merchandising class3 (1)

8/3/2019 Merchandising Class3 (1)

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Introduction


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Merchandising is generally defined as a set of activities

designed to provide the right goods at the right placeat the right time through the right medium at theright price in the right mix of the right quality fromthe right source in the right quantity as per the

requirements of the business.

It ensures that the smooth occurrence of any activity isnot hindered for want of any material or service.

What is Merchandising ??


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The term Merchandising in fashion

retailing refers to the total process ofstock planning, management and

control. The job requires highly

developed numeric skills and an innateability to spot trends, relationships and

co-relationships within regular salesand stock figures.


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The merchandisers job combines

support for the buyer (in terms ofproviding the buyer with

information) with responsibility foreffectively managing the flow of

stock into and around the businessafter the suppliers have completed

the range.


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The merchandiser ensures that the businessde-risks itself by making the best decision at a

point of time.De-risking refers to the process of optimisingsales performance and minimising stock risk,

by making informed decisions.

Tip: Stock is money- it must be in theright quantity, in the right place at the

right time.


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Main areas of merchandising management activity:

1. Planning stock to be delivered in to the business:

a. Analyzing historical sales patterns and trends.b. Recommending forward fabric buying levels.

c. Recommending forward garment buying levelsd. Monitoring and managing delivery of new stock in to the distribution centre.e. Ensuring that overall stock levels and buying are in line with the organization

sales plans.

2. Moving delivered stock around the business:

a. Initial allocations of new stock to shops- what quantity to each?b. Store replenishment as garments start to sell how much more stock andhow quickly do we send to individual branches?

a. Recommending the level of repeat buys of best selling lines.b. Transfers and recalls of faulty or non-seasonal stock.


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The merchandiser, like the buyer, is often trying towork on many seasons at once. They will be helping

the buyer plan ahead for distinct seasons colour

ratios; they will also be helping the buyer to decide onhow many garments to buy within each category for

the coming season.

In addition they will be controlling the currentseasons stock flow into the business and advising on

whether or not repeat buying will be necessary.Whether late deliveries need to be cancelled orwhether or not poor selling lines may have to havetheir price reduced, to ensure that they will sell out.


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The role and responsibilities of the merchandiser:

To estimate sales and plan stock levels to achieve theplanned sales and margin for a specific garment type.

To provide regular analysis and progress reports referring tostock levels, sales performance and stock purchases to seniormanagement.To work with buyer on range planning to maximise

commercial opportunities for products.To manage intake and commitment to accommodate thestock requirements of the business at any given time and theopen to buy requirements of the garment type.To manage stock distributions to stores optimisingcustomer demand, available selling space and seasonalselling opportunities.

To effectively manage and develop the merchandisingdistribution team.


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The key merchandising competencies:Personal Characteristics:

Logical, rational

Multi tasking flexibilityIT-orientedNumerate

AnalyticalDetail conscious But aware of bigger pictureAssertiveRetentive Memory

AwarenessData awarenessCommercial awareness

PlanningAction


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Fashion merchandising

Factors that make fashion merchandising

Unique:

1. Obsolescence factor

2. Higher markdown

3. Faster turnover

4. Seasonal factors

5. Sales promotion


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Obsolescence factor

Obsolete = no longer in use or discarded fashion

In many categories of merchandise utility value is a strong factor.

But in fashion the emotional pull is an all consuming element.

It can be readily seen that what is not accepted becomes obsolete.

Merchandise is initially priced at a level that will make for a desired

profit

Consumers acceptance = buyers success

Lack of acceptance means slow or non selling style

New selling price to move it out of stock


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Higher markdowns:

Right merchandise at right price level is the key to success

Product obsolescence leads to mark down

First markdown should be deep enough so that there is an

immediate appeal to consumers and that the stock can be moved

out quickly

Strong relation between the item and time of the season it is

marked down

Faster turnover:

Fashion change fast

By constantly changing styles in stock, the merchandise is kept

in good condition


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Seasonal factors:

Fashion depends on the season of the year, when the

season is over, the merchandise fades with it.

Very rarely merchandise is kept in storage for the

following year. It is entirely dangerous

Each buyer therefore follows the principle

what is purchased must be sold

Sales promotions: fashion products sales promotions arean important part.

Presentation: in case of fashion products presentation of

product to consumer is of utmost importance.


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Where?

Retailers

Wholesalers

Buying houses / buying agencies

Export houses

Wholesaler retailer consumer

Exporter buying house Retail chain


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Basic functions of merchandising

1. Planning

2. Buying

3. Selling

The fundamental consideration of fashion

merchandising is to stock

What consumers are likely to accept.

Right with respect to styles, colors, price, place

time, etc


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Marketing and merchandising

Marketing: identifies customers, determines

what products to offer to customers and how to

do so, while meeting the financial returnobjective of the company

Merchandising: process through which

products are designed, developed and promoted

to the point of sale.


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Steps in fashion merchandising

1. Planning: fashion is subject to change and the

planning must have flexibility

Planning based on how much we expect to sell and

how much inventory it will take to secure that selling

Planning the assortments Customer orientation : knowing what people want,

when they want and how much they would pay for it.

Preparation of six month buying plans which requirethe knowledge of fashion trends and market

conditions and economic factors

Most important factor in planning is flexibility.


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2. Buying: buying is done by classifications

Price lines

Sizes

Quantities

Buying is dependant on customer demand

estimated by study of customer wants and

needs

The successful buyer knows what customer

wants, when they want it and how much they

want to pay for the goods.


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Buying involves the following functions

1. Choosing the resource

2. Selecting the merchandise

3. Securing the best terms

4. Actual placing the order.

The buyer is responsible for not only what to buy and when to

buy, but also where to buy and how much to spend.

Buying responsibilities includes:

Establishing and maintaining effective buying relationship

with vendors.

Adequately stocking the departments price lines and securing

the best possible mark up on all purchases


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Supervising the physical inventory or stock counts

to verify the accuracy of the stock records.

1. Selling: buying is dependent on customer demand.Demand determined best by the actual customer

response to the to goods made available by the

buying function. So buying function cannot exist

without involvement in selling function. Thisfunction includes communication and promotional

activity.

Goods well bought are half soldTrend towards central buying- merchandise

presentation to the customer is becoming a function

of sales manager rather than buying


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A store regardless of its size, cannot and should

not stock, all the merchandise available in the

market.

The crux of merchandising :

Selecting the merchandise with certaincharacteristics that are indicative of tastes of

customers of a store and in such assortments ,

depths and price levels that make for a properrate of sale decided upon by the customer.


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Department attachedto

Focus

Design Procuring materials as desired by design dept.Scouting for new materials & making dataavailable to the designers on excess or slowmoving items of raw materials & trims in stock.

Production Procuring material as per the production plan atthe right time & the right price & for rightquantities to ensure that production process isnever hampered.

Retail Ensuring that the merchandise available at the

stores is what is selling or is likely to sell andwithdraw slow moving items.

Overall To overview the flow of goods and services withinthe organization.


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Merchandising

Top Management

Design

Procurement

Production

Warehouse Logistics

ERP

Accounts

Marketing


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Tech pack received

Proto sample /development sample

1st fit sample

size set sample

submitted

Size set approval

sealer sample (WithComments)

sealer sample toproduction

Production

Finishing

Shipment

2nd fit

3rd fit

REJECT

Initial fabric is ordered

Bulk fabric is received

If sample approved

Process Flow in Export House


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merchandising

sampling

production

finishing

packaging

shipping

financeHRD

R&D

Security

fabric

accessory

Role of Merchandiser in Export House


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2

Costing - best price quotations - desired markups.

3

For all the approvals whether Proto / Fit , Size Set , sealer, TOPsamples or gold sealer

4

Once the orders are finalized, pass on all the concerned details to theplanning.

5

Conducting PP meeting and preparing Time and action calendar and

reviewing them on daily basis.

6

Coordinating with production deptt & updating them about variousapprovals received from buyer to ensure timely delivery.

7

Providing best service to the buyers by taking quick actions andfeedback to maintain healthy buyer vendor relationship

Fabric, lab ,trims and accessories,pattern making department, CAD

Sampling and IE department

Accounts and planning department

Production and finishing

department

HODs of all concerned department

Merchandising Department

Role of Merchandiser in Export House


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Fabric store

QC

Cutting Department

Sewing Department

Trims & Accessory store

Laces, zippers, labels

QC

Kaj button Department

Finishing Department

QC

QC

Packaging DepartmentTags, price tickets

QC

For warehousing

Checking for defects, width, color

For cutting, recutting, bundling & ticketing

Checkingof cut panels

For stitching

For end table checking (measurement checking)

For buttoning

For washing, thread cutting, spot removing , ironing & tagging

Final checking

For getting packed in poly bags

For getting packed in cartons

For shippingShipping Department

Metal detection

AQL -1.5

AQL 2.5

Production process


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Acceptable Quality Levels for Normal Inspection (% defective)

Lot Size/Sample Size .01 .015 .025 .04 .065 .10 .15 .25 .40 .65 1.0 1.5 2.5 4.0

Lot Acceptance (Ac) Number (maximum number of rejects to accept the lot)

LS=2 to 8SS=2

0 0 0 0 0 0 0 0 0 0 0 0 0 0

LS=9 to 15SS=3

0 0 0 0 0 0 0 0 0 0 0 0 0 0

LS=16 to 25SS=5

0 0 0 0 0 0 0 0 0 0 0 0 0 0

LS=26 to 50SS=8

0 0 0 0 0 0 0 0 0 0 0 0 1 1

LS=51 to 90

SS=13

0 0 0 0 0 0 0 0 0 0 0 0 1 1

91 to 150SS=20

0 0 0 0 0 0 0 0 0 0 0 0 1 2

151 to 280SS=32

0 0 0 0 0 0 0 0 0 0 0 1 2 3

281 to 500SS=50

0 0 0 0 0 0 0 0 0 0 1 2 3 4

501 to 1200SS=80

0 0 0 0 0 0 0 0 0 1 2 3 5 7

1201 to 3.2KSS=125

0 0 0 0 0 0 0 0 1 2 3 5 7 10

3201 to 10KSS=200

0 0 0 0 0 0 1 1 2 3 5 7 10 14

10001-35KSS=315

0 0 0 0 0 0 1 2 3 5 7 10 14 21

35001-150KSS=500

0 0 0 1 1 1 2 3 5 7 10 14 21 -

150001-500KSS=800 0 0 0 1 1 2 3 5 7 10 14 21 21 -


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Two primary types of Buying Offices are:

Independent &Store Owned

Independent Resident Buying Offices are independently owned & operated. Theycharge fees to noncompeting stores for market services.

Store-owned Resident Buying Offices are of two types:

Associated Buying Office: Jointly owned & operated by a group of stores.Membersusually have similar volumes, store policies & target customers. Operating expensesare allocated as per stores sales volume & the amount of service rendered.

Corporate Buying Office:


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Role of Merchandiser in a Buying House

International Buyer

Export HouseExport House

Inquiry

Export HouseExport House

Quotation

BUYING HOUSEMERCHANDISER

Inquiry Quotation

Export HouseExport House Export HouseExport HouseExport House Export HouseExport HouseExport HouseExport House

CONFIRMATION

CONFIRMATION

R l f M h di i B i H


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B

U

Y

I

N

G

H

O

U

S

Merchandiser

Export HouseMerchandiser

B

U

Y

E

R

Approvals

Proto, 1st Fit, Size set,

Gold Seal

Approvals


Gold Seal

Approvals


Gold Seal

Approved Approved

Inspection/Follow -upUpdating Info.

ShipmentShipment

Shipment

Role of Merchandiser in a Buying House


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Personal Requirement: Expression To think in numbers

Getting along with others Enthusiasm Alertness Creativity

Curiosity Physical stamina and emotional stability A good memory Managerial skills


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Educational requirement:

The formal programme

On-thee-job training programme The job rotation program


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Remuneration Advancement

Opportunity of economic growth Opportunity of personal growth Transferability Travel Self expression Equal opportunity Lifetime career opportunity


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Hard work and long hours Competition

Pressure Accountability Travel


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Knowing your product Understanding fashion dynamics and

principles Knowing your customers Knowing your resources Understanding management goals and

policies Understanding basic merchandising

arithmetic

merchandising class3 (1)

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