Retailing Review Chapters 14-17

Retailing Review Chapters 14-17
Chapter 14- Merchandising
Define merchandising
What is a merchandising philosophy
Distinguish between:
the merchandising function and buying function merchandise philosophies
micromercandising and cross-merchandising
Understand the buying organization formats and processes:
1. level of formality
2. degree of centralization (centralized buying vs. decentralized buying)
3. organizational breath
4. personnel resources use – (inside vs. outside buyers; resident buyers or
cooperative buying).
5. functions performed
6. staffing decisions
Merchandise Planning factors
1. forecasts – staple merchandise, basic stock list, assortment merchandise other
terms fashion vs. fad merchandise, seasonal merchandise and never out list and
model stock plan
2. innovativeness- what roles does product life cycle play
3. product assortment – width and depth of assortment
4. brands – difference between manuf. brands and private store brands (Read this
section carefully) – what’s the battle of the brands
5. timing
6. allocation
What is category management and what function does it play in retailing
Chapter 15- Implementing Merchandise Planning
Know the 8 sequential steps in implanting a merchandise Plan
1. Gathering information – sources, want book, supplier information
2. selecting and interacting with merchandise sources – who are the suppliers
3. evaluating merchandise
4. negotiating purchases –opportunistic buying, slotting allowances
5. what involved in concluding purchases- consignments and memorandum
6. receiving and stocking – what is involved here
7. reorder merchandise – what are the 4 critical factors:
8. re-evaluating merchandise and suppliers
Logistics involves what?
Be familiar with the logistics performance goals
Order processing and fulfillment – quick response inventory planning, floor –ready
merchandise efficient consumer response planning
Be familiar with the transportation and warehousing- direct store distribution
How is customer transactions and customer service related?
Define inventory management
What are the expectations of retailers on suppliers relative inventory management ( pg
What are the proper inventory levels
Why is merchandise security important? Inventory shrinkage
How do you reduce merchandise shrinkage?
How do you reduce merchandise shrinkage from theft?
Explain reverse logistics and why is it important?
Chapter 16- Financial Merchandise Management
What is the purpose of financial merchandise management
What is the difference between dollar control and unit control
What is the difference between the 2 major inventory valuation methods -- cost and retail
methods of accounting ( include the advantages and disadvantages)
Under what situation is each method of method inventory valuation best.
What are the critical issues in merchandise forecasting and budgeting:
1. designate control units – what are these?
2. What is a sales forecast? What is a monthly sales index?
3. How do inventory planning – basic stock, percentage variation method, weeks
supply method, stock sales method
4. How do you plan reductions
5. Know how to calculate plan purchases
6. Plan profit margins
Unit control systems involved what?
What are physical inventory systems –
1. physical inventory
2. Perpetual inventory systems
Be familiar with Financial Inventory control
Basic terms – stock turnover
When do you recorder
Reorder point
Order lead time
Usage rate
Safety stock
Automatic reordering systems
Economic reorder quantity (EOQ)
Chapter 17 – Pricing in Retailing
Understand the three basic pricing options
1. discount orientation
2. at the market orientation
3. upscale orientation
Be familiar with the external factors affecting retail price strategies
1. consumers
2. governmental
3. manufacturers, suppliers
4. competition
Consumer – elasticity of demand
Governmental – horizontal price fixing, vertical price fixing,
Price discrimination
Robinson-Patman Act
Minimum price laws
Predatory pricing
Loss leaders
Price advertising- bait and switch advertising
Unit pricing and item price removal
Manufacturers – Gray market goods
Competition – market pricing, administered price
Be familiar with the developmental of a retail pricing strategy which includes:
1. retail price objectives- penetration vs. skimming strategy
2. Price Policy
3. price strategy- methods to set specific price
demand-oriented pricing
Price –Quality
Cost Oriented pricing Know how to calculate market prices – Pages 426-430
Markup percentage
Competition oriented pricing
4. implementation of the price strategy – customary pricing and everyday pricing
variable pricing
be familiar with yield management pricing
One price policy vs. flexible pricing
Odd vs. even pricing
Leader pricing, Multiple unit and bundled pricing
Price lining
Know how to calculate price adjustments
How should markdowns be timed?
Early, late mark downs
Seasonal and storewide clearance