Page 180 - DMGT550_RETAIL_MANAGEMENT

Unit 10: Inventory and Product Availability Levels

4. Combine the importance and performance scores Notes
5. Add all to arrive at the brand scores.

Task Discuss about Multi-attribute method.

Self Assessment

Fill in the blanks:
5. ........................... is a process for determining the share of each purchase order to be allocated
to individual stores.
6. The goods receiving module captures all goods deliveries, either to the ........................... or
to the stores.

7. Most ........................... management systems provide a replenishment module that generates
suggested replenishment quantities.
8. A sell through analysis is a comparison between actual and ........................... sales to
determine whether early markdowns are required or whether more merchandise is needed
to satisfy demand.

10.5 Developing and Sourcing Private Level Merchandise

To differentiate their offerings and build strategic advantages over competitors, most retailers
are devoting more resources to the development of exclusive products—whether products that
the retailer designs (private labels) or exclusive brands produced for the retailer by national
brand manufacturers. For example, Ralph Lauren has developed American Style brand for JC
Penney, and Estée Lauder has developed the American Beauty cosmetic line for Kohl’s.
Retailers are placing more emphasis on developing their brand images, building strong images
for their private-label merchandise, and extending their images to new retail formats. These
exclusive brands, as the term implies, are only available from the retailer, and thus customers
loyal to these brands can only find them in one store.

Private labelling is the interesting story of a how a segment of products, originally introduced
as low-price alternatives to high-priced brands, is gradually evolving a new brand identity in its
own right—increasingly deployed to build loyalty to stores that have plenty of brand identity
of their own (e.g., Kroger, CVS, Rite-Aid, and many others). Private-label products, often referred
to as “store brands,” are made by manufacturers for stores but carry the store’s rather than the
producer’s label. Sometimes the manufacturer produces solely for the PL market, distributing
the same product with unique labels for different retailers; sometimes the manufacturer has a
well-known brand of its own but sells a portion of its production under private label. When all
else is equal, e.g., the identical product is sold under an established brand and under one or more
private labels, the only real difference between the two is that the branded product carries all the
costs of brand promotion and the PL product carries no such costs at all. The two products, of
course, will have slightly different packaging too, for differentiation. PL products, for this
reason, initially emerged as a way of exploiting a cost differential. They are typically sold at
prices below that of their brand-bearing counterparts. All manner of variations on this theme
exist and have been present. Thus the PL product may be indistinguishable, somewhat inferior,
and (of late) even superior to a branded equivalent. Packaging in the past has ranged from
deliberately unattractive to deliberately eye-catching, including imitative of the leading brand
with which it competes.

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