Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

RETAIL MERCHANDISING
CONCEPT OF MERCHANDISING
American Marketing
Association has defined
merchandising as, ‘ the
planning involved in
marketing the right
merchandise at the right

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

place at the right time in
the right quantities at
the right price.’

The Seven Rights of Merchandising

CONCEPT OF MERCHANDISING

Merchandise Management can be termed as the:

 Analysis because retailers must be able to correctly identify
their customers before they can ascertain consumer desires
and their needs/requirements
 Planning is important because merchandise to be sold in

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

the future must be bought now
 Acquisition because the merchandise needs to be procured
from others
 Handling involves seeing that the merchandise is where it is
needed and in the proper condition to be sold
 Control as the function of merchandising involves spending
money for acquiring products
 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
EVOLUTION OF MERCHANDISING
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FACTORS AFFECTING THE
BUYING FUNCTION
 MERCHANDISER
ROLE AND RESPONSIBILITIES

 PLANNING
 Formulating Policies
 Forecasting Sales
 DIRECTING

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

 Guiding and Training Buyers
 COORDINATING
 Coordinating the Buying Effort
 CONTROLLING
 Assessing Buyer’s Performance
 MERCHANDISER
ROLE AND RESPONSIBILITIES

Divisional Merchandise Manager (DMM)

 Forecasting sales for the forthcoming budget
period

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 Translating the sales forecast into inventory levels
in terms of rupees
 Inspiring commitment and performance on the
part of the merchandisers and buyers
 Assessing merchandise and buyer’s performance
 BUYER
ROLE AND RESPONSIBILITIES

 Developing the merchandising strategies

 Planning and selecting merchandise assortments
 Vendor selection, development and management

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

 Pricing the merchandise to achieve the required
targets
 Inventory management
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CAREER PATH FOR
MERCHANDISING

Source: www.target.com accessed 16/02/11

FUNCTION OF BUYING FOR DIFFERENT
TYPES OF ORGANISATIONS

 Many a time the job of a buyer is likened to that of a

product manager in a consumer company
 Targets need to be achieved in terms of sales and profit
goals
 Strategies need to be developed keeping in mind the

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

specific customer profile for the merchandise
 Larger retailers provide more sophisticated merchandise
information systems that allow quick and efficient
responses to changes in the market
 Buyers in such an organisation have the authority and
responsibility for selection of merchandise for all the
stores
 BUYING FOR A
SINGLE/INDEPENDENT STORE

 Coordinating the purchasing for various products

required by the store
 Writing of orders
 Handling special orders as and when they arise

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

 Making decisions regarding merchandise returns
 Re-merchandising the store
 Taking decisions with respect to the pricing of the
product
 Planning and coordinating various promotional activities
and events and in store presentation of the merchandise
 Customer contact and selling
BUYING FOR A CHAIN STORE OR A
CHAIN OF DEPARTMENT STORES

 Merchandising in chain stores is characterised by:

 Central Buying Plans
 Central Merchandising Plans
 The store operates in more than one region and
therefore, has to serve the needs of a diverse consumer

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

market
 It is also necessary that the buyer completely understand
the type of products that are needed by the market that
the retailer is catering to
 If this does not happen it will result in overbuying or
under buying both of which affect the profitability of the
product and therefore the retailer
 BUYING FOR NON-STORE RETAILERS –
CATALOGS, DIRECT MAIL, HOME SHOPPING,
INTERNET RETAILING

 The mail order buyer needs to plan well in advance, as

the production of the catalogue takes a long time
 Buyers for an e-tail venture need to have a clear
understanding of the type of products that consumers

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

would buy on the net
 Very often in direct marketing or in e-tail ventures it is
the uniqueness of the product and a competitive price,
which make the difference
 Thus, the nature of the organisation is an important
factor affecting the function of merchandising
 METHODS OF BUYING

 COOPERATIVE BUYING

 CENTRALISED VS. DECENTRALISED BUYING

 BUYING COMMITTEE

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 RESIDENT BUYING OFFICES
 CONCEPT OF LIFESTYLE
MERCHANDISING
 The aware and knowledgeable consumer seeks products,
which suit his requirements, and is most often willing to pay
the required price
 When a retailer provides merchandise or knowingly adopts a
merchandise strategy, which will serve the needs of a specific

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

target audience in keeping with the lifestyles they lead, it is
termed as lifestyle merchandising
 Lifestyle merchandising is also common in the food and
beverage business where certain restaurants may cater to the
requirements of people from a certain class of the society
 An analysis of the customer’s lifestyle and then creating
products, services and environments which cater to the
lifestyle of the particular chosen set of customer’s offers many
advantages to the retailer
PRINCIPLES OF MERCHANDISING
 Understand the target market
 Build the merchandise plan, one store at a time
 Buy what your customers want, not what you want
 Build the right assortment
 Be consistent

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 Offer value
 Understand the needs of the vendor and negotiate a win-
win
 Share information
 Accept that mistakes happen
 Seek to surprise the customer