Merchandise Management – Module IV

By: Prof. Mubashir

 Meaning
 Merchandise is a broader concept than a product. It include various
features with which a product is offered at the store. Merchandising is the
process and function of designing and delivering the product to ensure
customers satisfaction and meet the objective of profit making to the
organization. There are different opinions and definitions on
merchandising.
 AMA – American Marketing Association has defined merchandising as
“Planning involved in marketing right merchandise, at right place at
right time in the right quantities at the right price”.
 E.g. – Amazon(dot)com, promises to deliver around 1 crore products
within 24 hours and payment after delivery.
 Merchandising can be defined as “Planning, Buying, Assorting,
Promoting Placing, Setting and Replenishing the Goods”. Goods
bought must be sold or replenished the unsold stock will be a burden on
finance. So planning need to be made what kind of product is to be
brought and how it should be priced, promoted and placed so that
customer is attracted towards the product.
 Factors Influencing Merchandising
The following factors influence retail merchandising:
•Size of the Retail Operations
This includes issues such as how large is the retail business? What
is the demographic scope of business: local, national, or
international? What is the scope of operations: direct, online with
multilingual option, television, telephonic? How large is the
storage space? What is the daily number of customers the business
is required to serve?

•Shopping Options
Today’s customers have various shopping channels such as in-
store, via electronic media such as Internet, television, or
telephone, catalogue reference, to name a few. Every option
demands different sets of merchandising tasks and experts.

•Separation of Portfolios

Depending on the size of retail business, there are workforces for

handling each stage of merchandising from planning, buying, and
selling the product or service. The small retailers might employ a
couple of persons to execute all duties of merchandising.
Type of Merchandise`
Merchandise can be broadly classified under following heads:

Staple: These are necessaries of life that are used everyday. E.g. – Food, Clothing, Stationery, Cosmetics,
toiletries etc. They have regular and stable demand. Fluctuation in demand supply and price is minimum.
Fashion: Consumption of these goods is dependent on current fashion. Demand lasts until its fashion.
Depending on nature of goods, fashion may be for seasons or years. Retailer has to stocks the product until the
fashion lasts. If the stock remains unsold as goods become out of fashion, has he has to adopt marketing strategy
like discount, ‘buy one get one offer’ to clear stock.
Fads: Goods that are in demand for a very short period of time. It can be said as fashion which lasts for a very
short period of time. It is risky to store such goods in bulk quantity as there is no guarantee regarding duration of
demand.
Seasonal: Goods that are demand in particular seasons. Based on weather features, we can classify seasons as
Monsoon, Summer, Winter accordingly specific products like, Umbrella, Sweaters, Cool Goggles, soft drinks,
Ice creams etc., are demanded accordingly the product is to be stored. Similarly season of festivals, marriage
have its own demand for sweets, Jewellery, Clothing, etc
 Role and Responsibilities of Merchandiser

Merchandiser plays an important role in the success of any retail organization. It is he who selects the goods to be sold. If his
selection is right, retail outlets will not have difficulty in selling the goods. Firm may have team of merchandisers, either a
merchandiser for each store or for each line of product depending on size and resources of organisation.

Merchandiser and merchandise departments have following functions:

1. Planning:
Merchandiser has to prepare purchase budget. Purchase of merchandise is based on estimated sales, objectives of organisation and
expected returns. Merchandise plan is prepared for the entire organization i.e., store wise, department and also product wise. Plan also
determines new products to be added and old products to be deleted based on prospects of sales.
2. Directing:
Firm may have specialized buyers who are expert in finding suppliers and negotiate with them. Merchandise department gives
guidelines and directions to buying department regarding quantity and budget of purchase. They may also direct the terms of
purchase. As per the broad guidelines and directions, buyers make timely purchase of merchandise to match the needs of
organisation.
3. Co-Ordinating:
Merchandiser undertakes balancing, timing and synchronizing the activities of buying and selling. He takes periodic stock report
from each stores, monitors stock level, and determines purchases to be made. He also co-ordinates buying efforts of different buyers
of the organisation.
4. Controlling:
He controls entire operations of merchandising i.e.,
(a) buying
(b) (b) issue of merchandise to stores,
(c) (c) visual display (d) pricing of sale,
(d) (e) sales promotion activities.
He periodically takes stock reports determine financial implication of investment on merchandise. Ascertains
return on investment store wise, category wise and product wise to determine which product contributing to the
profits of the organisation. Cost cutting measures are adopted to increase profitable lines. Sections and products
that have no future may be eliminated. He controls the entire functioning to ensure that merchandising operations
are profitable.
 Retail Buyer’s Role and Responsibilities
 The roles and responsibilities of the retail buyer extend across a number of areas:
 Planning and strategy:
 The job of the retail buyer 'begins' with planning - identifying and analysing consumer trends and patterns which might work for their
organisation. Buyers must be able to not only analyse the results of research, but use the data to predict future results. Current events and
culture will play a big part in consumer behaviour, so the buyer needs to keep up-to-date with the latest news and research. Once data
has been analysed, retail buyers are in a position to create a buying strategy - reflecting the needs, identity and budget of their
organisation.
 Negotiation:
 After identifying which products to acquire for their organisation, retail buyers must meet with suppliers to agree on price and make
purchases. Retail buyers can expect to travel extensively - attending trade shows, meeting wholesalers and visiting stores - during this
time. Good negotiation skills, to ensure sufficient quantities of product are acquired within means and budget, are crucial.
 Purchase and delivery:
 The buyer ultimately purchases the products to be sold in their retail outlets - but the job does not end there. Once acquired, products
must be delivered to shops - it is the buyer's role to oversee delivery and ensure the right stock ends up in the right place.
 Management and presentation:
 The role of the retail buyer extends to stock management and, in some cases, the manner in which new products are introduced. Typical
challenges include monitoring stock levels across different stores, analysing purchasing trends and moving stock from one location to
another to bolster sales. Once stock has been delivered to the shop floor, the buyer may engage in consumer feedback - gathering
information on new trends and what customers liked or did not like about certain products.