Merchandising Concepts and Technology
The six constituencies (areas of specialization) in apparel retail firm
What is
Executive constituency
Merchandising constituency
Operations constituency
Finance constituency
Marketing constituency
Supply Chain constituency
The three major components of Taxonomy of Apparel Merchandising Systems(TAMS)
What is
Line planning - the process of determining the merchandise budget and assortment plan for a selling period
Line development - determines the actual styles, sizes, and colors that will fill out the line plan
Line presentation- making merchandise visually available for assessment, evaluation, selection, and purchase
What is the relationship between organizational structure and merchandise planning processes?
Merchandise planning may start at the corporate level in large companies who set budgets and the lower levels do the more detailed merchandise planning.
The taller the organizational pyramid, the more levels of planning. More levels focus on budgets, fewer levels focus on merchandise assortments.
Executive constituency often acts as a moderator among other constituencies; merchandising negotiates conflicts related to the product line
Offering merchandise at a limited number of price points, that reflect differences in merchandise quality is ______
What is price lining?
It is the foundation of a merchandise budget based on forecasting process that determines the percent increase or decrease.
What is planned sales?
The planning, developing, and presenting product lines for identified target markets, with regard to pricing, assortments, styling, and timing.
What is merchandising?
Manufacturers, wholesalers, and retailers must plan, develop, and present product lines.
At what phase in career development is the primary relationship of the person with their fellow workers one of mentoring?
What is senior management?
The key differences between traditional line planning and contemporary line planning are____
What is
no input from consumers in traditional line planning, while for contemporary line planning, customer satisfaction is the main goal
contemporary line planning merchandise budgets and assortment plans are interactive
Why is the net sales the foundation of an income statement instead of gross sales?
What is
Net sales does not includes customer returns and allowances
Gross sales presents a false picture of potential profitability of the firm as it include merchandise that is sold but returned for a refund.
Planning reductions involves______
What is
Markdowns for sales promotions or inventory clearance
Employee discounts
Inventory shortage due to
◦shoplifting
◦employee theft
◦damaged merchandise
recordkeeping errors
What economic and social changes have driven development of merchandising technology?
Economic changes include increase of levels of income in developed countries that support increasing rates of fashion change.
Globalization of apparel markets and supplies has facilitated consumer demand for rapid distribution of products.
Electronic conveniences in every phase of life create similar expectations for speed of service
According to industry informants in Kunz’s Taxonomy of Merchandising Careers, advancement in apparel merchandising careers is frequently based on_______
What is
job performance; recognizing the need for self-marketing; being involved with a mentor; and the intent of the organization toward the individual.
Why are merchandise classification systems carefully structured?
The classification system provides a means of communication among merchandisers and among constituencies relative to the product line.
Initial markup is calculated as a percentage of____
What is first price?
Why should the merchandise-to-receive number be larger than planned sales?
What is
The merchandise to receive number has to be larger than planned sales because revenue from sales is less due to reductions.
Merchandise to receive provides enough merchandise to achieve planned sales in spite of reductions
The importance of smart tags in the supply chain
What is Radio frequency identification (RFID) tags that facilitate the flow of information from the retail sales floor back to retail inventory managers
All partners in business know what customers are buying right away
What strategies could help control the time (number of weeks) required to complete the merchandising process?
What is investment in supply chain strategies and merchandising technology?
_____ involves determining the quantities of each product that will be purchased to fit into the overall merchandise plan.
What is Assortment planning?
Detail of color, size, brand, materials, etc. have to be specified . i.e. specify the number of pieces per size per color for each style or product variety
The ______ is determined by the wholesale price offered by the manufacturer or the cost estimates provided by product developers and sources of privately developed merchandise.
What is planned cost?
Why should a merchandise budget be dynamic as opposed to static?
What is
A dynamic budget can respond to currently developing market conditions that will influence rate of sale of merchandise.
_____ is complex, multi-directional network of “partnering” business relationship to reduce time to market and use collaborative decision making to increase sales.
What is the supply chain/merchandising technology systems?
Which theory proposition is that the business firm is made up of a coalition of individuals with common goals?
What is the Behavioral Theory of Apparel Firm
How might price be used in structuring assortment dimensions?
Level of price is a primary element in organizing an assortment. List price may be used as a foundation of setting up price lines.
Price is used as a measure of quality
What makes pricing strategies fundamentally different?
What is
The timing and amount of markup and markup cancellations and the timing and amount, purpose, and frequency of markdowns and markdown cancellations
Planning inventory during the selling period.
What are the advantages and disadvantages of placing orders more frequently? Of shorter lead-time? Of automating an ordering system?
The advantages of frequent order, shorter lead-time, and automating an order system are to make adjustments for merchandise plan errors.
Disadvantages include the time and analysis required to place the appropriate orders.
Shorter lead times mean the orders can be placed closer to the time merchandise is needed on the selling floor.
A related challenge is having accurate data so reorders are correctly stated in terms of styles, sizes, and colors