MKT 3831

Retail Buying and Merchandising

A. Ratikarn
Semester 1/2007

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WEEK DATE TOPIC
1 2-Jun-07 Overview of Retail Business
2 9-Jun-07 Retail Management
3 16-Jun-07 Retail Marketing Strategies
4 23-Jun-07 Retail Marketing Mix
5 30-Jun-07 Retail Merchandising
6 7-Jul-07 Retail Buying & Handling
7 14-Jul-07 Retail Buying Role & Responsibility
21-Jul-07 MID-TERM EXAMINATION
28-Jul-07 MID-TERM EXAMINATION
8 4-Aug-07 Category Management Concept: Overview
9 11-Aug-07 Category Definition, Category Role
10 18-Aug-07 Category Assessment, Category Scorecard
11 25-Aug-07 Category Strategies
12 1-Sep-07 Category Tactics
13 8-Sep-07 Review Class
14 15-Sep-07 Group Project Presentation
22-Sep-07 FINAL EXAMINATION
29-Sep-07 FINAL EXAMINATION

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OVERVIEW OF RETAIL BUSINESS

IN THAILAND

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Overview of Retail Business :
How many types of retailer in Thailand?

• Where do you buy food or snack?

• Where do you buy Coca-Cola?
• Where do you shop shirts/dresses?
• Where do you buying shampoo?
• Where do you buy food for your pets?
• Where do you buy books?
• Where do you buy medicine?

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 Types of Retail Business for FMCG in Thailand

Department Stores Specialty Stores

•Central
Hypermarket
•Tesco-Lotus •B2S
•Robinson •Supersports
•Big C
•The Mall •Powerbuy
•Carrefour
•Siam Paragon •Powermall
•Emporium Personal Care
•Homeworks
•Isetan or HBC Stores •Homepro
•Tokyo •Watson’s
•Index
•Tang Hua Seng •Boots
•ToysRus
•Jusco •Guardian

Warehouseclub Supermarket
CVS + G-stores •Tops
•Makro
•7-Eleven •Home Fresh Mart
•Family Mart •Foodland
•Jiffy (Jet) Open Trade •Villa
•Select (Shell) •Pop & Mom Shop
•Tang Hua Seng
•Tiger Mart (Esso) •Minimart

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 Retail Definition by AC Nielsen
North
• Nationwide
• Greater Bangkok, Central,
North, Northeast and South
Northeast
Central • Defined Retail Outlets
•Super/Hypermarkets / Personal Care Stores
•Convenience / G-Stores
•Open Trade (Pop&Mom Shop)
•Licensed Pharmacy
Greater Bangkok
Bangkok, Samut Prakarn, Nonthaburi
Pathumthani

South

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 Department Stores

• A department store is a retail establishment which specializes in selling a

wide range of products without a single predominant merchandise line.
Department stores usually sell products including apparel, furniture, applian
ces, electronics, and additionally select other lines of products such as
paint, hardware, toiletries, cosmetics, photographic equipment, jewellery, to
ys, and sporting goods. Department stores are usually part of a retail chain
of many stores situated around a country or several countries.

Department Stores:
Carry a wide variety of product lines—typically
clothing, home furnishings, and household goods.
Each line is operated as a separate department
managed by specialist buyers or merchandisers.

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 Hypermarket

• In commerce, a hypermarket is a superstore which combines a supermark

et and a department store. The result is a gigantic retail facility which carries
an enormous range of products under one roof, including full lines of groceri
es and general merchandise. When they are planned, constructed, and
executed correctly, a consumer can ideally satisfy all of his or her routine
weekly shopping needs in one trip to the hypermarket.
• Hypermarkets, like other big-box stores, typically have business models
focusing on high-volume, low-margin sales. Due to their large footprints -- a
typical Wal-Mart Supercenter covers 150,000 square feet, a typical Carrefou
r 210,000 square feet -- and the need for many shoppers to carry large
quantities of goods, many hypermarkets choose suburban or out-of-town
locations that are easily accessible by automobile.

Hypermarket:
Carry a wide variety of product lines under one roof
(one stop shopping), focusing on high-volume, low
margin sales.

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 Supermarket

• A supermarket is a departmentalized self-service store offering a wide

variety of food and household merchandise. It is larger in size and has a
wider selection than a traditional grocery store.
• The supermarket typically comprises meat, produce, dairy, and baked
goods departments along with shelf space reserved for canned and
packaged goods as well as for various nonfood items such as household
cleaners, pharmacy products, and pet supplies. Most supermarkets also sell
a variety of other household products that are consumed regularly, such as
alcohol (where permitted), household cleaning products, medicine, clothes,
and some sell a much wider range of non-food products.

Supermarket:
Self-service store that carries a wide variety of food,
laundry, and household products.

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 Specialty Stores

• Specialty stores are small stores which specialise in a specific range of me

rchandise and related items. Most stores have an extensive width and depth
of stock in the item that they specify in and provide high levels of service an
d expertise. The pricing policy is generally in the medium to high range, dep
ending on factors like the type and exclusivity of merchandise and ownershi
p, that is, whether they are owner operated or a chain operation which has t
he advantage of bulk purchasing and centralised warehousing system. They
differ from department stores and supermarkets which carry a wide range of
merchandise.

Specialty Stores:
Carry narrow product lines with deep
Assortments within those lines.

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 Warehouse Club

• A warehouse club is a retail store, usually selling a limited variety of merch

andise, in which customers pay annual membership fees in order to shop.
The clubs are able to keep prices low due to the no-frills format of the stores
. The concept is similar to the many consumers' cooperative supermarkets
found in Europe, though using bigger stores and not co-operatively owned.
The use of members prices without co-operative ownership is also
sometimes used in bars and casinos.

Warehouse Club:
Off-price retailer that sells a limited selection of
brand-name grocery items, appliances, clothing,
and a hodgepodge of other goods at deep
discounts to members who pay annual
membership fees.

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 Personal Care Stores/Health & Beauty Stores

• A personal care store is a retail that sells perfumeries & cosmetics to groc
ery, and some store is also selling drugs & medicine. This store format is
compact and situated in office buildling or shopping center. This store
carries a wide variety of health & beauty products. Product Consultant
service and Pharmacist are provided at this stores.

Personal Care Stores:

Focusing on health & beauty products or
product for daily usage.

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 Convenience Stores (C-Store or G-Store)

• A convenience store is a small store or shop. They are often located

alongside busy roads, or at gas/petrol stations. This can take the form of
gas stations supplementing their income with retail outlets, or convenience
stores adding gas to the list of goods that they offer. Railway stations also
often have convenience stores. They are also frequently located in densely
-populated urban neighborhoods.

Convenience Stores:
Small stores located near residential areas that
are open long hours 7 days a week and carry
a limited line of high-turnover convenience goods.

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 Convenience Stores

Differences from supermarkets

• Although larger newer convenience stores have quite a broad range of
items, the selection is still limited compared to supermarkets, and in many
stores only 1-2 choices are available.
• Prices in a convenience store are typically higher than at a supermarket,
mass merchandise store, or auto supply store (with the exception of the
goods such as milk, soda and fuel in which convenience stores traditionally
do high volume and sometimes use as loss leaders).
• The stores will sometimes be the only stores and services near an interstate
highway exit where drivers can buy any kind of food or drink for miles. Most
of the profit margin from these stores comes from beer, liquor, and cigarette
s. Although those three categories themselves usually yield lower margins
per item, the amount of sales in the categories generally makes up for it.
Profits per item are much higher on deli items (bags of ice, chicken, etc), but
sales are generally lower.
• At least in some countries most convenience stores have longer shopping h
ours, some being open 24 hours.

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 Organizational Classification

Chain Stores:
Two or more outlets that are owned and controlled, have central buying and
merchandising, and sell similar lines of merchandise.

Voluntary Chain:
A wholesaler-sponsored group of independent retailers that engages in bulk
buying and common merchandising.

Retailer Cooperative:
A group of independent retailers that bands together to set up a jointly owned,
Central wholesale operation and conducts joint merchandising and promotion efforts.

Franchise:
A contractual association between a manufacturer, wholesaler, or service
organization (a franchiser) and independent businesspeople (franchisees) who
buy the right to own and operate one or more units in the franchise system.

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Retailer : a middlemen between Producer & Consumers

Manufacturer Wholesaler/Retailer Consumers

Push Strategy

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 Business Objective -> To have a Healthy Business

We can create a Healthy Business by...

-> have a good quality in sell-in
-> have a good quality in sell-out
Sell-Out
61,000,000
Consumers

Sell-In

Manufacturer 294,000
Retail Outlets

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Channel of Distribution :
A Retailer is an important aspect of successful marketing
Wholesalers: a multi-level service
• The advantages of using a wholesaler actually make it a much more cost-
efficient route for most MFG than direct delivery.
– Their sales force can reach many small stores far more economically
than the MFG could.
– They cut the MFG’s inventory costs and risks by holding goods in
warehouses.
– They help finance MFG by ordering early and paying promptly.
– They even absorb risks, by carry the cost of theft, damage and spoilage.
– Their transportation network is fastest & cheapest way of getting more
products into more stores.

Retailers: Point of sales – Where buying begins

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Organization of Retail Business
Example : Supermarket
President

Vice President Vice President Vice President Vice President

Vice President
Buying & Business Finance & Information
Store Operation
Merchandising Development Accounting Technology

Food Non Food Regional Regional New Store Finance Accounting

Manager Manger Location
Programmer Help desk
Category Manager or Store Manager
Merchandising Manager
Staff at Store

Buyer

Buyer

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Buyer’s Roles & Responsibilities:

• Buying & Merchandising

• Merchandising Presentation

• Advertising

• Shortage Control

• Staff Development & Training

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Buyer’s Roles & Responsibilities:
Buying & Merchandising

• Follow the company policy and quality/image

positioning, develop a merchandising strategy for
the departments.
• Develop an achieved planned goals in sales,
mark-up, profits
• Analyze sales/stock/vender performance reports
and take action
• Forecasting sales for Promotion items
• Negotiate with vendors for favorable terms,
discounts, and transportation allowances.
• Participate in product development for private
labeling, importing goods.
• Stay current on new trend and exploring new
merchandising trends.
• Shop & analyze competitive stores with price,
assortments and display in mind.

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Buyer’s Roles & Responsibilities:
Merchandising Presentation

• Define a point of view toward merchandise presentation (displays)

• Work with a Vendor to maximize the excitement of displays

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Buyer’s Roles & Responsibilities:
Advertising
• Prepare advertising and promotion plans, budgets, and schedules
• Inform branch stores of advertised promotion well in advance, so they can
plan ahead for them. Schedule deliveries to make sufficient stock available
for all advertised goods.
• Track & analyze the results of any advertising, for use in future planning
• Conform to the requirements of country laws & regulations

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Buyer’s Roles & Responsibilities:
Shortage Control
• Ensure that all purchase orders, requests for price revisions, transfers of
goods, and vendor returns and processed promptly and according to
company procedures
• Review purchase journals regularly and take appropriate action
• Maintain good working relationships with operating divisions to promptly
resolve problems in those areas as they arise.
• Participate fully in all shortage control audits and loss prevention programs

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The End

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