MERCHANDISE ASSORTMENT

PLANNING IN RETAIL
MANAGEMENT :

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• Merchandising process can be very inefficient for Retailers who do not
adopt category management.

• In Retail organisation, the responsibility for buying merchandise is done

either by a buyer or category manager depending on the organisation’s
structure.

• In today’s retailing environment, the category manager is more than a

buyer in the traditional sense.

• Category Management (CM) in general is an assortment of items that

the customer sees as reasonable substitute for each other.
• The key elements of category management are:
 Meeting consumer and customer needs.
 Managing a business unit strategically.
 Maximizing financial returns.
 Working together.

• Retail organization merchandise management functions can be

categorized into three main areas:
•Merchandise Operations
•Merchandise Planning
•Merchandise Buying
THE BUYING ORGANIZATION :
ASSORTMENT PLANNING PROCESS :
• What is the meaning of the trade-off?

A trade-off is a kind of compromise that involves giving up

something in return for getting something else.

It is an act of balancing between two opposing situations,

qualities or things, both of which you want and need.

• What is the difference between product assortment and variety?

A deep assortment—the opposite of a narrow assortment—of

products means that a retailer carries a number of variations of a
single product. A wide variety—the opposite of a narrow variety—
of products means that a retailer carries a large number of different
kinds of products.
• What is the importance of variety and assortment in retail?

Variety and assortment are important elements in the retail market

because they help customers distinguish among different retail
chains and stores. For instance, customers may prefer retail store X
because of its focus on cookware and kitchen utensils.

• What is the need for product assortment?

Businesses can use product assortment as a way to differentiate

themselves from their competitors and to meet the needs of their
target market. By carefully curating their product assortment,
businesses can increase sales, improve customer satisfaction, and
reduce costs.
• Assortment planning is how fashion retailers plan their
assortment of seasonal styles and allot them to each store and
other sales channels. The idea is to offer the right styles, in the
right sizes and colors, through the right channels..

What is an example of an assortment plan?

• In other words, assortment planning is about deciding what

products to sell and where to sell them based on seasonality
and demand at particular locations.

• For example, a clothing brand may sell bathing suits and

breathable fabrics during summer, but shift to sell fleece
jackets and sweaters during the winter.
What is assortment planning in retail management?

• Assortment planning is defined at its simplest, as the process retailers

use to decide which products and variations to carry and sell in an
upcoming season.

• Retailers plan their assortment along two dimensions: Breadth/width:

the number of product types and categories.
Product Mix Trends :

A product mix is the total number of product lines and

individual products or services offered by a company.

Additionally referred to as product assortment or

product portfolio. Product mixes vary from company
to company. Some have multiple product lines with
lots of products in each line.
What Is Shotgun Approach?

The shotgun approach is a marketing strategy where marketers try to

appeal to a wide market of potential customers by using various (both
above the line and below the line) advertising strategies. This situation
occurs when the target audience of the business is too diverse to focus on
any one segment.

Hence, just like a shotgun that fires a large number of smaller pellets in
a wide area, marketers opt for techniques like television advertisements,
out of home advertisements, radio ads, and other
ATL & BTL marketing strategies to target as many people as possible.
Features of Shotgun Approach :

The shotgun approach is a subset of mass marketing approach. The focus is

on getting as many eyeballs as possible by creating some creative
promotional strategies and placing them in huge quantities.

•It is an advertising approach and focuses on promotion to a wide array of

audience.

•The main focus is to get as many impressions as possible which will

eventually turn into sales.

•It usually costs a lot to implement.

Who all can benefit from Shotgun Approach?

FMCG companies usually have perfect competition and a varied

demographic audience. They prefer to use this approach to create
more brand awareness and brand preference. But a small business
like a local coffee shop could also benefit from shotgun approach.
They might reach to more potential customers with a non-specific
campaign than it would with targeted marketing materials.

The Psychology Behind Shotgun Approach

This approach can be used by and is useful to any kind of business

that has its target audience spread over a large demographic or has
various demographics as its target audience. It increases the odds
of hitting a target when it is more difficult to focus on one.
Definition: Rifle Approach :

The Rifle Approach is a method of advertising in which a certain

demographic is efficiently and successfully targeted using a set of well-
defined promotional tools. This occurs when a company has successfully
zeroed in on its ideal client and is ready to implement personalised
marketing methods. If businesses want to reach specific audiences, they
shouldn't waste money on broad-reaching campaigns but should instead
zero in on the channels that will help them do so. This Method makes use
of several channels such as print media, online communities, search
engines, personal contacts, and more.
Difference between Shotgun Approach and Rifle Approach in Marketing
Shotgun Approach
Wide audience targeting
Usually involve ATL marketing
strategies
The goal of a shotgun strategy is
to get your message out to as
many individuals as possible at
once. To be successful in online
marketing, you need to place ads
(whether banners or text links) on
as many relevant websites as
possible, including high-traffic
portals like Yahoo.
Rifle Approach
Niche targeting
Usually involve direct marketing
strategies
The goal of Rifle marketing, on
the other hand, includes
narrowing your focus to a certain
demographic. You avoid generic
mass-market ads in favour of
targeted placement in magazines
read by your target audience.
Using direct mail, you can target
your audience with precise
accuracy.
What is merchandise purchasing in retail management?

Merchandise buying is an important part of retail management that

involves retailers finding and purchasing goods from manufacturers
to sell them on behalf of their business.

What is a merchandise purchase?

Merchandise is an inventory asset that a retailer, distributor or

wholesaler purchases from a supplier to sell for profit.
Merchandise Pricing :

Price plays an important role in retailing as it explains the interrelationship

between the objectives of the retail store and the components of the retail mix.

A pricing strategy should help retailers earn a profit and, at the same time,
benefit the customers.

Merchandise Pricing - An overview

Setting the retail price

Price setting objectives

Price setting determinants

Pricing Strategies and Practices :

Every day low pricing (EDLP)

High/low pricing

Coupons

Rebates

Leader pricing

Price bundling

Multiple pricing

Price lining

Odd pricing
Methods of Setting Prices:

Cost oriented pricing

Demand oriented pricing

Competition oriented pricing

Adjustments to the Initial Retail Price Markdown:

Markdown Cancellation

Additional Markups

Additional Markup Cancellation

Laws Governing Retail Pricing