Chapter 4 Merchandise Characteristics w example answers case 23

Chapter 4Merchandise Characteristics : 

Chapter 4Merchandise Characteristics Professor Domenick Celentano http://kean.domenickcelentano.com/ MKT 3610 Retail Buying and Merchandising Fall 2010

The 5 R’s of Merchandising : 

The 5 R’s of Merchandising We always frame what we learn throughout the semester against the 5 R’s: Right Product Right Time Right Quantity Right Price Right Place Dom’s sixth “R” Right Assortment

Product Mix : 

Product Mix Characteristics and Types of Merchandise What Role do they play in the Retail Merchandise Mix Convenience Goods Shopping Goods A consumer usually compares a variety of attributes, including suitability, quality, price, and style. Homogeneous shopping goods are those that are similar in quality but different enough in other attributes (such as price, brand image, or style) to justify a search process. These products might include automobile tires or a stereo or television system. Homogeneous shopping goods are often sold strongly on price.1 Specialty Goods Impulse Goods 1. http://www.britannica.com/EBchecked/topic/365730/marketing/27286/Shopping-goods

Category Role Why Is It Important? : 

Category Role Why Is It Important? Brands & Retailers need to address this as part of Category Management: How is the category positioned against the retailers’ portfolios of categories? Prioritizes categories surrounding other categories. Aisle Management. How will you use the category to achieve overall business objectives?

Consumer-Based Category Roles : 

Consumer-Based Category Roles Determine if your category is a Destination Routine Occasional/Seasonal Convenience (a category may be more than one) Justify your determination. How will you and the brand use the category to achieve overall business objectives?

Consumer-Based Category Roles : 

Consumer-Based Category Roles Destination To be the primary category provider and help define the retailer as the store of choice by delivering consistent, superior target consumer value Example: Wine, Soda

Consumer-Based Category Roles : 

Consumer-Based Category Roles Routine To be one of the preferred category providers and help develop the retailer as the store of choice by delivering consistent, competitive target consumer value Example: Paper Goods

Consumer-Based Category Roles : 

Consumer-Based Category Roles Occasional / Seasonal: To be a major category provider, help reinforce the retailer as the store of choice by delivering frequent, competitive target consumer value Example: Pumpkin Pie, Charcoal

Consumer-Based Category Roles : 

Consumer-Based Category Roles Convenience: To be a category provider and help reinforce the retailer as the store of choice by delivering good target consumer value Example: Batteries

Category ManagementProduct Mix : 

Category ManagementProduct Mix

Comparison Chart : 

Comparison Chart

Category Strategies : 

Category Strategies Turf Protecting Traffic Building Image Enhancing Transaction Building Excitement Building Profit Building

Implementation Matrix : 

Implementation Matrix

Walmart : 

Walmart Win – Leader - Specialty Place – Routine – Shopping Goods Show – Convenience - Convenience Definition Win Place Show betting are the core elements of any horse racing event. The object is simple: pick a horse that will win the race, that will place second, or will come in third (or show).

Price Levels : 

Price Levels

Slide 16: 

Northeast US “Retailer X” Example – 20 Foot Section Italian Sauces: Sample Planogram Ragu - National Bestseller at Head of Category Flow; Vertical “Brand Block” # 2 Category Brand in “Anchor Position” at End of Category Flow Private Label (Store Brand) Positioned Immediately Adjacent #1 Brand for Max. Traffic Premium Brands (Victoria) Merchandised on Top Shelf for Asset Control; Reduced Capacity Minimizes “Shrink Risk” Regional Players Shelved Centrally and at “Eye Level” for Maximum Visibility There’s Much More Than “Meets The Eye” To Effective Shelving and Merchandising Positioning of Brands and Product Types Are Carefully Strategized to Maximize Sales, Profits, Item Capacity and Inventory Control

Quality : 

Quality Intrinsic characteristics are those which an object has by its very nature Extrinsic characteristics are those which an object has solely in relationship to other objects and/or its environment. Lets discuss what quality factors are to you

Positioning Chart : 

Positioning Chart

Aspirational / Lifestyle Brands : 

Aspirational / Lifestyle Brands aspirational brand (or product) means a large segment of its exposure audience wishes to own it, but for economical reasons cannot. An aspirational product implies certain positive characteristics to the user, but the supply appears limited due to limited production quantities.

Slide 20: 

"Absolute Luxury," including Chanel, Hermes, Harry Winston, and Brioni The brands that may be in BIG trouble are those known as "Aspiration Luxury brands." These include Louis Vuitton, Burberry, Tiffany, and Gucci, for example. These are brands that attract middle and upper-middle income shoppers hoping to have a taste of the good life. Louis Vuitton, Tiffany, and Burberry have also started a mass expansion of their retail outlets. Hurt by those who are trimming their spending the most. The third tier of luxury brands known as "Accessible Luxury," includes brands like Ralph Lauren and Coach.

Benefits LadderLifestyle Brands? Aspirational Brands? : 

Benefits LadderLifestyle Brands? Aspirational Brands? Find a YouTube Commercial you feel focuses on the Belief and/or Emotional Connection to the product or Brand Copy and Paste the URL into the comments box of the blog Be prepared to discuss in class why the commercial represents a high degree of Belief / Emotion

What are Store Brands : 

What are Store Brands Store brands, Own Brands, Private Label, Private Brands, different names, same meaning Brands that are owned by the Retailer and are created to support the Retailer Strategy They can be branded With Store Banner Unique brand names representing attributes and benefits attractive to the consumer

What are store brands : 

What are store brands They are products that stores put their own names or brands on. Also may be called private label, private brand, own brands, etc. Commonalties to national brands Manufactured and positioned with the same disciplines as national brands Shelf positioned next to national brands

Walmart : 

Walmart Genuine Steak House Brand

Lifestyle Brands : 

Lifestyle Brands

Group Case Work : 

Group Case Work Case 23 The following 3 slides are examples of the level of detail you should consider in writing future case reviews

Case 23 The Knockoff : 

Case 23 The Knockoff Alternative Solutions Do not purchase any more knock-off shirts from the new vendor and contact the original shirt vendor to try to amend their partnership. Advantages • She would continue with a winner; it was highly successful and should continue to be. • The buyer acted within the guidelines of the store’s policy. • The buyer’s first loyalty is to the store, not to the manufacturer, and sales are the objective. Disadvantages • There is a probable loss of a key resource—short-term gain, long-term loss. • The buyer may feel a sense of guilt by repaying cooperation from the original vendor with disregard for an ethical relationship.

Case 23 The Knockoff : 

Case 23 The Knockoff Alternative Solutions Go ahead with continued purchasing from the knockoff house and do not worry about the merchandise manager’s request to get the original resource partnership back Advantages • She would continue with a winner; it was highly successful and should continue to be. • The buyer acted within the guidelines of the store’s policy. • The buyer’s first loyalty is to the store, not to the manufacturer, and sales are the objective. Disadvantages • There is a probable loss of a key resource—short-term gain, long-term loss. • The buyer may feel a sense of guilt by repaying cooperation from the original vendor with disregard for an ethical relationship

Case 23 The Knockoff : 

Case 23 The Knockoff Alternative Solutions Search the market for another sportswear promotion to replace the one that was in the works from the national brand house that threatens to discontinue business. Advantages • The buyer would not be losing anything from the broken relationship. • The buyer would not be succumbing to pressure from a vendor to direct how she does business. • The store would succeed in meeting their promotional objectives. Disadvantages • There is a possibility that a replacement promotion cannot be obtained and so potential loss of sales. • This may jeopardize the store’s reputation among resources in the market, which could hurt future arrangements with others.

Case Presentations : 

Case Presentations Knockoffs Private Brands

Class Case Presentations : 

Class Case Presentations Knockoffs vs. Brands Private Brands vs. National Brands We always frame what we learn throughout the semester against the 5 R’s: Right Product Right Time Right Quantity Right Price Right Place In addition to the Major Question, tie in on of the 5 R’s to each of your two presentations

Chapter 4Merchandise Characteristics : 

Chapter 4Merchandise Characteristics Professor Domenick Celentano http://kean.domenickcelentano.com/ MKT 3610 Retail Buying and Merchandising Fall 2010