FASHION MERCHANDISING

Fashion Industry- Levels of Merchandising

Retail Organization Merchandising
Buying Agency Merchandising Export House Merchandising

What is Merchandising?
IN RETAIL ORGANISATION Merchandising is a specialized management function within the fashion industry. It is the business that moves the world fashion from designers showroom to retail sales floor and into the hands of consumers. It is the internal planning that takes place within a retail organization in order ensure adequate amount of merchandise are on hand to be sold at prices that the consumers are willing to pay to ensure a profitable operation.

Marketing Vs Merchandising
Marketing function Focuses on broadly defining a companys market and characteristics. It pinpoints new opportunities for growth through self analysis and market research and promotes companys image and products.

Merchandising function is more specific concerning itself with the development, execution and delivery of the product line with its close ties with the market it serves. Merchandising is not only able to adjust to market variations rapidly but is capable of actually anticipating and helping to create market changes.

Merchandiser
Merchandiser is a person who get converted inspiration into design , use technology to conceptualize and address the planning , production, promotion and distribution of products in the fashion industry to meet the consumer needs and demands

Merchandising - involves 6 rights

Right Merchandise At Right Price At Right Time At Right Place In Right Quantity With Right Promotion

Also to right customer.

Right Merchandise
Retailers must fill their shelves with the merchandise that customer wants.

Right Place
The location of the merchandise is of prime importance since it decides the accessibility.

Right Time
Much merchandise is seasonal in nature and must be on hand when it is most needed.

Right Quantity
A profitable balance between volume of sales and amount of inventory is the desired goal.

Right Price
Merchandiser must arrive at a price that is high enough to give the store profit and yet low enough to meet the competition and customers expectations.

Right Promotion
Right balance between the investment and the appeal created for the customers

THE CARDINAL SIN OF FASHION MERCHANDISING IS TO BE OUT OF TREND

MAIN PRINCIPLES AND DYNAMICS OF FASHION

The constant in fashion is change Changes in fashion are gradual and evolutionary rather than revolutionary. Fashion is cyclical Customers make fashion Acceptance level of fashion vary Fashion depends on place and reflects lifestyle

INTERPRETING CONSUMER DEMAND

Elements of Customer Demand

TARGET MARKET
BUYING MOTIVATIONS

Identifying Target Market

Demographic

Behavioral

Market Segmentation

Psychographic

Geographic

Demographic Segmentation
Mainly grouped on the basis of: Population Age Income Sex Occupation Education

Geographic Segmentation
Mainly grouped on the basis of: Cities States Regions Climate plays an important role

Psychographic Segmentation
Grouped on the basis of the lifestyle Social activities Interests leisure pursuits needs and wants

People having similar lifestyles can make up a target market group.

Behavioral Segmentation
Grouped on the basis of opinion on specific products or services Rating of usage of products & services. Help in improving the service/product and make it different from others.

DETERMINIG WHY CUSTOMERS BUY

BUYING MOTIVATIONS

RATIONAL MOTIVATIONS Durability Dependability

EMOTIONAL MOTIVATIONS Imitation Emulation

Comfort
Economy of Operation Price

Prestige
Pride of Appearance Distinctiveness

FASHION PURCHASES
SPECIFIC SELECTION FACTORS
Silhouette- Degree to which an item is considered moderate or extreme in form in relation to the currently popular shape or form of such products.

Decoration or trim- Presence or absence of all types of ornamentation

Material/Fabric-Quality of fabric Surface interest- Texture, Hand feel Color-Actual hues used Workmanship- construction, stitching, finishing

 Size- Preciseness of Fit Sensory factors- Touch, Taste, Smell, etc. Ease and cost of care Brand- Identity of manufacturer or distributor of an item

Utility- Extent of usefulness and service

Appropriateness-Degree of suitability and acceptability Price- Value placed by individual customer

FASHION RETAIL ORGANISATIONS

Organizational Structure & Responsibility

Organizational structure includes the clear understanding of the authority and responsibility for each job to be done.

Organizational system differs with the difference in type of merchandise, size of retail firm, and target customer.

Various Fashion Retail Businesses

Three basic Formats The Small Single- Unit Store The Departmentalized Store The Chain Store

The Specialty Store, Discount Store are also few of the other formats

Major Divisions & Responsibilities

Merchandising division- buying, merchandise planning and control, selling, fashion coordination Sales and promotion division- advertising, visual merchandising, special events, publicity and public relations

Finance and control division- credit, account payable, and inventory control.
Operational division- maintenance of facilities, stores and merchandise protection, personnel, customer service and receiving and marking of merchandise.
o Personnel and Branch Store Division may function separately if the store operations are very large.

Stock holders Board of Directors President

STAFF Legal counsel research department

Vice President and General Manager

STAFF Other advisory services

Merchandising division GMM

Sales Promotion Division Sales Promotion Manager

-ADVERTISING DEPARTMENT -artists -copywriters -direct mail -layout -radio & television -DISPLAY DEPT. -Interior displays -sign room -window displays -exterior displays -PUBLIC RELATIONS -news releases -public fashion shows -special events -use of auditoria

Finance and Control Division Treasurer & Controller

-ACCOUNTING OFFICE -a/c payable -cash office -general a/cing -inventory taking -insurance & taxes -payroll office -sales audit -statistical -CREDIT OFFICE -billing customers -cashiers in office -charge a/cs -charge authorization -credit interviewers -defered payments -CREDIT UNION -EXPENSE CONTROL -LAYAWAY OFFICE -MERCHANDISE STATISTICS

Operating Division Store Superintendent

Personnel Division Branch stores Personnel Director Executive in charge of branches

-BUYING OFFICES -COMPARISON BUREAU -DIVISIONAL MANAGERS -department managers -assistant buyers -sales people -FASHION COORDINATORS -HOME PLANNING BUREAU -MERCHANDISE PLANNING & CONTROL -MERCHANDISE RESEARCH

-ADJUSTMENTS -ARCHITECTS OFFICE -CUSTOMER SERVICE -sales people -service desk -telephone & mail orders -bridal registry -DELIVERY -ELEVATORS -MAIL DIVISION -MAINTENANCE -PACKING & PICK UP -PRINTING -PURCHASING DEPT. -RECEIVING & MARKING -RESTAURANTS -STORE PROTECTION -TRAFFIC DEPT. -WAREHOUSE -WORKROMS

-EMPLOYMENT OFFICE -interviewing -placement -termination -HOUSE ORGAN -PERSONNEL BUDGETS -PERSONNEL TESTING -RECORDS & REVIEWS -budgets & records -job analysis -rating & reviews -TRAINING -induction & system -on the job -WELFARE & HEALTH

-Audit -credit -store planning -maintenance -receiving -transfer of merchandise -employment training -merchandising -sales planning -advertising -displays -special events -liaison with main store

The Merchandising Division

General Merchandise Manager (GMM) Soft Line Hard Line

Divisional Merchandise Manager (DMM)

Merchandise Managers (MM)

Buyers

Assistant Buyers

Trainees

Qualities of a Fashion Buyer

Dedication Enthusiasm Awareness Stamina Foresight Creativity Product Knowledge Decision-making skill Mathematical ability Communication skills Negotiation skills Managerial skills

Work Area of a Fashion Buyer

Liaising with suppliers (immediate vendor) Liaising with internal departments
Buying Colleagues Quality Control/Tech
Buyer

Design

Finance Marketing/PR

Fabric technology Retail Sales people

THE BUYERS JOB

Planning Buying Selling

Planning
Based on 2 factors
-How much the store expects to sell? -How much inventory is needed to achieve that sales goal?

The buyer must plans stocks so that the store image is reflected in the merchandise.

Preparation of 6 months buying plan with knowledge of fashion trends, market conditions, economic factors, other records of the past seasons.
Flexibility is the most important factor to be kept in mind. Includes provision for constant adjustment to actual results.

Buying
Adequately stocking the departments price lines and securing the best possible mark ups on all purchases. Supervising the physical inventory or stock counts to verify the accuracy of stock records. Establishing and maintaining effective buying relationships with vendors.

Selling
Communication and promotional activities.
Determining the selling features of the merchandise for promotion purposes and the timing of these promotions.

What is the difference between Buyer & Merchandiser ?

The buyers role in USA includes the administrative and financial input part also besides core buying responsibility. In USA buying is often a subdivision of the merchandising team, whereas in many companies in UK, Buying is perceived as central role and merchandising as parallel department to buying. Job Details for both these profiles are different with different organizations and are quite overlapping but all fashion buyers are responsible for overseeing the development of range of products aimed at a specific type of customer and price bracket.

BUYING PATTERNS

CENTRAL BUYING
The centralization of all buying activities from a central headquarters with the authority and responsibility for the selection and purchase of merchandise limited to buyers of particular merchandise categories

Three Forms of Central Buying

The central merchandise plan The warehouse and requisition plan The price agreement plan

The central merchandise plan

Central buying assumes complete authority for buying the assortment of goods, pricing, warehousing and distribution to the many stores. Central make their purchases and have the merchandise delivered to the warehouse. Buyer has an opportunity to check the goods to be sure they have been shipped as ordered.

The central merchandise plan

ADVANTAGES It provides a steady flow of merchandise provides for specialists in each merchandise category. Goods are inspected before delivery. It allows better stock control.
DISADVANTAGES Adjustment to local conditions is difficult Cooperation may be lacking An enthusiastic selling force may be lacking

The warehouse and requisition plan

The central buyer arranges for the initial assortment and has the merchandise shipped to the individual stores. Used for staple goods.
The store manager is provided a list of the stock that is inventoried in the warehouse where the central buyer will see it is properly filled. The store manager has the responsibility for ordering enough merchandise to carry the store through the buying season.

The warehouse and requisition plan

ADVANTAGES Gives the store manger some responsibility in merchandise selection. Reorders or fill-ins are usually filled promptly.

DISADVANTAGES There is little control over the composition of the merchandise selection. Poor warehouse control may lead to an imbalance in store inventory.

The price agreement plan

Central buyer working with vendors and manufacturers will agree on the retail price, color, size, style and assortment of staple types of merchandise as well as the terms of shipping. The merchandise is illustrated and described adequately in catalog to be given to store manager. The central buyer is responsible for prearranging the minimum amount of goods to be purchased by the entire chain, keeping the store catalog up to date, adding new items, canceling old items. The store manager has complete authority for the composition of the stock and orders can be placed directly with the vendors concerned.

The price agreement plan

ADVANTAGES It develops a feeling of responsibility on the part of the store manager. Reduces the expense of warehouse and the necessity of keeping detailed records of each unit. DISADVANTAGES Problems arise with tardy deliveries and with high transportation cost.