Page 149 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes Objectives

After studying this unit, you will be able to:
 Define merchandise and merchandising

 Discuss methods of merchandise presentation
 State the assortment planning process
 Explain the concept of inventory
 Identify the pricing objectives ad factors that affect pricing

 State the concept of price sensitivity
 Discuss various pricing strategies
 Explain the concept of psychological pricing and markup and markdown strategies

Introduction

The efficiency of a retail store is based on the retailer’s ability to provide the right goods of good
quality to the consumer, in the right quantity, at the right place and at the right time. The entire
process of retailing depends on efficient inventory management. In this unit, you will learn to
plan merchandise and merchandise budget.
In the large retail store, we find a dizzying array of goods to clothe our bodies, decorate our
homes and entertain our families. All of this merchandise comes in a variety of sizes, colors,
makes and models. Bringing it all together requires the successful coordination of numerous
individuals and divisions, including buyers, warehouse employees, financial staff, store
operations, etc.
Yet, merchandising takes top priority. It doesn’t matter how efficiently the other departments
are operating. If merchandising is not firing on all cylinders, the company merchandising is not
firing on all cylinders, the company cannot succeed.

The merchandise management process allows the retail buyer to forecast with some degree of
accuracy what to purchase and when to have it delivered. This will greatly assist the company in
attaining its sales and gross margin goals. Buyers must rely heavily on historical sales data,
coupled with personal experience and their own intuition about market trends.

9.1 Merchandise: Meaning

Merchandise refers to the goods bought and sold in business. Merchandising refers to the activities
aimed at quick retail sale of goods using bundling, display techniques, free samples, on-the-spot
demonstration, pricing, shelf talkers, special offers, and other point-of-sale methods. According
to American Marketing Association, merchandising encompasses “planning involved in
marketing the right merchandise or service at the right place, at the right time, in the right
quantities, and at the right price.”

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