Page 200 - DMGT554_RETAIL_BUYING

Unit 12: Merchandise Pricing

Notes
The valuation of the assets had to take into consideration the liquidation context in which
the company found itself. In a non-liquidation scenario, disposal of these assets in an
orderly manner might have brought a cash sale well in excess of $500,000. However, the
deep discounts brought about by liquidation reduced the valuation results to approximately
$125,000.
The intangible asset team, after the inventory and valuation was complete, then moved to
assist in the disposition of the assets. Over the following year, many of the assets described
were sold, and the company was able to generate substantial value from them.

Questions:
1. Study and analyze the case.
2. Write down the case facts.
3. What do you infer from it?

Source: http://www.consor.com/intellectual-property-advice/service-merchandise-case-study.html
12.4 Summary

 A planogram is often received before a product reaches a store, and is useful when a
retailer wants multiple store displays to have the same look and feel. Often a consumer
packaged goods manufacturer will release a new suggested planogram with their new
product, to show how it relates to existing products in said category.

 Today, planograms are used in a variety of retail areas. A planogram defines which
product is placed in which area of a shelving unit and with which quantity. The rules and
theories for the creation of a planogram are set under the term of merchandising

 One can see the varieties of planogram results by simply visiting a local supermarket. The
ultimate effectiveness of the planogram of course is always measured by sales volume.

 Small software packages on a lower price level can be used for a creation/drawing of
shelving units with some basic features of planograming.
 Other software producers are concentrating on improving the rendering of planograms,
in 3 dimensional perspectives for example.
 In the fashion sector, the approach is somewhat different as the “look” of the store is
critical to sales conversions. Many planogramming software created for supermarkets
and FMCG are not designed for this type of approach.
 Product development is a time consuming and costly process, for example it takes
approximately nine months for Tesco plc to develop a new product.
 However, in a business environment where customers react favourably to new product
ideas product development is essential if a retailer wishes to offer a wide variety of
contemporary products to the customer.
 In a new-task situation, many product management personnel will be involved either
directly or indirectly, whereas straight re-buys may well be carried out by one member of
the team (the assistant buyer, for example).

 In retail buying, the user is a retailer’s customer, or potential customer. It is difficult to
involve customers directly in retail buying decisions, so a decision making unit must
consult market research sources and retail sales personnel to obtain an accurate
representation of the customer’s viewpoint.

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