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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