Merchandise management.ppt

Dr, Gopal Thapa's merchandise management

1. Merchandise Management
Dr. Gopal Thapa
TribhuvanUniversity

2. Merchandise Management
Goods well bought are half sold
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3. Merchandise is the goods which are for sale or
which have been sold
Dictionary of Marketing
Development and implementation of a
merchandise plan is one of the most important
phases in any retail strategy
In order to be successful, retailers must make
competent decisions over what is to be bought, in
what quantitiesand at what time.
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4. Merchandise management
Merchandise is the goods which are for sale or which have
been sold
Dictionary of Marketing
Merchandise management is the planning and
implementation of the acquisition, handling and
monitoring of the merchandise categories for an identified
retail organization
David Gilbert
Merchandise management is the analysis, planning,
acquisition, promotion and control of merchandise sold by
a retailer
Dictionary of Marketing
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5. Merchandise management
Merchandise management focuses on the planning
and controlling of the retailer’s inventories.
The role as to balance the financial requirements
of the company with a strategy for merchandise
purchasing.
As merchandise has to be acquired for future
purchase opportunities, forward planning is
needed in relation to changing consumption tastes
and demand
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6. Merchandise management
There is a need for acquisition from either
wholesalers or manufacturers and for the
merchandise to be handled in an appropriate way
to ensure it is able to be sold in perfect condition.
As the financial aspects of buying merchandise
can be treated as an investment decision, there is
the final aspect of monitoring all aspects of the
process to ensure adequate returnsare achieved
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7. Category
A category is an assortment of items that the
customer would broadly perceive as being
substitutes for each other while reflecting the
extent of possible variants.
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8. Availability
Availability is an important concept
Availability is based upon the need to ensure that
the level of stock required meets the demand from
the customer
The notion of availability introduces a need to
manage the reorder cycle on an efficient basis
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9. Inventory Turnover (Merchandise
Stock-turn)
Inventory turnover concept allows us to work out
how long inventory is on hand prior to it being
sold
Inventory turnover
= Net sales
Average inventory at retail store
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10. Methods of Planning and
Calculating Inventory Levels
Basic stock method of planning inventory
Percentage variation method
Week’s supply method
Sales to stock method
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11. Basic stock method of planning
inventory
Beginning of the month stock (BOM)
= Planned monthly sales + Basic stock
Where, basis stock = (a) –(b)
(a) Average stock for season
= Total planned sales for season
Estimated inventory turnover
(b) Average monthly sales
= Total planned sales for season
Number of months
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12. Percentage variation method
Beginning of month planned inventory level
=Planned average monthly stock for season ×1/2
[1+ Estimated monthly sales ]
Estimated average monthly sales
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13. Week’s supply method
BOM Stock
= Average weekly sales ×No. of weeks to be
stocked
Where, average weekly sales
= Estimated total sales for the period
No. of weeks
No. of weeks to be stocked
= Number of weeks in the period
Stock turnover rate for period
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14. Sales to stock method
Shrinkage
Mark down
Employee discount
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15. Merchandiser Skills and Profile
Effective communicator
Interpersonal skills
Advanced numerical capacity supported by PC
literacy
Administrative competence
Relationship with buyers
Budgeting
Planning and controlling retail activities
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16. Managing variations in demand
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