Merchandising in marketing

 Merchandise known as merchant wholesalers is regarded as independent firms that purchase a product and resell it to other manufacturers, wholesalers or retailers but not to the final consumer. They provide space for permanent showrooms and exhibit goods and products.

Features of Merchandising

A merchandise marketing activity is characterized as the following:

I. Packaging: This is regarded as the most distinctive marketing effort performs by merchandising.

Functions of Packaging

1.protection of products

2. Identification of products

3. Information source

4.  Enhance disposal

5. Enhance channel acceptance.

ii. Branding:

This is one of the most essential information elements that consumers use to simplify buying decisions and minimise purchase risk. It states the attributes and general image of a product. Brands include the product name, logo, slogans, trademark etc.

Functions of branding

1. It attracts attention

2. It aids memorability

3. Communicate the positioning of the product.

4. Distinguish the product from competing brands.

iii. Labelling: Labelling should be consumer/customer-friendly, hence, it must perform the following functions.

Functions Labelling

1. Proper identification of the identity of the manufacturer

2. State the expiration of a product.

3. State the usage of the product

4. Provide detail instructions about other essential matters.

Conditions in Merchandising

Conditions in merchandising include the following:

i. Warehousing cost:

This relates to who bears the cost of keeping the products, i.e. is it the manufacturer or the wholesaler merchant. Both parties must agree so as to avoid unnecessary problems.

ii. Cost resulting  from a reduction in inventory value:

Cost reduction in inventory management is vital in an exploding market that is continuously attracting more competition. As competition increases, logistics businesses must take a few straightforward steps to reduce inventory costs to stay in the game.

Here are five ways to do just that.

1. Slash supplier lead time

You can keep inventory levels (and therefore costs) lower by speeding up supplier lead times. The median supplier lead time for purchased materials is eight days. If you can shave two or three days off of that, it will have a major impact on your bottom line.

Shop around for suppliers that can meet your needs, quickly. If you’re already working with a supplier that isn’t moving as fast as you’d like, think about the costs of staying with a slower supplier.

You need to keep more safety stock around for orders that need to be filled, and that means you’re paying to warehouse stuff you wouldn’t need to have at all if your supplier could deliver inventory to you more quickly.

Calculate how much you’re paying for that safety stock, and you’ll have an idea of what kind of savings are possible if you find a better supplier.

2. Get rid of obsolete inventory

Safety stock isn’t the only product you’re carrying that you don’t need. Chances are you’ve got obsolete inventory, too.

It’s tough to get rid of stuff when you’re in the inventory management business. Those are products, after all—products that are theoretically worth real money. But if they’re obsolete and not selling, they’re just taking up space. Take a deep breath, and chuck ’em (or recycle).

Resist the hoarder mentality. It’s easy to think that the additional space you’re dedicating to that inventory is keeping the valuable product on hand and a good financial decision, but you’re really just throwing good money after bad by paying to store stuff on the hope that it’ll sell at some point.

Gather data on how much of your inventory consists of items that haven’t sold in the past year. A full breakdown of what you’re spending on such products is almost always eye-opening.

Once you’ve gotten rid of the obsolete stock, you need to prevent it from building back up. Adjust your demand forecasting based on expected future sales so you’re ordering the right quantities of merchandise. This is a fairly simple way to reduce costs in inventory management, but most managers get so caught up in the day-to-day demands that they never get around to it.

3. Choose better software

Quality logistics software can do incredible things for your business. And there are dozens upon dozens of options out there—231 in our directory, to be exact.

You need to keep track of your inventory levels, or risk overstocking and seeing your inventory costs balloon. If you’ve been relying on a simple spreadsheet or a basic software solution with limited features to manage everything, you probably aren’t getting the full picture of your inventory situation.

Find a software solution that keeps inventory info automatically up-to-date, so you can quickly make decisions when necessary.

Logistics software also helps centralize control of your inventory, which cuts costs by eliminating redundant effort. This is particularly important for complex logistics operations that require a detailed inventory plan.

Centralizing supply chain models also helps you avoid the excess and obsolete stock. Remember: it’s always better to be preventive than reactive.

4. Set up automatic re-orders when inventory gets low

Thanks to technological advancements, automation is accessible even to small businesses. You must use this to your advantage.

When your inventory runs low, automatic re-orders ensure you aren’t left with shortages. The software combined with a perpetual inventory system will help you avoid those costly shortages.

A perpetual inventory management system provides real-time inventory updates by tapping into a database that tracks all of your inventory to determine when supplies are running low and when it’s time to re-order—all without any human input.

5. Monitor your SKUs

Stock keeping units (SKUs) are identification codes for products that help you track them through inventory. Relatively straightforward products may have just one SKU, but items that come in multiple shapes, sizes, and colours (like clothing) have multiple SKUs.

This can become an inventory headache, as products with multiple SKUs can send confusing signals when it comes to demand. You might think that there is no interest in a particular product, only to find that the reason people aren’t ordering that shirt is that the size they want is never in stock.

For these products, you need to use software that can manage all of your SKU data in one place so you know how these products are really performing on the market.

iii. Transportation cost:

The expenses involved in moving products or assets to a different place, which are often passed on to consumers. For example, a business would generally incur a transportation cost if it needs to bring its products to retailers in order to have them offered for sale to consumers.

iv. Distribution tasks:

The process of distribution refers to a series of activities which takes place between the time of the production of goods and the time they reach the final consumers or put it another way, the time taken up by the production unit of such activities are part of a continuing process of productions.

After the distribution objectives are set, it is appropriate to determine the specific distribution tasks (functions) to be performed in that channel system. The channel manager must be far more specific in describing the tasks and must define how these tasks will change depending upon the situation. An ability to do this requires the channel manager to evaluate all phases of the distribution network. Tasks must be identified fully, and costs must be assigned to these tasks. For example, a manufacturer might delineate the following tasks as being necessary in order to profitably reach the target market:

provide delivery within 48 hours after order placement

offer adequate storage space

provide credit to other intermediaries

facilitate a product return network

provide readily available inventory (quantity and type)

provide for absorption of size and grade obsolescence

v. Materials handling:

Material handling involves short-distance movement within the confines of a building or between a building and a transportation vehicle. It uses a wide range of manual, semi-automated, and automated equipment and includes consideration of the protection, storage, and control of materials throughout their manufacturing, warehousing, distribution, consumption, and disposal. Material handling can be used to create time and place utility through the handling, storage, and control of waste, as distinct from manufacturing, which creates form utility by changing the shape, form, and makeup of the material.

Functions of Merchandising

The following are the functions of merchandising:

I. Nearness to the population/target market.

ii. It helps the producers of some perishable goods to have a rigid distribution control to avoid spoilage.

iii. It affords products to have a high value per unit

iv. It helps in spreading the cost of promotion.

v. It helps to create a job for thousands of unemployed.

vi.it helps in product packaging and serves as a source of information.

Scrambled Merchandising

“This is the handling of merchandise lines based solely on the profitability criterion and without regards to the consistency of a particular product line with other products in retailer’s product mix”.