Professional Documents
Culture Documents
Prepared By
Dr. Poonam Puri
Professor
Institute of Management Studies
Bundelkhand University, Jhansi.
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developed content is purely for academic purpose.
BUYING AND HANDLING
MERCHANDISE
Developing And Implementing The
Merchandising Plan
MERCHANDISING BUYING & HANDLING
PROCESS
• “MERCHANDISING can be defined as the planning and
supervision involved in marketing particular goods
and/or services at the places, times , prices and quantities
which will best serve to realise the marketing objectives
of the business.”
Source:https://blogmickey.com/wp-content/uploads/2017/09/world-showcase-epcot-35-11.jpg
1. ESTABLISHING A FORMAL OR
INFORMAL BUYING ORGANISATION
a. FORMAL BUYING ORGANISATION
Merchandising is a distinct task
Separate department
Large retailers involving distinct buying personnel.
INFORMAL BUYING ORGANISATION
Existing personnel handle
No clear –cut responsibility and authority
b. CENTRALISED B.O.
All purchase decisions made centrally
DECENTRALISED B.O.
Purchase decisions made locally
d. COOPERATIVE BUYING
A group of independent retailers get together to make large purchases from a supplier. ( Volume
discounts)
CENTRALISED BUYING ORGANISATION
• ADVANTAGES • DISADVANTAGES
– Integration Of Effort – Inflexibility
– Strict Controls – Time delays
– Staff Support – Poor morale at the local
– Consistent Image stores
– Nearness To Top – Excessive uniformity
Management
DECENTRALISED BUYING ORGANISATION
• ADVANTAGES • DISADVANTAGES
– Adaptability To Local – Disjointed Planning
Conditions – Inconsistent Image
– Quick Order Process – Limited Management
– Improved Morale Control
– Little Staff Support
– Loss Of Volume Discount
2. OUTLINING THE MERCHANDISE PLANS
a. What to stock?
b. How much to stock?
c. When to stock the merchandise?
d. Where to stock the merchandise?
a. WHAT TO STOCK
• Attracting which customer class?
• A NEVER-OUT-LIST
– Is utilized when a retailer plans the stock levels for best sellers.
– Items account for large sales volume
– Stocked well to ensure 100% availability
Items are added or deleted from this list as their popularity & importance to
the store varies.
c. WHEN MERCHANDISE IS STOCKED?
• Retailers should forecast annual sales keeping in
mind the following points:
– Peak Season
– Delivery Time
– Stock Turnover
– Discounts
– Order Time
– Routine Vs. Special Order
d. WHERE MERCHANDISE IS STOCKED?
• STOCKROOM ?
• WAREHOUSE ?
3. GATHERING INFORMATION ABOUT
CONSUMER DEMAND
• Marketing Research
• Sources of information
– Consumers
– Suppliers
– Retail personnel
– Competitors
– Retailers can have a tool for recording demand –
WANT BOOK( consumers request for out-of-stock
goods or unstocked merchandise)
4. DETERMINING MERCHANDISING
SOURCES
• Major sources to procure merchandise :
– Company Owned
– Outside, Regularly Used
– Outside, New
• While selecting merchandise sources a retailer should consider several
criteria
– Reliability
– Price – quality
– Credit
– Local advertising
– Order processing time
– Exclusive rights
– Ethics
– Re-order
– Mark-Up
– Risk
5. EVALUATING MERCHANDISE
• Should each item be examined or bought on
description
• 3 types of evaluation:
– INSPECTION
• Occurs when each individual unit is examined before
purchase and after delivery.
– SAMPLING
• Takes place when a large quantity of breakable, perishable,
or expensive items is regularly purchased.
– DESCRIPTION
• Buying takes place when a retailer purchases standardised
unbreakable merchandise. The items are not sampled or
inspected; they are ordered in quantity from a verbal or
pictorial description.
6. NEGOTIATING THE PURCHASE
• A New order or a special order will always result in a negotiated
contract. ( all terms & condition laid down)
• Levy Michael, Weitz Barton and Grewal Dhruv (2019) Retailing Management, 10th edition. Mc Graw Hill.