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52 Cards in this Set

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assortmen plan
list of merchandise that indicates in general terms what th e retailer wants to carry in a particular merchandise category
category
is an assortment of items that the customer sees as reasonable substitutes for each other
category mgmt
process of managing a retail business with the objective of maximizing the sales and profits of a category
why use category mgmt
-one person is responsible for the success or failure of a category
-using category mgmt is that it is easier to manage to maximize profits
category catptain
formas an alliznce w/ a retailer to help gain consumer insight, satisfy consumer needs, and improve the performance and profit potential across the entire category
merchandise group
managed by the senior vice presidents of merchandise
classification
gropu of items or SKUs for the same type of merchandise
merchandise strategy
1. define target market
2. establishign performance goals
3. deciding, on the basis of general trends in the marketplace, which merchandise classifications deserve more or less emphasis
GMROI
to ratios: inventory turnover and gross margin percentage; return on assets=net profit margin x asset turnover
-used as a return on investment profitability measure to evaluate departmnets, merchandise classifications, vendor lines, and items
inventory turnover=
net sales/ average inventory at retail
advantages of high inventory turnover
-increased sales volume (fresher merchandise)
-less risk of obsolescence and markdowns
-improved salesperson morale (no one likes to sell yesterday's stuff)
-more money for market opportunities (hold inventory until next season or selling it to retailers at a lower-than -normal price)
-decreased operating expenses
-increased asset turnover
disadvantages of too high an inventory turnover
-lowered sales volume, increased cost of goods sold, increase operating expenses,
category life cycles
sales start off low,increase, plateau, and than decline
-useful for predicting sales
fad
merchandise category that generates a lot of sales for a realtively short time-often less than a season
fashion
category of merchandise that typically lasts several seasons, and sales can vary dramatically from one season tot he next
want book
salespeopel record out-of-stock or requested merchandise
depth interview
an unstructured personal interview in whcih the interviewer uses eextensive problign to get indicidual respondents to talk in detailab tout a subject
fill rate
percentage of an order that is shppied by vendor ->high fill rate, means that in -0store merchandise availability increases, resulting in fewer out-of-stocks.
variety /breadth
number of different merchahandising categories within a tore or dept.
assortment/depth
number of SKUs within a category.
product availability/level of support or service level
defines the percentage of demand for a particular SKU that is satisfied.
cycle stock/base stock
inventory that results from the resplensishment process and is required to meet demand when the retailer can predict demand and replenishment times
price bundling
practice of offerint 2 or more different products or services at one pric
multiple-unit pricing
similar to price bundling except products or services are similar rather than different
variable pricing
application of price discrimination
-location/zone pricing
-early bird special
-senior discounts
-over weekend travel discount
-quantity discount
leader pricing
-certain items are priced lower than normalto increase customers traffic flow and /or boost sales of complementary products
-best items: purchased requrently, primarily by price-sensitive shoppers
price lining
limited number of predetermined price points
-benefits: elimiantes confusion of many prices
-merchandising task is simplified
-gives buyers flexibility
-can get customers to "trade up"
odd pricing
a price that ends in an odd number ($.57) or just under a round number.
-believe it increases sales
-implies the type of store or sale
basic stock list
desrbies each SKU and summarizes the inventory position
deseasonlized demand
forecast demand w/o the influence of sesonality
order point
amt. of inventory belowe which the quantyt available shouldn't go or the item will be out of stock before the next order arrives.
=(demand/day)*(lead time+review time)+Backup stock
shrinkage
inventory reduction that is caused by shoplifting by employees or customers, by merchandise being misplaced or damaged
stock-to-sales ratio
specifies the amount of inventory that should be on hand at the beginning of the month to support the sales forecast and maintain the inventory turnover objective
core assortment
relatively large proportion of the total assortment that is carried by each store in the chain, regradless of size.
-ncessary to maintain smaller store
sell-through analysis
comparios b/t actual and planned sales to determine whether early markdowns are required or whehter more merchandise is needed to satisfy demand
everyday low prices
-change the same price all the time
-set prices b/t reguarl non-sale price and deep discount sale prices of a high/low pricing competitior
-EDLP retailers typically still have some sales
high/low pricing
regular prices are higher than EDLP competitors, but merchandise frequently on sale at lower prices
demand-oriented
chrage as much as customers are willing to pay
cost-oriented
set price at a fixed percent over cost of merchandise
competitior-oriented
set price in relation to competitor's prices
value
relationship of what the customer gets (goods/services) to what he or she has to pay for it
initial markup
retail sellig price initially placed on the merchandise-cost of goods sold
maintained markup
actual sales that you get for the merchandise-cost of goods sold
break even =
fixed cost/ (unit price-variable cost)
first-degree price discrimination
charege customers as mucah as they woudl be willing to pay
second -degree price discrimiation
charging different prices to different peopel on the baises of the nautre of the offinerg (coupons, rebates, etc.)
coupons
offer a discount on the price of specific items when they're pruchased at a store->
-try for first time
-convert first timers to regular
-encourage large purchases
-increase usage,
-protec market share
rebate
portion of purchase price returned to the buyer
-more good for retailer b/c increase demand but retailer has no handling costs
-manufacutrer likes rebates b/c they let them offer price cuts to consumers directly.
price bundling
practice of offering two or more different products or services for sale at one price
multiple-unit pricing
similar to price bundlign in that the lower total merchandise price increase sales, but the products or services are similar rather htan different
variable rpcign (zone pricing)
charging diff. prices in different store, markets or zones
price lining advantages
-elimiante confusion
-easier for merchandisers-have price in mind
-buyers have more lexibility
-used to get customers to "trade up" to more expensive model