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Chapter 1

by: luke koppa

Chapter 1 AM 270

luke koppa
GPA 4.0

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About this Document

Intro to Merchandising Processes
Merchandising processes
Ruoh-Nan Yan
Class Notes
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This 4 page Class Notes was uploaded by luke koppa on Monday February 15, 2016. The Class Notes belongs to AM 270 at Colorado State University taught by Ruoh-Nan Yan in Winter 2016. Since its upload, it has received 26 views. For similar materials see Merchandising processes in General at Colorado State University.


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Date Created: 02/15/16
  Chapter 1Merchandising Concepts  What is merchandising? o “bridge between design, sales and production” o Collaboration among different departments  o Definition: to buy and sell for a profit  A necessary business process for most types of “products”   Especially critical in the apparel industry   Due to constant change  Merchandising consists of o Planning  o Development o Presentation o Pricing, assortment, styling, and timing o * done all for identified target market   Another interpretation: to have the right goods for the right consumers at the right time in the right quantities at the right prices  Structural Changes in the Apparel Industry o Stage 1:   Owner/CEO  Sales  Manufacturing (focus) o Stage 3  Owner/CEO  Marketing (created due to larger variety of choices for consumer) o Advertising o Sales o Merchandising  design  Manufacturing  Finance/administration o Stage 5  CEO  Marketing o Market research o Advertising o sales  Merchandising o Creative design  Sourcing (from move overseas) o Technical design o Product managers  Manufacturing  Finance/admin  Behavioral Theory of the Apparel Firm (BTAF) o Purpose: To understand how apparel companies operate and what activities are  involved  o Assumptions:  Apparel firm is an internal coalition of individuals that share common  goals  Six areas of specialization  Firm interacts with external coalitions and many environments   External coalitions: Shareholders, competitors, suppliers, etc…  Environments: ecological, political, economic changes  o Internal Coalition­ Areas of specialization  Executive management   Finance   Marketing   Advertising, sales goals, target market definition, market research  Merchandising (profit center)  Research to find what products are needed and use to develop  products  Operations  HR, physical day to day, logistics   Supply chain   Oversee distribution (from product production to consumer)   Quick response­ important for apparel industry due to fast  changing market  o Target Market is the Center   Links all aspects (Exec, Finance, Marketing, Merchandising, Operations,  Supply Chain)  Conflicts may exist between different areas  Components of Merchandising o Line Planning : ongoing process through the merchandising cycle  Evaluate merchandise mix  Forecast merchandise offerings   Plan merchandise budgets   How much, when to markdown  Plan merchandise assortments (inventory management)  Determine delivery and allocation   Analyze and update merchandise plans  o Line development: translate a line plan into real merchandise   Buy finished goods at wholesale markets   MAGIC show in Vegas/NYC  Internal product development   Private label brands   Combination of both   Roundys, Kroger, Nordstrom, Macys  o Line presentation: making goods visible and salable   Internally within a firm   For manufacturers/ private labels  At wholesale levels   MAGIC, SIA, OR…  At retail levels   Consumer level­ window displays, visual merchandising   Dimensions of Product Lines o Prices  Determining price ranges  Setting and changing prices   Evaluating gross margin and related measures  o Assortment   Determining number of styles, colors, and sizes o Styling  Determining look of the products  Consistent with firms image o Timing  Understand marketing, merchandising, and production schedules   Quick response   Responsibilities of the Merchandiser o Market knowledge   Consumers, competitors, trends  o Planning and control   Identify company resources  Marketing vs. merchandising calendar o Product development (PD)  Coordination with design activities o Costing (PD)  Accurate cost estimates  o Interfacing with sales and marketing  o Materials management   Bill of material (PD) o Sourcing  o Interfacing with manufacturing   Garment specifications  Quality expectations and control o Production authorization  Decide what, how much, and when to manufacture   Skills of Merchandiser o Analytical  Computer  Math  o Creative  Design/appreciation for good design  o Intuitive  Decision making skills/quick reaction o Verbal   Communication skills 


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