tailieunhanh - Lecture Management of retail buying – Chapter 4: Merchandise assortments

In this chapter, you will learn about: The different types of brand identification, their potential benefits & challenges, the importance of private-label merchandise in today’s marketplace, theories about the optimum breadth & depth of assortments,. | Ch. 4: Merchandise Assortments The different types of brand identification, their potential benefits & challenges The importance of private-label merchandise in today’s marketplace Theories about the optimum breadth & depth of assortments How demand and selection factors, seasons & (in apparel) size, fashion, & fit all work to influence assortment & buying patterns Setting policies about assortments for buyers to work from Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved This is the topic overview found at the beginning of Chapter 4. Private-Label Brands PROS CONS Store image issues may backfire with consumers: second-rate, “off-brand” items Less financial support from competitive manufacturers Greater difficulty ensuring quality, product consistency Strained relationships with manufacturers’ other retailers Lower profit margins for manufacturers More variety for consumers Specialty and ethnic item availability Cost advantages Increased customer loyalty Better profit margin for retailers Positive store image for “specially selected” items Increased shelf space for some manufacturers Good alternative to pricey “name brands” for smaller retailers Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Almost every retailer will be offered an opportunity to create private-label products or product lines. Here are some of the major considerations for consumers, sellers and/or manufacturers of these products. Assortment Planning: Terms to Know Breadth and depth (“wide and shallow,” “deep and narrow”) Model stock Balanced assortment Pulling power Net marginal productivity Dominant (or “competent”) assortment Demand rigidity Classification Classification controls Product life cycle Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved An assortment is the range of choices available to a customer for a particular type of product for clothing, as an example, the sizes and colors in which a particular item is available. With only so much money and shelf space, planning each assortment with the target customer in mind is key. Demand Rigidity Factors The product’s primary or intended use. Secondary considerations – “Wants” that, if necessary, may be substituted. Purchase habits typical of this type of product – Is it a convenience or a necessity? Price lines – Both high-end and bargain prices are considerations here. Urgency – How soon is it needed? This determines how selective the shopper can be. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Demand rigidity refers to just how firm the customer’s selection factors may be – how willing he or she is to change his or her mind or accept something a little (or entirely) different under certain circumstances. Setting Assortment Policy The nature of merchandise carried in the store Characteristics of the trading area Community needs and special attributes that might meet them Comparisons to competitors A price line that fits the target customers Availability of capital Realistic view of merchant’s capabilities Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved When creating written policies about assortments, take these critical factors into consideration.