FM206 Midterm

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187 Terms

1

retailing

consists of the business activities involved in the selling of goods and services to the ultimate consumers

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online retailing

one of the key forces that’s dramatically impacting traditional shopping

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wholesaler

organization that purchases merchandise from a manufacturer in large quantities and resells the goods in smaller amounts to retailers

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buying/merchandising

the business activity that involves selecting and purchasing products to satisfy the wants and needs of consumers

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  • forecasting the wants and need of consumers

  • planning merchandise assortments to satisfy consumer wants and needs

  • selecting vendors from whom to purchase merchandise

  • negotiating contracts w/ vendors

  • pricing merchandise

  • keeping sales and inventory records

  • reordering merchandise

buying involves:

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seamless

retailers need to ensure that the brand experiences is____ and constant at all touch points

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bounce rate

the porting of users who click away while waiting for a page to load

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showrooming

consumers visit brick-and-mortar retail stores before they go online to compare prices and make a purchase

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reverse showrooming

consumers research products/services online before purchasing them in-store

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social commerce

e-commerce merging w/ social media

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omnichannel retailing

a concept that’s more focused on consumers being able to interact w/ the retailers from whatever touchpoints are appropriate to them wherever they’re in the purchasing process

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Metaverse and social media

retailers are using marketing from the ______________to draw ppl into brick and mortar

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transparency and the adoption of technology

____________are the greatest developments to emerge from the supply chain crisis

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mini-fulfillment centers

stores are becoming________

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store cluster

differentiate demographics and psychographics in store distribution

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purchase order

details all merchandise that is on order

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convenience products

customer is not willing to spend time, money, and effort in locating, evaluating, and purchasing

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collection merchandise

merchandises many classifications together in one group

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fashion merchandise

will have a high demand over a short period of time

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classification

a specific category of merchandise

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specification buying

changes made to a garment that differentiate it from the competition

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broad and shallow

10 different style of jeans, one in each size

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quantity discounts

price reduction at cost for making a large buy

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markup

the cost of goods to calculate retail price

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key item

a style to be bought as a big volume producer

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trend

the movement or direction of fashion

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narrow and deep assortment

1 style of sweater in 10 colors and sizes

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private brands

create exclusive product for specialty stores

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basic merchandise

has stable consumer demand

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subclassification

a smaller more specific category of merchandise

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MSRP

manufacturer suggested retail price

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pure play retailer

a retailer who only operates online

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omni-retailer

a retailer who operates online and brick and mortar

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tops to bottom ratio

how many tops are bought to how many bottoms

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penetration to total

the part divided into the total

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sales volume

a key measurement of the buyer’s performance

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soft lines

apparel, accessory products for home

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hard lines

sporting goods, appliances, furniture, toys, lawn and garden products

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discounters and mass merchants

emphasis on one-stop shopping to meet the needs of a family; appeal to consumers who value savings over service

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department stores

sell variety of merchandise for the individual and the home

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specialty stores

sell specific product catefories

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outlet stores

focus on selling slow movers, out of date merch, factory overruns

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  • right product

  • right price

  • right time

  • right place

  • right quantity

the five r’s of merchandising

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ultimate consumer

the individual or group that will consumer the product

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assistant buyer

buyers in training

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planner

monitors stock levels by store and tracks key items by sales

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category manager

in-store expert in visual merchandising, pricing, and managing sales of a specific group of products

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merchandising analysts

responsible for identifying sales trends, maintaining desirede inventory levels and assortments

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49

superstore

refers to stores that are bugger than what would normally be found selling a particular category of merchandise

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supercenters

mega-supermarkets and general merchandise stores that stock everythin from food to small appliances under one roof

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warehouse clubs

huge warehouse that sell just about everything in large quantities

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specialized superstores/category killers

offer one to three categories of merchandise in a tremendously large assortment at discount prices

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chain store

two or more stores under single ownership

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bib-box retailers

a store that occupies an enormous amount of physical space andoffers a variety of products to its custoemrs

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centralized buyin

occurs when all buying activities are performed from the store’s central headquartersc

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entralized merchandising plan

A central office representing a group of stores has complete responsibility for the selection and purchase of merchandise for all the stores

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warehouse requisition plan

used only by stores carrying basic merchandise; each store manager is allowed to requisition the assortment they wish for the store from the regional distribution centers pre-selected by headquarters

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product specialists

buyers at chain store become:

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owner

in a small, independent store, the owner is responsible for all buying duties

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  • steady flow of merchandise is provided

  • sales forecasts are more reliable

  • a specialist is making the buyin decisions

  • expense are reduced

  • purchasing power is conolidated at headquarters

advantages of centralized buying

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  • adjusting merch selection for local conditions may be difficult

  • can lead to lack of cooperation b/w buyers and store managers

  • maintaining enthusiastic and knowledgeable sales associats is a challenge

drawbacks of centralized buying

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62

control

 This department would be responsible for safeguarding the firm’s assets and is usually divided into accounting, credit, and financial control.

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operation

This department would typically be responsible for the stockroom, maintenance, delivery, receiving, and customer services.

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promotion

responsibilities of this department would usually include advertising, visual merchandising, public relations, special events, and fashion coordination

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  • gross margin

  • profit

measuring the success of strategic decisions

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gross margin

sales minus cost of goods sold

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profit

money that remains after operating expenses have been subtracted from the gross margin

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  • increase sales

  • decrease cost of goods

  • decrease operating expenses

measuring the success of strategic decisions

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net sales - COGS

gross margin calculations

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gross margin - operating expenses

profit/loss calculations

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departmentalization

organizing different store activities into departments or divisions

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functional departmentalization

activities of a similar nature are grouped tgt into a major area of responsibility and headed by an individual who reports to the owner or CEO

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product line departmentalization

group merchandise by categories

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geographic departmentalization

breaks the organization down bby regions of the country

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organizational chart

a chart of internal structure that indicates all the employees and their relationship to another

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profit

the amount of money that remains after operating expenses have been subtracted from gross margin

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net sales

the real volume of sales that have occurred

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cost of goods sold

the actual cost of the merchadise that was sold during the period

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merchandise mix

the types or mix of products that are available for customers to purchase; must be frequently monitored

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product line

a group of products that are closely related bc they function in a simialr manner

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breadth

the number of product lines or brands carried within a product classification

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broad breadth

allows the retailer to appeal to a larger market

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narrow breadth

usually allows the store to offer fewer brands in a larger number of styles, colors, sizes, and materials

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depth

the number of choices offered to customers within each brand or product classification

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target market

the type of products that you purchase must be matched to the wants and needs of this

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assortment planning

involves determining the specific quantities and characteristics of each produc in relation to brands, colors, sizes, and materials

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  • organizational structure & size

  • store policies

  • types of merchandise

  • variety of merchandise

  • target customer

  • financials

factors affecting scope of buying

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impulse products

irresistable urge to purchase

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specialty products

usually accepted in well-known brands

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national brands

dominates sales bc of national advertising support; represent quality to many custoemrs

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private brands

usually more profitable to retailers bc they have more control over merchandising decisions

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generics

unbranded items in plain packages that receive secondary shelf locations and obtain little or no advertising support

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  • the compatibility of the new product with existing merch

  • potential profitability

  • placement of existing products within the PLM

  • the appropriateness of the new products for your customers

  • the ability of the competition to offer the same or similar products

before adding new products, consider:

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product life cycle

illesutrates the expected behabior of a product over its lifetime

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cannibalization

when potential slaes of existing products are lost to new or similar items

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  • decide what classification of products a store will carry

  • determine the brands and price for each subclassification

  • idnetify the general characteristics of an item that customers may consider when buying and make purchases according to that

  • decide on the proportion of one classification to another

  • calculcate the specific number of unit to purchase

steps in assortment planning

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97

market

a group of people with the ability, desire, and willingness to buy

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market segmentation

  • demographic data

  • geographic data

  • behavioristic data

  • psychographic data

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  • past sales

  • internal forces

  • external forces

  • target market

  • competition

  • trends

factors that affect an assortment plan

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positioning

identifying a group of consumers and developing retail activies to promote

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