Merchandising 4 Flashcards
Purchasing, Pricing, Displaying, and selling of merchandise
Merchandising
Goods that are bought and sold
Caskets Vaults Clothing
Urns Register books Etc.
Merchandise
Developing a merchandising plan. Also known as “sales objective” or “sales plan.”
merchandise purchasing
Planning =
profit (built into service fees).
Plan components
Merchandise
Selection of merchandise Cost and pricing Display
Steps in planning
Evaluate the market Evaluate sales history Determine product availability Consider supplier recommendations Establish product and service mix
Selecting suppliers – discuss with the vendors
Payment terms, availability of product, product support and quality.
Types of payment terms
Cash discount
Quantity discount
Rebate
Consignment
Cash discounts
Reduction of price for payment of an account within time limits established by the sales contract.
Terms: 2/10 net 30
2% discount if paid within 10 days Full payment (NET) due in 30 days
Reduction in amount of a bill when a minimum quantity of merchandise has been ordered. (caskets, embalming fluids)
Quantity discount (EOQ)
Return of a portion of a payment
Rebate
Supplier gives merchandise to an agent to be cared for or sold.
Payment is not made to the supplier until the merchandise is sold.
Consignment
Pricing of services and merchandise
pricing
Methods of determining prices
Markup Consumer value index Merchandise value ratio Fixed multiple Graduated recovery
RETAIL – WHOLESALE
MARKUP
Difference between merchandise (wholesale) cost and selling (retail) price.
markup
Percentage derived by dividing wholesale cost by the retail price.
Wholesale ÷ retail
Spending more money should equal more value for each dollar spent
CVI
Relationship between wholesale cost of merchandise and total cost of both service and merchandise to the consumer.
Merchandise value ratio (MVR)
A price determination method whereby the casket cost is multiplied by a constant factor.
Historically the fixed number has been three (3).
Fixed multiple
advantage of fixed multiple
easy to use and provides quality
disadvantage of fixed multiple
no improvement in CVI or no incentive to buy up.
The return of money produced by varying the amount expected on each selection.
The amount of markup (factor) varies with the cost of the merchandise.
Graduated recovery
Graduated recovery types
Increase
Decrease
Modified
Sales trend terminology
Average (mean)
Median
Mode
Quartile
the sum of a group of numbers divided by the number of units.
Also known as mean
Average (means)
- a value in an ordered set of values which represent the midpoint, whereby there are an equal number of values above and below the midpoint value
Median
the number that appears most frequently in a listing of numbers
Mode
a division of the total into four intervals, each one representing one-fourth of the total.
Quartile
– caskets sold in 2nd and 3rd quartile
Usually begin in the midrange at point of selection for sale. People usually stay or move either direction for selection
Range
The number of times sales in a given price bracket occurs over a fixed period of time.
Sales frequency
Price quotations
Different methods:
Itemization (FTC) Package pricing Bi-unit pricing Functional pricing Unit pricing (historical method of price quotation)
The method of price quotation by which each unit of service and/or merchandise is priced separately.
Requirements of FTC
Itemization
The pricing method which groups together selected services and/or merchandise. Example: Unit pricing Bi-unit pricing Functional pricing
Package pricing
The pricing method which groups together selected service and/or merchandise.
Package pricing
A method of price quotation showing separately the pricing of the service to be rendered and the price of the casket
Bi-unit pricing
A method of price quotation in which the itemized charges are combined into several component parts.
NOT like itemization where it is all broken down
Functional pricing
Historical method used prior to FTC regulations
A method of price quotation which creates one total price package for both service and merchandise
Unit pricing – COUSIN RAY
Any item of service or merchandise described to a purchaser as a “cash advance,” “accommodation,” “cash disbursement” or a similar item. Any item obtained from a third party and paid by the funeral provider on the purchaser’s behalf.
Cash Advance Items
Common to all forms of price quotations must comply with applicable federal and state laws. In most states, funeral directors, can only charge the price of the cash advanced items and handling fee – cannot be charged for the these items
Cash advance
a written memorandum – legal contract. Family does not have to pay for embalming when not requested. Texas does not require embalming but if not able to refrigerate body must be embalmed family can refute the charge.
Contract
Selection Room Types
Full size caskets – Texas Law and National Law
Fractional Displays Quarter or End Panels / Pictures
Catalog Computers
Selection Room Size NATIONAL BOARD
Caskets – MINIMUM 12 (5 according to Texas Law, which would include 2 full sizes)
Maximum – 30
Selection Room Size
40 to 60 square feet per casket is recommended
LIGHTING
90 to 100 foot candles of illumination at casket level
Foot candle amount of illumination produced by
one candle at a distance of one foot.
LIGHTING
shining on an object
Direct
LIGHTING
reflected illumination of an object
Indirect
LIGHTING
illumination produced by a tubular electric discharge lamp, fluorescence of phosphors coating the inside of a tube
Fluorescent
LIGHTING
the illumination resulting from the glowing of a heated filament.
Incandescent
Casket display and equipment
Distance from floor to bottom of casket.
Should be 26 to 30 inches.
A wheeled collapsible support for the casket, used in the funeral home, church, or home.
Church truck
The stand or support upon which a casket rests in the selection room.
Also called a casket standard
Casket stand
A device upon which two or three caskets are placed, one on top of the other for display.
Casket rack
several caskets used to familiarize families.
Demonstration Group
Traffic / Casket arrangements
increasing or decreasing in price
Consecutive method
Traffic / Casket arrangements
woods, copper, etc
Grouping method
Methods of presentation
Direct presentation
Indirect presentation
The method of selling caskets whereby the funeral director remains in the selection from the entire selection period.
Direct selection room presentation (procedure)
Direct selection room presentation (procedure)
Advantages:
Some families prefer the support
Direct selection room presentation (procedure)
Disadvantages:
No privacy and restricts communication.
May influence Misrepresent need of family
Makes introductory presentation to family
Leaves the selection room Returns upon request
Indirect selection room presentation
Indirect selection room presentation
Advantages:
Privacy Influences by funeral director eliminated
Communication occurs Information may better analyzed
Indirect selection room presentation
Disadvantages:
No support; funeral director not available for questions; information may be ignored.
