Page 267 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes Site selection, location analysis, layout details
Design promotional strategy
Strategic management is completely under the domain of top management. There can be
circumstances where advisors or consultants are hired by the retailing firm in this regard. Firms
need highly experienced and qualified professionals to take such high level decisions. Here it is
worth mentioning that in small sized family owned retail businesses strategic decisions generally
are a family affair.

Merchandising

Merchandise sourcing is the prime task of every retail organisation sourcing of merchandise is
the major component of merchandising process as a whole. For sourcing of merchandise a
retailer has to go through the following steps:

Search for vendors dealing with the specific merchandise
Based on specific requirements valuate each vendor
Negotiate terms and conditions with them
Place orders

Examine quality of goods received with negotiated specifications
Communicate grievances if any/follow up
Make payments
After the merchandise is acquired a retailer needs to take full care since it’s the single most
valuable input in retail. A retailer can prepare and implement a merchandise control plan. This
process includes the following steps:

Based on past experience develop a merchandise budget
If it’s a chain store allocate merchandise to stores
Review stock position and merchandise off take.
These processes need seasoned personnel with years of experience. Here the need is for an
experienced person rather than high qualification.

Did u know? Strategic management is completely under the domain of top management.
Finally the most critical task in merchandising is pricing the merchandise. A retailer has to have
complete information about existing price ranges in the market. In the present day competition
is so intense that a small error in the pricing could lead to loss of sale as well as long term
reputation of the firm.

A retailer may have to adjust his prices based on the market feedback. Generally the pricing task
is done by the top management or by the owner himself in case of small scale or family owned
retail firms. However it’s worth mentioning that the shop floor level staff plays a big role here.
They are in direct contact with the customers. Thus they can predict the best saleability of the
merchandise at a given price. Besides this they are competent to state an ideal price for given
merchandise.

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