Merchandising is a process involving developing, securing and managing the merchandise mix to meet the firm’s marketing objectives. The merchandise mix stands for the retailer’s total offering, be it goods or services or both. The merchandising process is a three tier structural set of activities. The following configuration gives the idea of merchandising process.
The first stage or tier is to do with developing the merchandise-mix which is composed of two elements namely product and service-mix. The second stage or tier is securing the merchandise-mix which involves two highly skillful and specialized activities namely the buying process and the procurement process. Here, the retailer determines “from where”, “when” and “how” to get products into the stores. The third and the final stage or tier in the merchandising process is managing the merchandising-mix which is to do with planning and controlling the merchandise to ensure efficient, profitable operations.
Retail Merchandise Planning
Merchandise planning consists of establishing objectives and devising plans for obtaining those objectives. The planning process normally includes both rupee planning in terms of merchandise budgets and unit planning in terms of merchandise lists. The overall objective of merchandise planning is to satisfy both the customer’s merchandise needs and the retailer’s financial requirements. To attain that objective, the retailer must devise merchandise plans that create an acceptable balance between the merchandise inventories and sales. This inventory to sales balance requires the retailer to plan each merchandise category carefully regarding (1) Inventory investment (2) Inventory assortment and (3) Inventory support. “Inventory investment” involves planning the total rupee investment in merchandise so that the firm can retire its financial objectives. “Inventory assortment” is a planning the number of different product items such as brand, style, size, colour, material, and price combinations that retailer should stock within the particular product line and determining whether this assortment is adequate to meet the merchandise selection needs of the firm’s targeted consumers. “Inventory support” refers to planning the number of units the retailer should have on hand for each product item to meet the sales estimates.