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Chapter 7 Managing Merchandise Assortments Merchandise Management Process by which a retailer offers the right quantity of the right merchandise in the right place at the right time and meets the company’s financial goals. Sense market trends Analyze sales data Make appropriate adjustments Merchandise Management and Investment Portfolio Management Dollars to invest in inventory Invest in “hot” merchandise Save a little for opportunities (open to buy) Monitor portfolio Sell losers (markdowns) The Buying Organization Merchandise Group…………Men’s wear Department………….……….Young Men’s wear Classification………….……..Pants Category……………………..Jeans Sock Keeping Unit (SKU)…..Levi, 501, size 26 waist, 32 inseam The Category A merchandise category is an assortment of items that customers see as substitutes for each other. Vendors might assign products to different categories based on differences in product attributes Retailers might assign two products to same category based on common consumers and buying behavior Category Captain Selected vendor responsible for managing a category Vendors frequently have more information and analytical skills about the category in which they compete than retailers Helps retailer understand consumer behavior Creates assortments that satisfy the customer Improves profitability of category Problems Vendor category captain may have different goals than retailer Antitrust Consideration The vendor category captain could collude with retailer to fix prices It could block brands from access to shelf space Category captains need to temper zeal for control over retailers Evaluating Merchandise Management Performance Merchandise managers have control over The merchandise they buy The price at which the merchandise is sold The cost of the merchandise Merchandise managers do not have control over Operating expenses Human resources Real estate Supply chain management Information systems SO HOW ARE MERCHANTS EVALU
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