What is the function of merchandising?

Answer 1

The activity of promoting the sale of goods at retail. Merchandising activities may include display techniques, free samples, on-the-

spot demonstration, pricing, shelf talkers ,special offers, and other point-of-sale methods. According to American Marketing Association, merchandising encompasses "planning involved in marketing the right merchandise or service at the right place, at the right time, in the right quantities, and at the right price."

As a retailer, one of your important assets is 'space'. On the other hand, in numerous situations the quantity of space you have is a limited resource. It needs to be well managed. The first important step in retail merchandising is establishing working relationships with manufacturers who will provide the goods or services that are ultimately sold by the retailer. This type of retail buying involves determining what products will be carried in the retail establishment, negotiating the unit price that will be charged by the manufacturer, and arranging for the delivery of those goods. Depending on the number of units the retailer can afford to purchase at a given time, it may be relatively easy to obtain a discounted unit price, making it easier for the retailer to be competitive in the local marketplace. Once the goods are secured, the retailer must determine the unit price that he or she will assign to the products. In all cases, this retail price will be higher than the cost of purchasing the goods from the supplier. It is this difference between the wholesale price and the retail price that allows the retailer to make a profit and remain in business. Some retailers follow a formula of setting the retail price at a fixed percentage above the acquisition price, while others base the retail pricing on factors such as the desirability of the items and the amount of competition from other retailers in the immediate area.

After setting the retail pricing, the process of retail merchandising moves on to the task known as setup and display. This process is concerned with displaying the goods within the retail setting to best advantage. By using such devices as display windows, elevated platforms, and colorful backdrops to attract the attention of shoppers, the retailer increases the chances of selling units quickly. Setup and display are often considered especially important with fashion merchandising and similar retail settings, in that the visual display is often the key means of attracting customers who are highly likely to make a purchase. Quick sales lead to higher profits and the chance to secure more products that will result in more sales.

Marketing is an important aspect of any retail merchandising strategy. Engaging in a publicity campaign to reach prospective customers may involve something as simple as advertising in local publications as well as electronic advertising on local radio and television stations. Direct mail is also a common strategy in retailing, as the mailings make it possible to reach people in their homes and places of business rather than relying on them to approach the retailer first.

In order to be successful with retail merchandising, it is necessary to provide consumers with a couple of key benefits. First, the products must be of high quality; this helps to ensure the customer will return for more purchases in the future. Along with the quality, the retailer must also sell the products at prices the consumer finds reasonable. By providing quality products at affordable prices, the retailer has a much better chance of standing out from the competition and remaining in business for many years to come.

Function of merchandize

It allows organizations like merchants (retailers) to understand demand based on issues like Demographics, store locations, shelves, and support to purchasing as well as the positioning of merchandise in the retail channel.

Evaluates or creates merchandise plan by trading partner

Creates a category plan

Creates assortment planning

Creates investment buy analysis

Inputs demographic analysis from various sources

Inputs or creates micro-merchandising plans and templates

Inputs or creates plan-o-gram templates

Creates product group or department merchandise plans

Models and evaluates shelf space profit and yield

Links to POS systems for updates and re-plans

Short-term merchandise plan (middle-out planning) during purchasing season to determine replenishment, substitutions, and pricing, Creates a forward weeks of supply plan based on current performance, such as rate of consumption, future market downs, inventory turns, and profit objectives

Answer 2

There is a vast number of functions of merchandising. Some of these include product development, booking orders, confirming deliveries, sampling, lab dips, and preparing internal order sheets.