Professional Documents
Culture Documents
THREE
MERCHANDISE
MANAGEMENT
Sr. vice pres Sr. vice pres Sr. vice pres Sr. vice pres
merch mgr merch mgr merch mgr merch mgr V.P.
• Click to edit Master text styles
Women’s
ready-to-wear
Men’s, chld’s,
intimate apparel
Cosmet, shoes,
jewelry, access.
Soft home
furn., kitchen Planning
Department – Second level
Div. merch Div. merch Div. merch Div. merch Div. merch
manager• Third level
manager manager manager manager Div Dir..
Men’s suits,
slacks, dress– Fourth
Men’slevel
sports- Young men’s, Children’s Intimate Planning
shirts wear, Polo boys’ apparel apparel apparel
Classification
• Fifth level
Buyer Buyer Buyer Buyer Buyer Buyer Mgr.
Preteen Girls’ Girls’ Toddlers’ Infants’ Little boys’
Planning
accessories Size 7-14 Size 4-6
Category
Sportswear Dresses Swimwear Outerwear
SKU
Girls Levi jeans, sz
5, stone washed
blue, straight leg
08/21/97 * 4
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,41998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM 12-3
Illustration of GMROI
MILK WINE
Gross Margin $ 2,000 $150,000
Sales 150,000 300,000
Average Inventory 1,000 75,000
GMROI Inventory
Turnover
Dept. Specialty Dept. Specialty
Stores Stores Stores Stores
Decline
Introduction
Time
Strategy variable Introduction Growth Maturity Decline
Target market High-income Middle-income Mass market Low-income
Innovators adapters and laggards
Variety One basic Some variety Greater variety Less variety
offering
Distribution Limited or More retailers More retailers Fewer
Intensity extensive retailers
Price Penetrating Wide range Lower prices Lower prices
or skimming
08/21/97Promotion Informative * Persuasive Competitive Limited7
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,71998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM 12-6
Variations of the Category Life Cycle
SALES
SALES
SALES
SALES
Illustration
TIME TIME TIME TIME
(Sales against Time)
08/21/97 * 8
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,81998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM 12-7
Sales for Levi Jeans at
Trendsetters Department Store
400
SALES ($000) DOLLARS
350
300 Spring &
Winter summer
250 sales sales
Fall
200
sales
150
100
50
0
1 4 7 10
YEAR
Note: The peaks show the fall sales, typically 40 percent of annual sales; the horizontal lines typify 15 percent of annual sales
each in spring and summer; and the black dots (the winter sales) are typically 30 percent of annual sales. These data are for
illustrative purposes only. They do, however, represent typical growth patterns for a category like jeans.
08/21/97 * 9
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,91998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM 12-8
Relationship between Inventory Investment
and Product Availability
500
400
300
200
100
0
80 85 90 95 100
Product Availability (Percent)
08/21/97 * 10
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,
101998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM 12-9
Cycle and Backup Stock
150 -
Order 96
Cycle
Units Available
Stock
100 -
Buffer
Stock
50 -
0-
1 2 3 4
Weeks
08/21/97 * 11
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,
111998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM 12-10
Assortment Plan for Girls’ Jeans
Styles T R A D I T I O N A L
Price levels $20 $20 $35 $35 $45 $45
Fabric Reg denim Stone- Reg denim Stone- Reg denim Stone-
composition washed washed washed
Colors Light blue Light blue Light blue Light blue Light blue Light blue
B O O T C U T
Price levels $25 $25 $40 $40
Fabric Reg denim Stone- Reg denim Stone-
composition washed washed
SIZE
Length 1 2 4 5 6 8 10 12 14
Short 2 4 7 6 8 5 7 4 2 %
9 17 30 26 34 21 30 17 9 units
Medium 2 4 7 5 8 4 6 3 2 %
9 17 30 21 34 17 26 12 9 units
Long 0 2 2 2 3 2 2 1 0 %
0 9 9 9 12 9 9 4 0 units
Total 100%
429 units
08/21/97 * 13
Irwin/McGraw-Hill
08/01/97 * ©The McGraw-Hill Companies, Inc.,
131998
Irwin/McGraw-Hill
Levy/Weitz: Retailing Management, 3/e ©The McGraw-Hill Companies, Inc., 1998
TM12-12
Predicting Fads