Merchandise Planning[1]

Concept of merchandising planning.

Implications of merchandising planning

Process of merchandising planning

Merchandise hierarchy

Merchandising Planning planning and control of the merchandise inventory

while balancing the customer’s expectation and retailer’s strategy.

Right assortment of goods. Substantial depth - availability. Choice available to customer increases. Required goods always available.

Finance – Purchase order and profitability.

Marketing – Advertizing and sales promotions.

Warehousing & Logistics – Merchandise receiving and verification.

Store operations – Space planning, avoid duplication.

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FinancePayment to suppliers, Profitability measurements

Store OperationsSpace planning, Communication about new

products & their features,

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Merchandise planning

Developing a sales forecast –

Determining the Merchandise Requirement

Merchandise Control

Assortment Planning

Reviewing past sales

Economic conditions.

Sales potential.

Marketing strategies and Competition.

Creating the sales forecast.

Merchandise Budget sales plan stock support plan Planned reductions Planned procurement Gross margin

Assortment plan Product range and models.

Process can be top down / bottom up

fresh groceries Ready to eat snacks Addictives /spices/pickles. Personal hygiene products Cooking aids Necessities – pulse, sugar salt , oil ,

wheat floor. Soft drinks/ juices.

Company Department Merchandise classification Merchandise category Merchandise sub category Style price unit Stock keeping unit

Wafers , biscuits , chips, snacks. Salted , sweet - category Branded , local- sub category Pack size / price– 100 gm, 250 gm, 500

gm. – SPP. SKU

Staple/ basic- Fashion Seasonal Fad Style

ASSORTMENT Width Depth

12

9.Nisan.2023

Range plan with price points, briefing by Category manager to the team. Co-ordination bt merchandiser

Fabric inputs with Prices, Design and Quality break-up (Fabric team, Garment team, Merchandiser

Colour palette forecast, alongwith Theme forecast or selection (Fabric team, Garment team, merchnadiser)

Fabric design (Fabric designer)Costing/ ApprovalsDelivery lead times

GarmentStyling

SamplingPackaging designGarment costing

Product range presentations

Range approvals for styles & fabric

Order bookings

Raise purchase orders for fabrics & trims

Garment & packing specifications to be made

Handover complete specifications with fabric, trims to production dept

Planned sales: Projected sales for the period

Planned purchases: Projected purchases for the period

Planned reductions:Markdowns: Reduction in prices for Bad quality, Competition,

Trend change etcEmployee discounts: Inventory shrinkage: Theft, pilferage

Planned markups: Planned difference in selling and cost (It is not a gross profit)Markup% = (Selling price – Cost price)/ Selling price

Gross marginGross margin = (Selling price – Cost price - Reductions)

Adjusts merchandise buying Sales Reductions

Maintains stock and sale relation.

OTB = Planned EOM stock - projected EOM stock

Projected EOM stock = actual BOM stock + actual additions to stock + actual on order - planned monthly sale – planned reductions for the month.

Limits over and under buying

Prevents loss of sale – due to unavailability.

Maintains purchase within budget.

Reduce markdowns – due to excessive purchase.

The process of deciding and arriving at the quantity of each product /category of merchandise.

Purchase quantity. Color , size , brand , material. Classics, Fashion, Seasonal, Fad, Style

MenswearMenswear

ShirtsShirts Trousers Trousers

accessoriesaccessories

ZodiacZodiac Van HeusenVan Heusen

Louis Phillippe

Louis Phillippe

ArrowArrow

SIZE SIZEColor Color Style Style

DEPARTMENTDEPARTMENT

PRODUCT LINEPRODUCT LINE

BREADTHBREADTH

DEPTHDEPTH

VENDOR

STYLE

UNITS

COSTS

RETAIL PRICE

PLANNED PURCHASE JAN FEB MAR APR

TOTAL

X C - X 8 800 1200 15 20 25 15

75

Y F - XX

8 960 1350 10 25 10 20

65

Z E - XL

6 900 1500 30 22 15 18

85

Limits over and under buying.

Sufficient choices for customers.

Satisfactory product quantity available.

Aesthetic minimum – lower limit of range width.

Precise items and quantity for merchandise line.

Identification of customer’s buying decision

Identification of levels under attributes.

Allocation of total units respectively based on demand.

TYPE DRESS CASUAL FORMAL SPORT

% OF SALES

10 40 20 30

SIZES SMALL MEDIUM LARGE X – LARGE

% SALES 25 40 25 10

SLEEVE LENGTH

FULL HALF

% OF SALES

30 70

Marketmax MMS Retail – pro Ms- excel