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Final

RMG 400 Study Guide - Final Guide: Electronic Data Interchange, Affinity Analysis, Gross Margin


Department
Retail Management
Course Code
RMG 400
Professor
Janice Rudkowski
Study Guide
Final

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RMG400 FINAL EXAM NOTES FALL 2017
Final Exam Notes
Retailing
All the business activities involved in the selling of good and services to the ultimate consumer
Buying
The business activity that involves selecting and purchasing products to satisfy the wants and needs of
consumers.
Buying includes complex decision making in areas such as:
Forecasting the wants and needs of consumers
Planning merchandise assortments to satisfy consumer wants and needs
Selecting vendors from whom to purchase merchandise
Negotiating contracts with vendors
Pricing merchandise
Keeping sales and inventory records
Reordering merchandise
Marketing Concept
The belief that all business activities should be geared toward satisfying the wants and needs of consumers.
Retail Strategy
an overall framework or plan of action that guides a retail
Market Segment
A group of potential customers who have similar needs or other important characteristics
Market Segmentation: Diving the total market into segments, this is done to identify and serve a particular group of
customers with common characteristics
Data Typically Used
Demographic Data
Geographic Data
Behavioristic Data
Psychographic Data
Types of Target Marketing:
Niches: Smaller segments in a target market
Undifferentiated: is the retailers attempt to please all consumers.
Concentrated Target Marketing: Focuses on one segment of the market
Multi-Segment: Focusing on more than one consumer segment
Direct Marketing
Consists of direct connection with carefully targeted individual customers, to both obtain immediate response,
and cultivate lasting customer relationships
Trends and Challenges Facing Retailers Include:
The economy: retail buyers must continue to control their inventories and buy the right merchandise for their
customers; they must continually monitor the pulse of the economy
The customer: Customers are changing at an alarming rate, so retail buyers need to cater their efforts to properly
meet their wants and needs
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RMG400 FINAL EXAM NOTES FALL 2017
The store: Shoppers are beginning to lean towards e-commerce, this pushes retailers to invest more into providing
their customers with an exciting shopping experience
E-Commerce
Sales through the internet continue to grow, showing that the internet has great potential in the future
Information technology(IT)
Technology today can not only tell retailers what to sell, it can tell them how to sell it and how to keep it sold.
Database Marketing
Let’s retailers develop programs that provide ongoing intelligence based on tracking and analyzing customer
behavior
Customer Database
An organized collection of comprehensive data about individual customers or prospects, including demographic,
geographic, behavioristic, and psychographic data
Basic Merchandise
Those products that the retailers always want to have in stock. Basics tend to have stable consumer demand, so
sales vary little from year to year
Fashion Merchandise
Requires much greater reliance on forecasting consumer demand and market trends.
Assistant Buyers
Considered buyers in training
Tasks Include
Prepare daily reports to identify best sellers and slow sellers
Replenish basic stock
Complete markdown records and reports
Review inventory records
Follow up with vendors on merchandise orders to ensure prompt delivery
Merchandise Managers
Merchandise managers set the direction of styles, product lines, and image for their area and oversee its budget,
but their major duty is to supervise buyers and allocate resources among them
Their duties are divided into 4 areas:
Planning
Directing
Coordinating
Controlling
Characteristics of Good Buyers Include:
Enthusiasm
Drive
Vision
Goal-setting ability
Ability to work under pressure
Creativity
Human relations skills
Communications
Leadership
Merchandising knowledge and skills
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find more resources at oneclass.com

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RMG400 FINAL EXAM NOTES FALL 2017
Education
Analytical Ability
Computer literacy
Experience.
Evaluating a Buyer’s Performance
Quantitative performance measurements.
Net sales
Individual markup percentages
Cumulative markup percentages
Markdown percentages
Gross margin percentages
Open-to-buy
Stock to sales ratios
Stock turnover
Profit percentage
Different Types of Products
Soft Lines: Typically, the apparel and accessory product categories and fashions for the home such as linens,
curtains, and bathroom items
Hard Lines: Includes product categories such as, hardware, sporting goods, appliances, furniture, toys, and lawn
and garden products
Department Stores
Businesses that sell all kinds of merchandise for the individual and the home. These stores typically offer a wide
assortment of merchandise and services organized into departments based on product categories
Discount Department Stores
Emphasize on one stop shopping to meet the needs of all family members and appeal to consumers who value
savings over service
Centralized Buying
Occurs when all buying activities are performed from the store's central headquarters
Allows a steady flow of merchandise to the store because buyers are able to spend more time in the market
Sales forecasts are more reliable for each separate store
Types of Centralized Buying
1. Central Merchandising Plan: A central office representing a group of stores has complete responsibility for the
selection and purchase of merchandise for all the stores
2. Warehouse Requisition Plan: attempts to overcome some of the limitations of the central merchandising plan,
however, it is typically used only by stores carrying basic merchandise
3. Price Agreement Plan: centralized buyers still select the merchandise assortment, and they also select the vendors
from which each store will make purchases
Drawbacks of Centralized Buying
Adjusting merchandise selection for local conditions may be difficult.
Timing of seasonal goods also varied from one part of the country to another.
Can lead to a lack of cooperation between buyers and store managers.
Makes it difficult to maintain enthusiastic and knowledgeable sales associates.
find more resources at oneclass.com
find more resources at oneclass.com
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