Products can have both the characteristics which fall in the category that lies in between. (*
Purely basic- Body warmer in winters/ Purely fashion- Junk jewelry)
Transforming Basics into fashion (e.g. Basic canvas shoes now sold as sneakers)
Introducing new product features

Creating interesting styles, colors or fabrication
Colors being the least expensive change that can be brought to the product
Transformation results in increase in sales
At times retailers accelerate such transformations, e.g. men’s athletic shorts
Not every basic can be or is ready to be transformed.
The line between any fashions acceptance or rejection is a very thin one
Best rather safest way is to make something familiar look new
Influences on Fashion
Technological advances
Fashion is inextricably linked to economics, as in difficult economy fashion leans towards
basics
Reflects social trends
Entertainment industry a major influence on fashion, be it movies, television or print
medium
Popular people also influence fashion
1. Differentiate between trends, style and fashion.
2. Define “Fashion”. Also differentiate between fads and classics.
3. Explain the acceptance of fashion from one socio-economic group to another with the
help of Trickle theories.
4. Differentiate between Basic goods and fashion goods. How can a basic good be
transformed into fashion good. Explain along with an example.
5. Discuss various factors which influence the fashion trends in a society.
Unit-9 Stock Plan for Fashion Merchandise
Staple Merchandise
Only a quantitative assessment of quantity presently at hand and desired stock at the end of
the period is required since demand is predictable due to history of past sales and relatively
accurate sales forecasts.
Most merchandise at home improvement centers are staples.
Buying Fashion Merchandise

Buying for fashion merchandise is more of an art due to unpredictable demand; limited
sales history; limited selling period; only a few months of peak sale and difficulties in
forecasting Sales.
Forecasting Demand for Fashionable Merchandise
Merchandise Budget Plan

Merchandise Budget Plan is a plan for the financial aspects of a merchandise category. It
specifies how much money can be spent each month to achieve the sales, margin, inventory
turnover, and GMROI objectives.
It is however not a complete buying plan as it doesn’t indicate what specific SKUs to buy or
in what quantities.
Since the popularity of the styles of fashion merchandise at the beginning of season is
unknown, Initial orders have to placed with little or no sales information.
However for price-range and sizes buyer can use sale of past seasons.
Steps in Developing a Merchandise Budget Plan are as follows-

 Setting margin and inventory turn goals
 Seasonal sales forecast for category
 Breaking down sales forecast by month
 Planning reductions – markdowns, inventory loss
 Determinining stock needed to support forecasted sales
 Determinining “open to buy” for each money
Buying Fads
Fad items have got extremely popular acceptance. Good timing for fads may therefore sky-
rocket sales. They are however virtually impossible to predict as past sales information is of
little/no help in predicting quantity purchase decisions
Terms of Sale
Terms of sale can/cannot be rigidly set by vendors and lot of haggling can take place over
prices and other terms, esp. in case of middlemen and distributor.
Discounts, Advertisement Allowances, miscellaneous terms are also to be considered as
other terms of sales.
Discounts
 Trade Discount: Different trade discounts are offered to different type of customers
based on business classification of that customer like-another manufacturer, a
wholesaler, a retailer or sometimes an ultimate consumer.
 Quantity Discounts: Offered as an incentive for buyer to place larger orders.
However overbuying of an item can result in a markdown wiping of the benefits of
Quantity discount.
 Seasonal Discount: Seasonal products are offered on discount for buying prior to the
beginning of season. Buyer must assess his/her storage capacity as well as capital
requirements. Buyer must also guard against problems related to early purchase like
early selection of colour, price changes and OTB.
 Advertising Allowance: Vendors pay up to one half of the costs of retailer’s
advertisement for vendor’s products.
 Post Dating: Negotiating for additional period of time before bill becomes due and
still takes advantage of cash discount. This enables the retailer to sell some of the
merchandise before payments must be made.
 Cash Discounts :Reductions from the billed price for prompt payment
Special Buying Situations
In addition to buying of staples and fashion goods, other buying situations could be:
 Anniversary sales
 Festival promotions
 End of season closeouts
 Clearance Items
 Manufacturer/ supplier has a lot of goods that must be disposed of as sacrifice
because of financial pressures
 Money left after meeting regular requirements
 New and untried goods that a supplier is eager to place in store offering esp.
concessions
 Goods on consignment [title and ownership (and therefore investment in inventory)
do not pass to retailer until the goods are sold]
 Special orders [e.g. odd sizes, or bulky items sold by sample more than by inventory,
like; furniture]
Promotional Purchase
Special Sale and' Promotion Goods

Major sales events usually require special purchases at lower prices. Emphasis on sales
varies greatly from store to store (e.g. Wills lifestyle and Big Bazaar). Search for
manufacturers’ closeouts and other price concessions and buying opportunities is therefore
required.
Disadvantages
Does not always yield an overall sales gain (curtail the sale of regular priced items)
Odd lots of non-regular goods difficult to dispose of completely therefore leads to overstock
with no money left for regular goods
Job Lots and Distress Merchandise

These are offered by manufacturers toward the end of the season and often consist of
goods left over in broken or incomplete sizes, colors, and styles. However because of their
low price, they are generators of traffic.
Disadvantages
Clutter the inventory and tie up investment money to be spent on regular goods to avoid
stock outs
Consignment Goods
Sometimes the vendor may offer a retailer the inducement of not paying (and tying up
investment) until the goods are actually sold. This may be because the vendor is having
difficulty placing merchandise with retailers because it is new /unknown or many similar
goods are already on the market
Disadvantages
Selling efforts & space may be wasted if such goods have little customer appeal
Store’s reputation may suffer, in case of poor quality
Complex inventory management-counting unsold items & goods returned
Arrange for consignment to be shipped back to the manufacturer
Strong vendors with substantial consumer demand hardly resort to such concessions
Guaranteed Sales
Also known as memorandum terms, or memo buying, guaranteed sale is similar to
consignment arrangements. In this anything unsold or selling too slowly in the opinion of
the retailer can be returned to the vendor
Retailer however does take title or ownership when the goods are placed in stock, thereby
committing funds for inventory and assuming such risks as fire and flood damage.
Special-Orders
Merchandise having high unit value and many style, fabric, and color combinations, such as
furniture, require much of their buying through special orders
They can generate extra business as well as customer good will
Disadvantages
Buyers are generally reluctant to encourage special orders unless the customer virtually
insists.
Staff time required to process such orders and the extra handling and transportation charge
from the vendor make profits doubtful. These may also become the source of numerous
complaints and follow up efforts.
Specification Buying
Mostly large retailers, which have the market clout to motivate manufacturers to allocate
part of their production runs to special product, packaging, and brand demands, buy by
specification.
Specifications buying results not only in more attractive features and quality from the
consumer's viewpoint, but also in lower prices than comparable nationally advertised
brands
These are private brands which often carry a lower price tag. Customer loyalty is also more
assured, due to limited availability.
Disadvantages
For big retailer, if buyer miscalculates /is not sufficiently knowledgeable, a poorly
performing product carrying the retailer's own brand name can be a most negative result
Risks involved and non feasibility is more for small retailers unable to take on large quantity
commitments.
Basic stock list

Basic stock list is an assortment plan for staple merchandise that is continuously maintained
in stock, usually for a period of a year or more.
Basic stock is the minimum stock that should be maintained at all times. It protects the store
against stock contingencies. It is based on the assumption that there should always be a
basic inventory on hand that remains constant regardless of the rate of sales.
The basic stock method is recommended for departments with a high proportion of non
fashion merchandise and/or when stock turnover is six turns or less per year.
Model stock list

An assortment of fashion merchandise indicating in very general terms (product lines,
colors, and size distribution) what should be carried in a particular merchandise category.
Model stock list differs somewhat from the basic stock list in-
Vendor description is usually absent or abbreviated
Merchandise description is more generalized
Stock description is frequently more detailed, breaking down each season (quarter) into
desired stock levels at various times within the season; beginning of the season, seasonal
peak, and end of the season
Never-out list
Key items or best sellers listed separately from a model stock plan or basic stock list, or
especially identified on the basic stock list by colored stars or other suitable means. It is
sometimes referred to as a list of key items, checking-list item, or best-seller list.
1. What is the difference in buying philosophies of fashion merchandise vis-à-vis staple

merchandise? Also comment regarding buying fads
2. What do you understand by merchandise budget plan? Enumerate the steps

involved in preparing the same.
3. Discuss different types of discounts which may be negotiated as terms of sale.
4. What special buying situations may arise for a retail buyer other than routine
purchases? Write short notes on two of them.
5. Write short notes on (a) Basic Stock List, (b) Model Stock List and (c) Never-Out List.
Unit-10 Lifestyle Merchandising
Any promotional activity shaped around the interests, attitudes, opinions, and way of life
of consumers. Lifestyle retailing is retailing geared to people with a common lifestyle
The ability to draw specific consumer segments, are critical to the expansion of lifestyle merchandising .
An element of lifestyle merchandising is solutions merchandising,
where product is developed to satisfy the priorities of a target group.
Lifestyle reflects the overall manner in which people live and spend time and money.
Operationally it can be measured & described in two ways:
Products the person consumes and the Activities, Interests and Opinions.
Traditional Merchandising Vs Lifestyle Merchandising
Lifestyle Merchandising Traditional Merchandising
Product Driven
Customer's attitude and lifestyle driven
Assortment focused on a clearly defined Entrepreneur’s expertise in a particular product

niche / background in specific market
"These are our customers what can we

offer to them that fully represents the
lifestyle they aspire for" "This is what we sell who can we sell it to"
Growth is:
Growth is:
 Providing these customers wide
array of offering*  Expanding Customer base
 Infinite possible number of  Reaching a broader audience
categories  Finding more customers to sell to
 Most Directly by units per Most directly by transaction counts
transaction
Basket Size: virtual basket containing what each customer purchases in a single sale.
Merchandiser should attempt to maximize “basket size,” or “average transaction value” as
it is known in the language of financial analysts, as attracting add-on business from existing
customer traffic is easier than attracting new customers.
Tips for growing basket size:
1. Know what the top selling items on your shop floor are. Often you will have around
ten items accounting for more than half of all of your sales.
2. Use the space either side and around the top selling items to promote other
produces which customers buying the top selling items are likely to want. Change
these up sell items weekly.
3. Use your POS software to report on what is selling with want. This can help you
understand what products go with what products.
4. De clutter your sales counter and ensure that easily selected items are placed there
for customer purchase. Change these weekly. The best counter offers are those
which are quickly and easily understood and which appear to be discounted.
5. Promote upsell items inside the entrance to your store. Change these weekly.
6. Promote items at key traffic congregation points in your store. Change these weekly.
7. Educate your employees about basket size, where the business is at today and where
you want to take it. Give them the information necessary to making good business
decisions with and for you.
8. Run regular employee incentives to encourage your team to offer upsell
opportunities to customers. As burger chains found out many years ago, you can
often get the add-on sail by asking for it.
9. Talk to your suppliers, seeking out products which could work as up-sell
opportunities. Again, focus on products which are easily and quickly understood.
General life style measures include Customer characteristics such as:

Price consciousness
Child orientation
Compulsiveness as a housekeeper
Home orientation
Community orientation
Credit usage
Self-confidence
Opinion leadership
Innovativeness
Financial optimism
Product-specific life style measures are designed specifically for a given product class
Merchandising includes more than just grouping products by categories. It also includes providing
extensive product information and creating groups of products being used together.
E.g. Lady going for group tennis practice might need some quick-fix food, rather than preparing
something elaborate.
Instead of just selling products, it's better to sell complete solutions. For instance, combining napkins
from the linen department with napkin rings from the kitchen department creates an elegant accessory
combination that completes a place setting.
The same merchandising technique is applied in store windows in local malls. Clothing stores frequently have
displays that combine pants, shirts, and accessories to create an entire outfit.
There is a strong interrelation between stage in life cycle and life style.
Market conditions
The market appropriateness of each product line: How well the product matches consumption patterns and
buying needs of targeted consumers.
The impact of lifestyle on product line acceptance: Targeted customers’ activities, interests, and opinions and
the match between consumers’ lifestyle and retailer’s image.
The competitive threat facing each product.
Supplier consideration
The conditions under which each product line will be procurable: Availability and reliability of various suppliers
and Terms and conditions under which the product will be made available
Merchandising Assortment and variety
 Assortments are often wide and shallow rather than narrow and deep
 Lifestyle is the driver, and new items are the key to frequent visits and units per transaction
 Merchandise to be closely linked to the customer’s sense of identity, fashion driven
 Price is not a significant issue because customers aren’t merely buying merchandise, they’re
participating in the community
 To build a product line don’t offer everything, rather what customer has passion about
 Theme to be tried across some segments of business
 Remodeling- tie in the synergies of various products
 A themed assortment can encompass a comprehensive set of products organized to make selection
simple.
 Used mostly by specialty stores/ specific products
Merchandising Support
1. Store Ambience
 Defines the lifestyle, in its décor and ambiance
 Store is unique, distinctive and conceptual
 Carefully considered synergy of space, materials, textures, colors, sounds, and aromas meant to excite
the senses
 Consumers are shown how products are best utilized and often solutions are found for problems that a
customer wasn’t sure how to fix
2. Staff training
Sales persons are part of the group, in a profoundly sociological way
Extend the experience, with their knowledge, interest and enthusiasm, in the very way that
they engage their guests
Their dress, hair, manner, speech and vocabulary are an integral part of the experience, as are
the very embodiment of the lifestyle
They interact with customers as they would with intimates, for to be part of the lifestyle is
deeply personal
Importance of Life style Merchandising

 Aligns brands with consumer’s interests, needs, desires, and values
 Innovate and repackage existing offerings to fit the needs of new customers
 Lifestyle Merchandising includes social and cultural changes in group dynamics and purchasing
influences
 Understanding of Customer choice accelerates sale
Designed specifically for a given product class
Luxury goods Vs Necessity goods
In economics, a Luxury good is a good for which demand increases more than proportionally as income
rises, in contrast to a necessity good for which demand increases less than proportionally as income rises.
Lifestyle Retailing Vs Luxury Retailing
While the lifestyle retailing is the offering of merchandise which appeals to a group of
customers following a particular lifestyle, Luxury retailing is dealing with the highest end of
life style segmentation in terms of quality and price
1. Differentiate between traditional merchandising and lifestyle merchandising.
2. What do you understand by lifestyle merchandising? What customer characteristics you

will keep in mind while measuring general lifestyle of a population segment?
3. What type of merchandising support is required in terms of store ambience and staff
training in case of lifestyle merchandising?
4. How will you plan merchandise assortment and variety for life style merchandising.
5. What do you understand by basket size? How can basket size be increased?
Unit-11 Organizational Structure of Export Organization
BASIC INTRODUCTION
Merchandising in an export house is a process through which products are planned,

developed, executed and presented to buyer (Customer of export house). Merchandisers
have to negotiate with the buyers on pricing, workout delivery schedules and investigate for
future buyers. It also includes directing and overseeing the development of product lines
from start to finish. Thus in an export house, merchandising is a combination of business
and technical aspects. Overall we can say that merchandising is the core department of the
entire industry.
Merchandising activities
Communication with the buyer
After the head of the Export House, merchandiser is the first person who meets the buyer
and remains in the constant touch with him/her thereafter. It is one of the most important
functions performed by the merchandiser. The buyer contact has to be kept at both pre and
post shipment stages. From the time of initiating the contact to making the sale, then
procuring the orders, getting samples approved and following up on production, buyer
contact is maintained. It is because of his/her link with the buyer that the merchandiser is
synonymous as a buyer’s representative within the organization, and similarly to the buyer
he represents his own organization. Thus the success of an export organization largely
depends on the efficiency of the merchandiser’s ability to handle and maintain buyer
contact.
Co-coordinating pre development activities
Merchant get protos made in the sampling department and reviews it with the buyer. Once
request for the development sample is placed and the first patterns begins taking shape,
initial costing is done, to estimate the price of the selected item. To be able to carry out this
function successfully and efficiently a merchandiser needs to understand and know his
buyers requirements completely and thoroughly. The merchandiser must, therefore be
aware of the characteristics of the buyer and the end consumer from the point of view of
market segment, price points, age groups, fashion preferences. Apart from this, he/she
must also be able to gauge the seasonality of the product and therefore understand color
trends, style, silhouettes and fabric forecast. To be able to do this he/she requires having
thorough source market and product knowledge I order to be able to advice and update
the buyer on the latest developments and possibilities. Above all, through the entire
process of carrying out this function he/she has to constantly keep the commercial viability
of his product in perspective.
COSTING
The most important activity for the merchant is to estimate correctly and negotiate for the
cost of production before the buyer sent out its PO .During the pre development stage an
initial costing occurs to get an idea of the garment cost likely to be incurred per piece. These
cost include general raw material cost manufacturing cost washing cost markup cost etc.
Once the production sample is approved, final costing is done accurately using fabric
averages from the CAD, cost of trims etc. Costing agreement includes manufacturers cost
based on cost of the various raw materials used, and the operating cost of the company etc.
Some of the cost components are as follows-
Materials: fabric, lining, thread, trims
Labour: direct expenses, factory overheads, ware housing and transportation
Packing cost: tags, labels, hangers, pins, bags, cartons etc.
Overheads: sewing, administrative, financing and interest, returns and allowances
Trade discounts & Taxes
The merchant first calculates the net weight(weight of the area of pattern pcs + wastage+
collars+ pockets+ patches etc) and then the gross weight(net weight+ cost of trims+
threads+ labels etc) to reach the cost of raw materials. Other cost like those of markup etc.
are then added. The company itself normally standardizes these markups keeping in mind
the price competition in costing and the profit planning of the organization. At the same
time, it is necessary to bear in mind the buyer’s price point requirements and his (the
buyers) end consumer as well.
Order receiving
When the development samples are approved the buyer sends his purchase order. Purchase
order gives the firm the authority to seek out raw material for the production process.
Co-coordinating post development activities
Sampling for the first pre- production samples now begins. The buyer along with the
purchase order sends all details for his product in form of spec sheets. These are updated
whenever the samples are reviewed for changes. PP meeting occurs for perfecting the
styling and fit. The merchant gets the final patterns made from highly skilled pattern master
and sample garments are made for layout and fit approval from the buyer .This is the time
between a styles is accepted for the line and when a style is ready for the sewing floor
If the samples are not approved they are sent for corrections. When the buyer is satisfied
with fit and lay out, s/he sends grading instructions. Following the measurements specified
in the graded spec sheet, the CAD develops graded patterns and garments are stitched in all
sizes. This is called a size set, which contains all the assorted sizes of the ordered style. It is
sent for buyer’s appraisal for every size and if his requirement seems to be fulfilled, s/he
sends back a medium sample with an approval seal and a go ahead to start the bulk sample.
The sealed sample becomes the final pre production sample.
At every stage it is the responsibility of the merchant to get the fabric and the trims
arranged for all sample make-up as per the needs. He keeps in constant touch with the
buyer and communicates his instructions to the sampling and other departments. He
maintains the style package and updates it every time the buyer makes any changes.
Selling and booking of orders: Following the functions of product development and pricing
the next area of function for a merchandiser is the actual selling of a product range or
“getting the buyer to buy”. Buying meetings are held with the buyer either in the country of
origin of the products, or, on sales trips abroad. Participation in trade fairs, buyer- seller
meets and other marketing techniques are used to gain orders. Selling is also done through
various buying representations of the buyer within the country.
Production follow- up: - Once the orders are booked the merchandiser is required to follow-
up on production. Because of the level of interface between the buyer and the
merchandiser, the merchandiser is best equipped to instruct the production department
about the product requirement of the buyer. The merchandiser is also required to keep the
buyer up-to-date on the status and progress of his order through the production process
through weekly updates.
Quality control: - As the merchandisers interface with the buyer is frequent and ongoing, it
therefore becomes the merchandiser’s responsibility to ensure that the product meets with
the buyers quality requirements. The merchandiser is required to do random quality checks
on the merchandise at various stages of production. However, at all times he has to control
quality from a commercial viability angle.
Key requirements for export merchandising
Patience and interpersonal skills – Since one has to manage buyers/buying houses as well
as factories/various vendors and with no definite time schedule, this becomes a must.
Eye for detail – One small missing detail could lead to the cancellation of an order.
Cost management – Margins are low and it is reducing day by day. Hence, it is very
important to cut cost – this indirectly increases profit.
Time management – Late delivery means “air shipment”, and hence, additional cost. In the
case of Wal-Mart, they have a ship window (basically a week), after which the purchase
order (PO) automatically gets cancelled. There is no scope of negotiation.
Quality management – Poor quality means shipment reopening, rechecking, or even

cancellation.
Structure & Working of Merchandising Department
Marketing and merchandising team consists of merchandiser and marketing personnel

working under a profit control; head. Teams are formed according to the buyers they
handle.
Senior merchandisers have responsibilities of product development and co-coordinating

with the buyer regarding the garment styles that meet buyer’s expectations in regard to the
quality and price point.
Junior merchandisers have the responsibility of handling the paper work and follow-ups,
detailing with buyers, overseas communications etc. once the order is placed it is their duty
to complete the necessary paper work, provide break down information to all other
departments and get samples approved for fit colour and quality.
There are two types of merchandisers
Marketing merchandisers or Buyer Merchandisers: They act as a link between the buyer
and the manufacturer. Main functions of marketing merchandisers are Product
development, Costing and ordering.
They have the responsibility of ensuring that the product is developed as per the
requirements of the buyer. So in between they have the responsibility of sourcing, sampling
and communication with the buyer.
Production merchandisers: They are a link between production unit and buyer merchants.
They have the responsibility of ensuring that the production goes as per the schedule and as
per the requirements of main Buyer.
Main functions of production merchandisers are
o Product development
o Market and product analysis
o Selling the concept
o Confirming deliveries
o Designing and sampling
o Costing
o Arranging Raw material
o Flow monitoring
o Production follow ups
o Payment follow ups
Retail Export
1. Market Analysis- Target 1.Market analysis- End consumer of buyer

Market 2. Sourcing
2. Sourcing
1. Inventory management 1. Sample Development-Translating

2. Stronger Business sense customer needs &wants into viable
3. No option of course product options.
correction once order is 2.Stronger Product knowledge
placed. 3. Samples can be re developed if not
found up to the mark.
1. Discuss the main roles and responsibilities of a merchandiser working for an Export
House.
2. Discuss structure and working of merchandising department of an export house.
3. What key competencies an export merchandiser must possess in order to work

efficiently?
4. Discuss the functions of Marketing Merchandisers and Production Merchandisers in an

Export House.
5. Write detailed notes on Pre-development activities and Post development activities in an

export house.

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MINISTRY OF COMMERCE & INDUSTRY

INTEGRATED PROGRAMME IN RETAIL

PREPARED BY: N.B.LAL

FDDI SCHOOL OF RETAIL MANAGEMENT

UNIT TOPIC PAGE

Unit-1 Concepts of Merchandising 3

Unit-2 The Model of Retail Merchandiser 9

Unit-3 General Roles and Responsibilities of retail 14

Unit-4 Overview of merchandise management process 22

Unit-6 Merchandise Mix Strategies 31

Unit-7 Classification of merchandise 36

Unit-8 Fashion Merchandising 41

Unit-9 Sock Plan for fashion merchandise 46

Unit-10 Lifestyle Merchandising 51

Unit-11 Organizational Structure of Export Organization 56

MERCHANDISING: All the activities and processes related to proper management of

Merchandising, especially in connection with child-oriented films and TV shows, often

The most common adult-oriented merchandising is that related to professional sports

Senior merchandisers have responsibilities of product development and co-coordinating

Fashion Merchandising entails the connection of different fashions to related consumers.

Fashion merchandising is integration of business and style, so in addition to having a flair

IN RETAIL , merchandising means maximizing merchandise sales using product design,

DEFINITIONS BY MANAGEMENT EXPERTS

PAUL MAZUR (1927): Procuring merchandise to be resold to customers. These functions

R.C.Kean (1987): Merchandising is the analysis and response to changes (transformations)

Ernest H. Risch: Retail Merchandising is a management system of strategic planning and

David Gilbert: Merchandising is the planning &implementation of the acquisitions, and

Implementation: Effective implementation of plans.

Acquisitions: Procurement of material from wholesalers, manufacturers, in house

Handling: Merchandising needs to be handled in an appropriate way to ensure that it is sold

Monitoring: As buying is an investment decision, entire merchandise operation needs to be

• Right Merchandise: Keeping in mind consumer needs, tracking consumer purchasing

In UK on the other hand, buying is perceived as central role and merchandising as a

1. Define and discuss the definitions of retail merchandising as given by various

5. Differentiate between buying and merchandising. Also elaborate how a retail

GENERAL MERCHANDISING MANAGER

DIVISIONAL MERCHANDISING MANAGER

STOCK PEOPLE SALE PEOPLE

Roles & Responsibilities of Merchandising Dept.-According to position in hierarchy

General Merchandising Manager:

• Developing an overall merchandising budget

• Determining budgetary allocations for Divisional Merchandising Manager.

• Carrying out top management’s merchandising policies.

• Regular meetings with the merchandising team and market specialists.

• Visits to the market place, trade expositions and showroom

• Assisting and advising the General Merchandising Manager.

• Responsible for a particular merchandising line. For e.g. Divisional Merchandising

• Distributing the division’s budget to the buyer.

• Advising buyers on merchandise acquisitions.

Purchase agents: They focus on routine purchase tasks specializing in commodities or a

Roles and responsibilities of merchandisers according to store formats

• Coordinating the purchasing of various products required for the store.

• Handling special orders as and when they are received.

• Deciding about merchandise returns.

• Planning sales promotion and publicity.

Buying for a chain store

• Buyers should be specialist for specific product lines or specific regions.

• S/he should be aware of peculiarities of different merchandise and type of

• S/he should be aware of peculiarities of large geographic area as merchandise orders

• Very advance planning is required as production of catalogue takes a long time.

• Uniqueness of product and competitiveness of price needs to be ensured to

General Role and responsibilities of a Merchandiser

Planning, Directing, Coordinating, controlling

• Estimating consumer demands and impact of changes in retail environment.