MERCHANDISING – FEATURES, CONDITIONS AND FUNCTIONS
Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
Retail merchandising is the process used in order to conduct retail sales. As part of the process, the merchandiser pays close attention to the types of products offered for sale, how to best present those products to consumers, and determining what a reasonable retail price is for each unit sold. While retailers have traditionally engaged in the task of retail merchandising in a physical location, the Internet has now made it possible to apply these same basic principles in a virtual setting.
FEATURES OF MERCHADISING
Packaging may be defined as the activities of designing and producing the container or wrapper for a product.
With other marketing mixes well in place, effective packaging can make the product to be more visible than before. This is more so where the packaging is bright and distinctive, and easily commands attention. Even when such products are not eventually bought the packaging would have easily advertised both the product and the company that produced. Effective packaging also helps a product to gain a competitive edge over its competitors as the product will be easy to store, handle and market. Hence, it assists in ensuring that brand loyalty is entrenched and provides positive snatching of brand switchers Packaging style ensures that the brand image is well promoted and entrenched in the minds of the customers.
Good packaging also form part of the customer’s perception by influencing the ways in which the customer perceive or think about the product, and hence an effective planning aids to the advertising efforts of the company. Effective packaging must be motivational i.e. must be able to inch the customers towards making the crucial purchase decision and therefore must not be repellent to the customer. As dressing expresses the personality of a man packaging must as a rule express the personality of the product by conveying a particular product impression to the customers.
As for the design of the container the message inscribed on the container and the graphical design and coloration must be unique, attractive and visually inviting with good sense of aesthetics. The inscribed information must be easily readable.
Experience has shown that companies that make good quality products but use bad packages for them normally find themselves in trouble. Hence efforts, time and money spent in packaging improvement is worth it because packaging sells.
Organizations identify their products with brand names, symbols, and distinctive packaging. Almost every product that is distinguishable from another contains a means of identification for the buyer. A brand is a name, term, sign, symbols, design, or some combination of these used to identify the product of a firm.
Branding is when that idea or image is promoted so that it is recognised by more and more people, and identified with a certain service or product when there are many other companies offering the same service or product.
Branding helps in promoting the image of the company, especially where the branded product are of high quality and justifies the name of the company associated with it. Branding also helps the customer in selecting from different types of products in terms of quality, price, and other specific product characteristics. It enables easy identification of different products and enables the company to meet customer’s requirement easily. Branding makes the company’s products unique and identifiable from other products. It helps in building up a loyal corps of customers for the company’s products.
A label is the descriptive part of a product package, listing brand name or symbol, name and address of manufacturer or distributor, product composition and size, and recommended uses. It is that part of the product that carries information about the product or the seller. In the past a label often was a separate item that was applied to the package, today, it is an integral part of most packages. Labels perform both promotional and informational functions.
Labeling is a product feature that requires management: affection. As mentioned earlier, a label may be a part of a package, or it may be a tag attached directly to the product. Obviously there is a close relationship among labeling, packaging and branding.
CONDITIONS OR STEPS IN MERCHANDISING
The first important step in retail merchandising is determining what products will be carried in the retail establishment, negotiating the unit price that will be charged by the manufacturer, and arranging for the delivery of those goods. Depending on the number of units the retailer can afford to purchase at a given time, it may be relatively easy to obtain a discounted unit price, making it easier for the retailer to be competitive in the local marketplace.
Once the goods are secured, the retailer must determine the unit price that he or she will assign to the products. In all cases, this retail price will be higher than the cost of purchasing the goods from the supplier. It is this difference between the wholesale price and the retail price that allows the retailer to make a profit and remain in business.
After setting the retail pricing, the process of retail merchandising moves on to the task known as setup and display. This process is concerned with displaying the goods within the retail setting to best advantage. By using such devices as display windows, elevated platforms, and colorful backdrops to attract the attention of shoppers, the retailer increases the chances of selling many units quickly.
Marketing is an important aspect of any retail merchandising strategy. Engaging in a publicity campaign to reach prospective customers may involve something as simple as advertising in local publications as well as electronic advertising on local radio and television stations.
In order to be successful with retail merchandising, it is necessary to provide consumers with a couple of key benefits. First, the products must be of high quality; this helps to ensure that the customer will return for more purchases in the future. Along with the quality, the retailer must also sell the products at prices the consumer finds reasonable. By providing quality products at affordable prices, the retailer has a much better chance of standing out from the competition and remaining in business for many years to come.
FUNCTIONS OF MERCHANDISING
The functions of merchandising are as follows:
It is the process of acquiring goods at the right price, at a right time, in right quantity and quality and from a right source of supply. Buying includes the determination of one’s needs, finding out the sources of supply, negotiating prices and other terms and the transfer of title from seller to the buyer. Its purpose is to bring the goods at the place where they are wanted.
Producers at different centers produce goods in small quantities. They cannot be processed unless they are transported to the market. This process of collecting goods from various sources and bringing together those in a centrally located place are called assembling. Assembling may be for the purpose of either resale to the retailer or ultimate consumers, or it may be for getting together raw materials to be used by manufacturers.
Standardizing and grading
Standardizing means the setting up of basic categories or grades of the products. If the particular goods are of certain standard, it means that they are of a certain quality. Grading means the division of products into classes made up of units possessing similar characteristics of size and quality. Thus, it may be said that goods are graded in accordance with specifications set up in the standards.
Storing is another important function of the marketing process. It involves the holding of goods in proper condition from the time they are produced until the consumers need them. Storing protects the goods from deterioration and helps in carrying over surplus for future consumption, storing regulates the flow from different places; it enables goods to be made available to consumers.
Transportation helps in the physical movement of goods from places where they are produced to the places where they are demanded. It creates place and time utility for the goods. Transportation has helped in mass production.
Through market research, a manufacturer or dealer gets information on the quality and quantity of goods wanted by the customers at the time when and where the consumers want them.
Scrambled merchandising is when a shop sells goods that are usually sold by another type of shop, in order to increase profits or attract new customers. For example, a food shop might start to sell some types of clothing. It is a situation that occurs when a retail business offers a mix of unrelated products that do not reflect the company’s original focus. Scrambled merchandising often reflects a scattered product management approach and can make a negative impression on consumers since they might not be sure what sort of products the retailer offers.
There are several reasons for the popularity of scrambled merchandising: retailers seek to convert their stores to one-stop shopping centers; scrambled merchandize is often fast selling, generates store traffic, and yields high profit margins; impulse purchasing is increased; different target markets can be attracted; and the effects of seasonality and competition may be lessened. For instance, convenience stores have added self-service food counters (with such items as cold and frozen fountain drinks, hot beverages, hot sandwiches, and other fast foods). These counters often have the highest profit margins of any of the product categories sold in these stores.
There are limits to how far a firm should go with scrambled merchandising, especially if adding unrelated items would reduce buying, selling, and servicing expertise and effectiveness. Furthermore, a low rate of inventory turnover might occur for certain product lines, should a retailer expand into too many diverse product categories. Finally, due to scrambled merchandising, a retailer’s image may become fuzzy to consumers.
Merchandising is any practice which contributes to the sale of products to a retail consumer A: a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
The features of merchandising are packaging, branding, and labeling.
The functions of merchandising are: buying, selling, standardizing and grading, storing, transportation, marketing research.
The first important step or condition in merchandising is establishing working relationships with manufacturers who will provide the goods or services that are ultimately sold by the retailer. Once the goods are secured, the retailer must determine the unit price that he or she will assign to the products.
After setting the retail pricing, the process of retail merchandising moves on to the task known as setup and display. Marketing is an important aspect of any retail merchandising strategy.
When a shop sells goods that are usually sold by another type of shop, in order to increase or attract new customers. It increases the intertype competition which is competition bet’ retailers who sell similar particular merchandise while using different formats, such at and department stores.