7/1/2011
RETAIL BUYING AND MERCHANDISE
MANAGEMENT
A JOURNEY………………………
SANKAR MUKHERJEE
&
TEAM
01.07.2011
AGENDA
AREAS

FUNDAMENTALS OF
MERCHANDISING

MARCHANDISE STRATEGIES

PLANNING

SOURCING

ARRANGING AND DISPLAY
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SPACE MANAGEMENT
DURATION
1 HOUR
1 HOUR
01.07.2011
FRIDAY
06.07.2011
WEDNESDAY
1 HOUR
07.07.2011
THURSDAY
1 HOUR
08.07.2011
FRIDAY
1 HOUR
13.07.2011
WEDNESDAY
1 HOUR
14.07.2011
THURSDAY
01.07.2011
FUNDAMENTALS
ORIGIN
 DEFINATION(WHAT IS MERCHANDISING)
 EVOLUTION
 PRINCIPALS
 PHILOSOPHY
 CONCEPT OF MERCHANDINGMANAGEMENT
STRATEGY
 HIERARCHY
 MIX
 COMPONENTS
 CATEGORY MANAGEMENT
 VISUAL MARCHENDISING
 ROLE & RESPONSIBILITIES

07.01.2011
ORIGINE OF WORD
MARCHANDISE (N). GOODS THAT ARE BROUGHT OR
SOLD/ GOOD THAT ARE FOR SALE IN A
STORE/SHOP(V).
EXAM: a wide selection of merchandise things you can buy
that are connected with
(V): to sell something using advertising. it originated French
word “ merchant”. It means goos bought and sold for a profit.

MARCHANDISING: 1) THE ACTIVITY OF SELLING
GOODS,OR TRYING TO SELL THEM,BY AD OR DISPLAYING
THEM
2) PRODUCT CONNECTED WITH A
POPULAR FILM OR MOVIE/PERSON/EVENT; THE PROCESS
OF SELLING THESE GOODs. It is the buying,presenting,and
selling of MERCHENDISE.
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WHAT IT IS ACTUALY……?????

AMA……..’’The planning involve in marketing the
right merchandise at the right place at the right time
in the right quantities at the right price.’’
MM IS THE
THEANALYSIS,PLANNING,ACQUISATION,H
ANDLING AND CONTROL OF
MARCHENDISE INVESTMENT OF A RETAIL
OPERATION.
 IT IS PROCESS BY WHICH A RETAILER
ATTEMPTS TO OFFER THE RIGHT
QUANTITIES OF THE RIGHT MERCHENDISE
IN THE RIGHT PLACE IN THE RIGHT TIME
WHILE MEETING THE COMPAN’S
FINANCIAL GOAL.
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07.01.2011
CONCEPT
CONCEPT……………it is not synonym for the
buying function, it is an integrated, end-to-end
business process that runs from planning the
assortment, to sourcing, to distribution, to
allocation of the goods to the stores, to promoting
and distribution, to allocation of the goods to the
stores, to promoting and selling the assortment
to the customers and finally to replenishing
inventory as necessary…….. Aufreit,et al
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EVOLUTION OF MERCHANDISING

PAST SITUATION;
The function traces its growth to the rise of organized retail
in the world. Initially, as the retailer operated one or two store, the functions of MM was
much simpler. Most of the cases retailer him-self did it. However when no of store started
incorporating the workload on the buyer increases significantly. But owing to the time
constraints buyers often had little in formation on time and ended up using approximation
based on SLAES VOLLUME to allocate merchandise between stores.

EMERGENCE OF CONCEPT:
To overcome the above difficulties a
new concept was brainchildren called” PLANNER” to act a link between stores and buyers.
As a result rarely of the any two store organized well to cater customer need in
transformation of financial profit of the retailer. Thus the type of retail business model
dictates the need of the function of MM.
07.01.2011
PRINCIPAL
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Understand the target market
Build the merchandise plan, one store at time
Buy what your customer want, not what you
want
Build the right assortment
Be consistent
Offer value
Understand the need of the vendor & negotiate
win-win
Share information
Accept the mistaken happen
Seek to surprise the customer
PHILOSHOPY
A MERCHANDISING PHYLOSOPHY…. set the guideline for all the
merchandise decision that a Retailer makes. The retail MP drives every product
decision from what product line to carry the self space allotted to different product
to inventory turnover to pricing and have to decide the BREADTH and DEPTH of
assortment within each category. In addition they must select the quality of
items,BRAND,PRICING POLICY across category or within.Finally,Retailer must
decide if assortment should generally be stable over time or wheather there should
be surprise, special, or customization in assortment.
example: NIKE’S AT ROME AIRPORT,COSTCO etc

MICROMERCHANDISING is focused on demograph,weather and customer
activitie.Instant electronic access to sales data has contributed substantially to its
commitment of customizing each store to the specific buying habits of a particular
store’s clientele.
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MANAGEMENT PROCESS
PERFORMANCE
MONITORING &
EVALUATION
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BUSINESS
STRATEGY
2
1
MERCHANDISE
STRATEGY
3
ALLOCATION
OF
MERCHANDISE
TO STORE
SOURCING
MAKE OR BUY
VENDOR
IDENTIFICATI
ON
NEGIOTIATION
PLACEING
ORDER
6
5
PLANNING
PRODUCT
PRICE
RANGE
ASSORTMENTS
SPACE
IMPORTANCE
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Analysis?????..... Is used because retailers must be able to correctly
identify their customer before they can determine the need and want
of customers in order to buy the correct merchandise.
Planning?????..... Occurs because merchandise must be purchased six
to twelve month before the selling season starts.
Acquisition???...... Need to be procured from either distributor/vendors
or manufacturer
Handling?????....... Involve seeing that where it is needed and the
proper condition to be sold.
Controlling?????..... Is process of ensuring the adequate financial
return on the merchandise investment called GMRO(GROSS
MARGIN RETURN ON INVESTMENT) GROSS
MARGINE/AVARAGE INVENTORY IN COST.
Holistically Merchandising is being defined
as the core/heart of both format of the retail.
6/28/2011

MICRO & CROSS MERCHANDISING
MICROMERCHANDISING is focused on demograph,weather and
customer activitie.Instant electronic access to sales data has contributed
substantially to its commitment of customizing each store to the specific
buying habits of a particular store’s clientele. Through micro merchandising
OTB(OPEN TO BUY) are better managed, budgetary techniques and other
planning efforts are more effective.
In CROSSED MERCHANDISING a Retailer carries COMPLEMENTORY
GOODS and SERVICE
to encourage shopper to buy more. Exam:
Apparels stores stock accessories and auto dealers offer extended warranty.
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07.01.2011
COMPONENT
PLANING
01.07.2011
MERCHANDISE MIX
VARIETY
It denotes full
range of mixture of
product that a
Retailer offer to its
target customers.
It determine the
segmentation of
targeted customers
for appealing.
SUPPORT
It deals with the
ASSORTMENT
planning and control
It refer to the
of the number of
number of product
units the retailer
items the retailer should have on hand
stock within a
to meet the expected
particular product
sale for the
line.
particular product.
01.07.2011
IT IS FINANCIAL TOOL TO FOR PLANNING AND CONTROLLING
FOR RETAILER’S MERCHANDISE INVENTORY MANAGEMENT
PROJECTED SALES
INVENTORY PLAN
BUDGET
ESTIMETED PURCHASES
Planned monthly sales monthly
reduction Desire end of the month
stocks=TOTL STOCK REQUIREDPLANNED BOM STOCK=PLANNED
MONTHLY PURCHASED
ESTIMETED REDUCTION
Markdowns, Discount& shortage
HIERARCHY
COMPANY
DEPARTMENT
MERCHANDISE CLASSIFICATION
MERCHANDISE CATEGORY
SUB CATEGORY
STYLE PRICE POINT
SKU
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MERCHMERCHANDISE CATEGORY
6/28/2011
TYPE

STAPL/BASIC

FASHION MERCHENDISE
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SEASONAL MERCHANDISE
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FAD
MERCHANDISE
WHAT IS VISUAL
MERCHANDISING???????
Visual merchandising is the activity of
promoting the sale of goods, especially by their
presentation in retail outlets.(New Oxford
Dictionary of English, 1999, Oxford University
Press). This includes combining products,
environments, and spaces into a stimulating and
engaging display to encourage the sale of a
product or service. It has become such an
important element in retailing that a team effort
involving the senior management, architects,
merchandising managers, buyers, the visual
merchandising director, industrial designers, and
staff is needed.
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PURPOSE & VARIANCES
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Many elements can be used by visual merchandisers
in creating displays including color, lighting, space,
product information, sensory inputs (such as smell,
touch, and sound), as well as technologies such as
digital displays and interactive installations.
Planogram, Window Displays, Food
Merchandising are the component of VM.
Making it easier for the shopper to locate the desired
category and merchandise.
Making it easier for the shopper to self-select.
Making it possible for the shopper to co-ordinate &
accessorize.
Informing about the latest fashion trends by
highlighting them at strategic locations
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
PROCESS OF
VISUAL MARCHENDISG
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VISUAL
MERCHANDISING(TRADITIONAL SHOP)
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CATEGORY MANAGEMENT
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“Category” is distinct,manageble group of
products/service that consumer perceived to be
inter-related or substitutable in meeting
consumer need.
Category management….” is retailer-supplier
process of managing categories as
SBU(STRATEGIC BUSINESS UNIT),producing
enhanced result by focusing on delivering
consumer value”
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CAREER IN MARCHENDISING
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CAREER IN MERCHENDISING
6/28/2011
Merchandising & Buying is often termed as a
combination of art & statistic. it a key function for
any retailer as this department for the procurement
of MERCHENDISE to be sold in the store by sourcing
it from vendor or manufacturer.
KRA….. 1) SELECTION OF VENDORs
2) COSTING OF MERCHENDISE PROCURED
3) ALLOCATION OF MERCHANDISE TO THE
STORE
4)Developing distribution plan & calculating
gross margin
REQUISIT SKILL….. Should be mobile and can
undergo extensive travelling to locate vendors and
merchandise for store.
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CAREER IN VISUAL MERCHANDISING
6/28/2011
It is largely associate with creating the look of the
store. The increase in competition has necessitated
retailers to differentiated from their competitors.
While product and Service are the primary methods of
differenciation,VISUAL MERCHANDISING is fast
becoming an area of differential advantage. As it is
believed that attracted displays STIMULATE, which
in turn increased sales.
KRA……..1) Total merchandise or service penetration.
2) Overall business image, building and
placement of design elements.
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