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RMG 200 (77)
Brent Barr (15)
Lecture

ch 9 part 1

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Department
Retail Management
Course
RMG 200
Professor
Brent Barr
Semester
Winter

Description
CH 9: PLANNING MERCHANDISE ASSORTMENTS - Merchandise management: the process by which a retailer attempts to offer the right quantity of the right merchandise in the right place at the right time while meeting the company’s financial goals - Assortment plan: list of merchandise that indicates in general terms what the retailer wants to carry in a particular merchandise category ORGANIZING THE BUYING PROCESS BY CATEGORIES The Buying Organization Merchandise Group:(aka general merchandise managers, senior vice preseidents of merchandise and resposible for several departments Department: A segment ofa store with merchandise hat rebeing complmentary.They are managed by divisionalews as merchandise managers whoreport to the vice presidents merchandise, such as pants (as opposed to jackets or suits),f supplied by different vendors Category: An assortment ofitems (SKUs) the customer sees as reasonable substitutes for each other Merchandise Category – The Planning Unit - Merchandise category: an assortment of items that customers see as substitutes for one another - Eg. girl’s apparel, boy’s apparel, infant’s apparel - Priced and promoted to appeal to similar target market Category Management - Category management: the process of managing retail business ith the objective of maximizing the sales and profits of a category - Two reasons for adopting category management: o It is ultimately responsible for the success or failure of a category because it is harder to identify the source of a problem and solve it without category management o It is easier to manage to maximize profit using category management. It can help ensure that the store’s assortment is represented by the “best” combination of sizes and vendors, that is, the one that will get the most profit from the allocated space The Category Captain - Category captain: a supplier that forms an alliance with a retailer to help gain consumer insight, satisfy consumer needs, and improve the performance and profit potential across the entire category - Eg. Kraft has a lot of influence on grocery industry - A potential problem with establishing a category captain, is that vendors could take advantage of tier position - Appointing category captain makes the category manager’s job easier and brings the promise of higher profit SALES FORECASTING Category Life Cycle - Forecast: to estimate or calculate in advance; predict the future (short term sales) - Category life cycle: a merchandise category’s sales pattern over time 1. Introduction 2. Growth 3. Maturity 4. Decline Variations on the Category Life Cycle - Fad: a merchandise category that generates a lot of sales for a relatively short time – often less than a month o Illogical and unpredictable - Fashion is a category of merchandise that typically lasts several seasons and sales can vary dramatically from one season to the next - Questions that help buyers distinguish between fads and more enduring fashions are: o Is it compatible with a change in consumer? Innovations that are consistent with lifestyles will endure o Does the innovation provide real benefits? o Is the innovation compatible with other changes in the marketplace? o Who adopted the trend? - Staple merchandise: (aka basic merchandise) inventory that has continuous demand
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