1 TABLE OF CONTENTS
1 INTRODUCTION 4
2 THEORETICAL DISCUSSION 4
2.1 INVENTORY 5
2.2 PRICING AND ASSORTMENT 5
2.3 WHY PLACE SO MUCH EMPHASIS ON MERCHANDISE MANAGEMENT 6
2.3.1 Interception Rate 7
2.3.2 Shopper Syndromes 7
2.3.3 Children as Shoppers 7
3 METHOD APPLIED 8
3.1 Direct (Reactive) Observation 9
3.1.1 Continuous Monitoring: 9
3.1.2 Time Allocation: 9
3.2 Unobtrusive Observation 10
3.2.1 Behaviour Trace studies: 10
3.2.2 Disguised Field Observations: 10
3.3 Conclusion 10
4 OBSERVATIONS 11
4.1 Private Labels 11
4.2 Space 11
4.3 Placement 11
5 OBSERVATIONS 12
6 INTERPRETATION OF FINDINGS 14
7 RECOMMENDATIONS 18
8 CONCLUSION 19
9 Bibliography 19
2 INTRODUCTION
Merchandise management is one of the most important aspects
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The basic unit of analysis for making merchandise management decisions is the merchandise category (Levy & Weitz, 2009), these are groups of items and brands that consumers see as direct substitutes for one another, and for example different brands of milk cheese make up the dairy category. These categories can be managed either by category or by brand; both of these approaches have advantages and disadvantages. The advantages of category management are that management can ensure that the category containing the best combinations of vendors or brands and sizes.
Store layout with regard to merchandise has a direct impact on the positioning of the store. The retailer needs to decide how much store space to allocate towards a specific product category and how much space must be allocated towards isles and advertising space. This is especially important with regard to seasonal products such as Easter Eggs or other Easter merchandise. The differences in the placement of these seasonal items between the different Spar shops will be used to determine the difference in sales of those items.
3.1 INVENTORY
Increasing inventory turnover is a cornerstone to improving the sales volume and therefore the net revenue of the retailer. Inventory turnover is especially important for perishable goods such as fruit and vegetables. This is because these types of merchandise quickly turn bad and get damaged after being handled for too long or from being under the
In the past few years, they have experienced a significant increase in inventory days. Not having attractive inventory leads to a decrease in sales and an increase in discounts and write offs leading to further decreases in EBITDA Margins. In 2009, the inventory turnover took 215 days. This is significantly above Le Chateaus competitors, for example Reitman’s inventory took only 72 days (Annual Report 2010). This means it takes Le Chateaus three times as long to sell inventory compared to their competitors. To make matters worse, this trend has been exacerbated in recent years. Le Chateau’s turnover has ballooned to a staggering 341 days while Reitman’s has kept inventory turnover stable at only 76 days.
Last of all, in Marion Nestle essay, “The Supermarket: Prime Real Estate” she states that supermarkets manipulate you on buying extra things you do not need. During her research, she realized there were a lot of different studies for designing the layout of the stores (Nestle 499-500). For instance; Stores do not use a lot of islands, they put certain things in the back of the store and put
In general, a high inventory turnover ratio is better than a low ratio. A high ratio implies good inventory management. A very low level of inventory has serious implications. It adversely affects the ability to meet customer demand as it may mot cope up with its customer requirements.
In this report I will be comparing methods used by two different retailers on how they distribute two chosen products, of my choice, in two different retailing sectors. Seeing as the food and clothing sector both have very different styles of how they meet their product requirements, I will compare Tesco and JD; The products from these two companies itself that I’m going to compare is ‘Tesco Value Bread’ and Nike hoodies.
Layout of Store- A great layout is vital for success. Grocery shopping can sometimes be tedious, so it is essential that the layout makes the process as easy as possible for a consumer. If a customer is having trouble finding things then they might start shopping elsewhere. Also, things that will spoil are usually in the back left of a store because that is where the customer will finish shopping thus reducing the time the product will spend not being refrigerated.
The third element that contributes to a customer’s perception of a store-based firm is the store layout. There are six steps that need to be considered when planning the store’s layout. These steps are the following: allocation of store space, classification or store offerings, determination of a traffic-flow pattern, mapping our in-store locations, and arrangement of individual products. The purpose of a store’s layout is to make shopping as efficient as possible. Customers should find what they are looking for easily while also being persuaded to buy a few impulse items along the
Items in the store are also arranged by their intrinsic properties. For example, the dairy products are in the same aisle as Ice Cream and Yogurt. This arrangement makes for an easy transition for the customer. This layout plays a considerable role in assisting the customer’s visual system to pay attention to the store’s items.
Inventory turnover is currently at 3.6X and slightly better than the industry average of 3.5X. It is also nearly twice as high as its three major competitors. This provides a competitive advantage since there is not a high level of inventory that could be deemed obsolete due to new drug developments or decreased potency. In addition, capital is not tied up in maintaining inventories that do not provide any return.
According to research, the company sold 14 product categories over 200 countries in a total of 476 category-country combinations. The company struggled to allocate marketing resources effectively to deal with high complexity. It can collect data integrally and systematically with a global-level analysis. Besides, it has standardized definitions of data, collection procedures and reporting conventions
The process that should be followed and used is the eight-step category management process. The first step of this process is category definition. This case is focused on the shelf stable juice and juice drink category which consists of Cranberry Juice Cocktail, CranApple, CranGrape, and CranRasberry. The second step of this process is known as category role where we are asked to assign a category role based on a cross-category analysis. The Shelf stable juice and drink category is routine as it is in the store to help develop the retailer as a store of choice, but it is not the primary category provider. The third step is known as category assessment and with the data provided it can be seen that the shelf stable juice and drink category represents over $2 Billion in total US Sales volume annually. When diving more into the subcategories, the cranberry drinks and grapefruit categories alone represent over $750 million in sales volume for Ocean Spray. Taking a closer look, by looking at the data provided, at Stop & Shop, Cranberry makes up 47% of the category share and grapefruit makes up 22% of the share while 31% of the category is other juices and drinks. Step four is category scorecard, here I would want to work with Stop & Shop to create targets and goals that do not just positively impact Ocean Spray, but positively affect their category overall to increase store profits. One target goal I would create is that Stop & Shop should look to
The sales are also dependent on season. Like in summer season demand for juice is increased so they have to increase the inventory for juices and in winter season the demand of coffee is increased so they have to keep inventory on that demanded quantity. If these matters are going smoothly that means there exists no gap in supply side and if there arise problems, inventory turnover is the indicator through which the gap can be analyzed. External environment like uncertain or certain weather conditions may create problems or gaps in distribution system because of delayed supply
In the beginning of the twentieth century, scientific decision-making has been arisen by Herbert A.Simon. There are five areas of scientific decision-making: Target segment, Product strategy, Pricing strategy, Distribution strategy and Promotion strategy. Distribution strategy is a number of firms that try to use different ways to make the product from the origin to the consumer. This essay would show two different alternative strategies of distribution, explain the advantages and disadvantages of the alternative strategies. This essay will mention the author’s opinion as well, since, with the progress of the market, consumers have multifarious ways to choose products and the markets show the multifarious as well. It is necessary to firms make a better decision of marketing types, but the market conditions are changing. For firms, that means they need to face challenge and difficult to make a right way.
The summary of the project will be illustrated explicitly in the following order, what the project is about, objectives of the research, significance of project, how it is interdisciplinary, implications of findings, ethical considerations, methodology used, and findings of report. The research deeply analyses the behaviour of supermarket shoppers in Palmerston North, New Zealand that is affected by the physical positioning of products. The objective of the research is to find out what physical product positioning strategies that are being carried out by New Zealand supermarket stores. Besides, the researcher would like to know the ways that the strategies benefit the
Because customers are going to shop for these goods, a fundamental strategy in establishing stores that specialize in them is to locate near similar stores in active shopping areas, in other words, shopping goods require selective distribution. Ongoing strategies for marketing shopping goods include the heavy use of advertising in local media, including newspapers, radio, and television. Advertising for shopping goods is often done cooperatively with the manufacturers of the goods.
Inventory represents the current amount of goods/products that a company has in stock. The inventory levels usually fluctuate due to the sales rate of a product. Inventory levels determine the increase or decrease in the production for a manufacturer or to order more or less of the product, if it is a stock item for a retail store. Inventory is usually a business’s largest asset and inventory decisions constitute a delicate balance between shortage costs, holding costs and ordering costs. Most companies have a base stock and a safety stock in their inventory. There are various reasons for inventories to fluctuate: