Assortment Flashcards
What is raison detre of retailers?
reduce transaction costs!
each manuf to each customer gets to be a lot
but each manuf to one retailer to each cust is less!
What is actually offered by retailers (the extended product offering)
- assortment
- convenience
- service
- image
- service
- convenience
What are the options for product groupings?
groups = automotive products
classes = cars, SUVs, trucks
categories = dairy, seafood, condiments
brands = within category
lines = Coke: soft drinks line and water line
SKUs = stock keeping unit fpr EXACT product (include brand, package, size, etc.)
Grocery does category and SKU
what are the 3 dimensions of assortment size?? benefit of each?
- Variety: Number of Categories (high variety = lots of categories – Walmart)
Benefit = one stop shopping - Breadth: Number of Brands (large breadth = lots of brands – hudsons bay)
Benefit = comparison shopping - Depth: Number of Units of Each SKU (amount of stock)
Benefit = don’t run out when lots of people want the same thing
what is a category killer?
few categories but want EVERY brand
–> kills the category because people learn they dont have to go to a speciality store for specific brands
ex: go to toys r us for lego and other toys instead of going to lego store then also other toy store
What are the varieties in Sport Chek? Breadth? Depth? Brand types?
Variety = footwear, outerwear, apparel, equip, fitness, team sports
Breadth = 300 brands (high)
Depth = 50 per category
Brand types = sporting goods, athletic wear
Do private label products need to be pushed? How about recognizeable brands?
yes push private label bc people ajhve heard of them
no push well knwon brands cuz yknow theyre wll known
What must assortment be supported by?
- By Inventory System
- By Space
- By Buying Function
- By Control
- With Ancillary Services
What are some key jobs in assortnment? what do they do? Which is most important?
- Buyers: Do assortment selection (go to trade shows, etc)
- Distributors: Allocate merchandise across stores (headquarter level, decide how much product to each branch, etc)
- Store Managers: Do employee management and space planning (mismanaged can negate any success in the above ^)
most important = whichever most important for industry
walmart: needs store manager most to have store run well
high fashion store: need best products so buyer important
What is the buying cycle?
- Determine Needs
— Staples, seasonals, styles, perishables - Select Supplier
— Price, quality, reliability, service - Negotiate Price
— List Price, discounts, freight charges - Handle Inventory
— Receiving, checking, marking, stocking
How to manage inventory size?
balance merch investment and holding costs with ordering costs
What is ABC analysis?
rank-orders merchandise by some performance measure determine which items:
- should never be out of stock. (A products –> top 20% of products account for 80% of sales)
- should be allowed to be out of stock occasionally (B class)
- should be deleted from the stock selection (C class –> not contributing any or barely any sales)
What is a sell through analysis
comparison between actual and planned sales to determine whether early markdowns are required or whether more merchandises is needed to satisfy demand.
What is multiattribute model
uses the importance of various issues and the vendor’s performance on those issues to evaluate each vendor
(ex: eval on vendor service, timeliness, quality, etc, then rank importance of these qualities, then do weighted average for each rating of vendor)
