Marketing bán hàng - Chapter 12: Managing merchandise assortments

Chapter 12Managing Merchandise AssortmentsMerchandise Management BuyingSystems PlanningMerchandiseAssortments BuyingMerchandisePricing RetailCommunicationMix2Merchandise Management Process by which a retailer offers the right quantity of the right merchandise in the right place at the right time and meets the company’s financial goals. Sense market trends Analyze sales data Make appropriate adjustmentsc) image100/PunchStock3Merchandise Management and Investment Portfolio ManagementDollars to invest in inventoryInvest in “hot” merchandiseSave a little for opportunities (open to buy)Monitor portfolioSell losers (markdowns)4Standard Merchandise Classification Scheme and Organizational Chart5Merchandise Management Issues6The Category A merchandise category is an assortment of items that customers see as substitutes for each other. Vendors might assign products to different categories based on differences in product attributes Retailers might assign two products to same category based on common consumers and buying behavior7Category ManagementCategory management is the process of managing a retail business with the objective of maximizing the sales and profits of a category.Department stores manage at category level, but grocery stores manage merchandise around brands and vendors Objective is to maximize the sales and profits of the entire category, not just a particular brand. The McGraw-Hill Companies, Inc./Andrew Resek, photographer8Category CaptainSelected vendor responsible for managing a category Vendors frequently have more information and analytical skills about the category in which they compete than retailersHelps retailer understand consumer behaviorCreates assortments that satisfy the customerImproves profitability of categoryProblemsVendor category captain may have different goals than retailer9Antitrust Consideration The vendor category captain could collude with retailer to fix prices It could block brands from access to shelf space Category captains need to temper zeal for control over retailersStockbyte/Punchstock Images10The Buying OrganizationMerchandise GroupMen’s wearDepartment..Young Men’s wearClassification...Pants Category..Jeans Sock Keeping Unit (SKU)..Levi, 501, size 26 waist, 32 inseamRyan McVay/Getty Images11Evaluating Merchandise Management PerformanceMerchandise managers have control overThe merchandise they buyThe price at which the merchandise is soldThe cost of the merchandiseMerchandise managers do not have control overOperating expensesHuman resourcesReal estateSupply chain managementInformation systemsSO HOW ARE MERCHANTS EVALUATED?12GMROIGross Margin Return on Investment A measurement of how many gross margin dollars are earned on every dollar of inventory investment made by the buyerDigital Vision / Getty Images13GMROIInventory Productivity MeasuresGMROI = Gross Margin Percent x sales to stock ratio = gross margin x net sales net sales avg inventory at cost = gross margin avg inventory at cost14ROI and GMROIAsset Productivity MeasuresStrategic Corporate LevelReturn on Assets = Net Profit Total AssetsMerchandise Management LevelGROI = Gross Margin Avg Inventory15Illustration of GMROI16GMROI for Selected Department in Discount Stores17Calculating Inventory TurnoverInventory turnover = Net Sales Average inventory at retail Inventory turnover = Cost of goods sold Average inventory at costAverage inventory = Month1 + Month2 + Month 3 + Number of months18Inventory TurnoverMonth Retail Value of InventoryEOM January $22,000EOM February 33,000EOM March 38,000Total Inventory $93,000Average inventory = $93,000 ÷ 3 = $31,00019Inventory Turnover and Stock-to-Sale RatioInventory turnover = Net Sales Average inventory at retail Inventory turnover = Cost of goods sold Average inventory at costSock-to-Sales Ratio = Net Sales Average cost of inventory20Advantages of Rapid TurnoverIncreased sales volumeLess risk of obsolescence and markdownsImproved salesperson moraleMore resources to take advantage of new buying opportunities21Approaches for Improving Inventory TurnoverReduce number of categoriesReduce number of SKUs within a categoryReduce number of items in a SKU BUT if a customer can’t find their size or color or brand, patronage and sales decrease! another approach22another approachTo improve inventory turnoverBuy merchandise more oftenBuy in smaller quantities which should reduce average inventory without reducing salesBUT by buying smaller quantitiesBuyers can’t take advantage of quantity discounts soGross margin decreasesOperating expenses increaseBuyers need to spend more time placing orders and monitoring deliveries23Merchandise Planning Process24Developing a Sales Forecast Understanding the nature of the product life cycle Collecting data on sales of product and comparable products Using statistical techniques to project sales Work with vendors to coordinate manufacturing and merchandise delivery with forecasted demand (CPFR)Royalty-Free/CORBIS25The Category Product Life Cycle26Variations in the Category Life Cycle27Factors Affecting Sales ProjectionsControllablePromotionsStore LocationsMerchandise PlacementCannabalizationUncontrollableSeasonalityWeatherCompetitive ActivityProduct AvailabilityEconomic Conditions28Fad vs. FashionHow do buyers tell the difference?Is it compatible with changes in consumer lifestyles?Does the innovation provide real benefits?Is the innovation compatible with other changes in the marketplace?Who is adopting the trend?Ryan McVay/Getty Images29Forecasting Fashion Merchandise CategoriesRetailers develop fashion forecasts by relying on:Previous sales dataPersonal awarenessFashion and trend servicesVendorsTraditional market researchThe McGraw-Hill Companies, Inc./Lars A. Niki, photographer30Personal AwarenessHow do fashion buyers know the trends?Internet chat roomsLook in closetsGo to the moviesGo to rock concertsGo to nightclubsRyan McVay/Getty Images31Collaboration, Planning, Forecasting, and Replenishment Systems (CPFR) Systems used by retailers and vendors to work together to insure that the right merchandise is at the right place at the right time.Benefits both retailers and vendorsIncreases fill rate, reduces stockouts, increases inventory turns www.cpfr.org32Assortment Planning Variety is the number of different merchandising categories within a store or departmentAssortment is the number of SKUs within a category.Product availability defines the percentage of demand for a particular SKU that is satisfied.33Assortment Plan for Girls’ Jeans34Is This Store Heavy on Variety? On Assortment?PhotoLink/Getty Images35Determining Variety and AssortmentProfitability of Merchandise MixCorporate Philosophy Toward AssortmentPhysical Characteristics of StoreComplementary MerchandiseRetail strategy can determine thisPhotoLink/Getty Images36