Page 171 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes 9.12 Keywords

Assortment: A collection containing a variety of sorts of things.
Cross Merchandising: It is the technique in which similar items are grouped together.

Horizontal pricing: This practice involves agreements between manufacturers, wholesales and
retailers to set prices. Such agreements usually are illegal under Indian sales laws.
Inventory: A company’s merchandise, raw materials, and finished and unfinished products
which have not yet been sold.
Mark-down: This is a most common technique to push retail sales that offers particular
merchandise at a price lesser than the merchandise marked price (normal price).

Merchandise: Goods bought and sold in business.
Price Discrimination: A pricing practice where different prices are charged from different retailers
for the same merchandise and same quality.

Psychological pricing: This is used when prices are set to a certain level where the consumer
perceives the price to be fair.
Vertical Price Fixing: A practice where manufacturers or wholesalers seek to control the retail
price of their merchandise through some sort of agreements.

9.13 Review Questions

1. What is the significance of proper merchandise presentation? What is cross-merchandising?
2. What do you mean by assortment? Discuss the assortment planning process in brief.
3. What are the objectives of pricing for any company?

4. Explain the cost and demand factors that affect pricing decisions.
5. Discuss the concept of price sensitivity and its relevance for retailers.
6. Contrast the cost based, demand based and competition based pricing strategies.
7. What is psychological pricing? Determine its effectiveness.
8. Discuss various mark-down strategies.

9. Explain the process of Merchandise Planning.
10. Being a merchandiser, highlight your experience when you came up with an idea that
benefited a company.
11. Elucidate “The merchandise management process allows the retail buyer to forecast with
some degree of accuracy what to purchase and when to have it delivered”.
12. A food departmental store desires a minimum 25 percent mark-up at the retail outlet. If a
150 gm butter cake should sell at ` 20, what maximum price the store can afford to pay the
suppliers?
13. Study various factors influencing price and prepare a brief report on it. Which one is most
influencing and which one is least?
14. In assortment planning we use store grades as a way to reduce the number of decisions we
have to make. Why?
15. Is there any function of retail strategy other than mentioned in the text?

166 LOVELY PROFESSIONAL UNIVERSITY