Merchandising

Merchandising

Merchandising is based on the techniques of presenting the products at the sale place, using everything that could be more attractive: conditioning and presentation, fractionation, packing, exposure and display of goods in a special place designed for a certain type of sale. Therefore, in order to determine the consumer to purchase new products, the use of old sales methods is no longer efficient: the new techniques must adjust to the new products.

Merchandising is the promotion of goods and/or services that are available for retail sale. Merchandising includes the determination of quantities, setting prices for goods and services, creating display designs, developing marketing strategies, and establishing discounts or coupons.

In retail commerce, visual display merchandising means merchandise sales using product design, selection, packaging, pricing, and display that stimulates consumers to spend more. This includes disciplines and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.

Merchandising helps to understand the ordinary dating notation for the terms of payment of an invoice. Codified discounting solves pricing problems including markups and markdowns. It helps to find the net price of an item after single or multiple trade discounts and can calculate a single discount rate that is equivalent to a series of multiple discounts. Further it helps to calculate the amount of cash discount for which a payment qualifies.

The National Marketing Association in the USA considers modern merchandising as being “the totality of techniques and previsions required in order to sell the right product in the right place, in the right quantities, at the right time and at the right price”. It is the so called rule of the 5R which are the (1) The Right Product, (2) The Right Quantity (3) The Right Place (4) The Right Time and (5) The Price.

Therefore, modern merchandising is based on the techniques of presentation of the products at the sales place, using all that could be more attractive: conditioning and presentation, fractionation, packing, exposure and display of products in a certain place reserved for a certain type of sale.

1. The Right Product: The right product is the unique compound of three elements: product’s functions, intrinsic qualities, support system. “What does the client really buy?” is the question that appears in connection to the product.
2. The Right Quantity: It depends both on the need to buy and use of the consumer and the need to buy and sell of the seller. The factors that the trader has to take into account to determine the right quantity are:
1. Number of items. Some buyers need only one item, while others need more items. This is determined by the buying frequency, by the price sensitivity of the client, by his/her marital status, etc.
2. The size of the item. Products of diverse sizes (medium, small, large) have a different impact upon the consumers.
3. Unit of measurement (kilogram, liter, piece, etc);
4. Necessity.

It refers to the decision of buying both of the consumer and of the seller. The buying decision of the seller is more difficult as a too small quantity of a certain product creates stock rests, and in too large quantities, leads to larger stocks.

3. The Right Place: In order to choose the right place there are more elements to be taken into account: market extent, market covering, size and design of the shop.
For the location of a shop, a trader may choose a commercial area, or a regional or a neighborhood commercial center.
4. The Right Time
In order to determine the right time, the traders have to take into account: the calendar time (hour, day, week, month, year), season, certain life events of the consumer: birthdays, weddings, graduations, etc., work time. Also it is important the time that passed from the latest acquisition, especially in the case of staple products and the long use ones.

5. The Right Price: Merchandising involves a certain view characterized by the following defining elements such as planning, orientation towards clients, conceiving the shop as a system, change and innovation

Therefore, modern merchandising is based on the techniques of presentation of the products at the sales place, using all that could be more attractive: conditioning and presentation, fractionation, packing, exposure and display of products in a certain place reserved for a certain type of sale.

Promoting the idea that merchandising is, first of all, “perfect knowledge of the sales point”, the French specialists consider that the rational use of each linear meter of furniture, not only as length, but also as height, depth, became the major issue of the trader, on which it depends more and more the efficiency of a shop activity.