Lecture Management of retail buying – Chapter 4: Merchandise assortments

Ch. 4: Merchandise Assortments
• The different types of brand identification, their 
potential benefits & challenges
• The importance of private­label merchandise in 
today’s marketplace
• Theories about the optimum breadth & depth of 
assortments
• How demand and selection factors, seasons & (in 
apparel) size, fashion, & fit all work to influence 
assortment & buying patterns
• Setting policies about assortments for buyers to work 
from

Copyright © 2006 by John Wiley & Sons, Inc. All rights rese


Private­Label Brands

PROS                                  CONS
•
•
•
•
•
•
•
•

More variety for consumers
Specialty and ethnic item 
availability

Cost advantages
Increased customer loyalty
Better profit margin for 
retailers
Positive store image for 
“specially selected” items
Increased shelf space for 
some manufacturers
Good alternative to pricey 
“name brands” for smaller 
retailers

•

•
•
•

•

Store image issues may 
backfire with consumers: 
second­rate, “off­brand” 
items
Less financial support from 
competitive manufacturers
Greater difficulty ensuring 
quality, product consistency
Strained relationships with 
manufacturers’ other 

retailers
Lower profit margins for 
manufacturers

Copyright © 2006 by John Wiley & Sons, Inc. All rights rese


Assortment Planning: Terms to Know
• Breadth and depth (“wide and shallow,” “deep and 
narrow”)
• Model stock
• Balanced assortment
• Pulling power
• Net marginal productivity
• Dominant (or “competent”) assortment
• Demand rigidity
• Classification
• Classification controls
• Product life cycle

Copyright © 2006 by John Wiley & Sons, Inc. All rights rese


Demand Rigidity Factors
• The product’s primary or intended use.
• Secondary considerations – “Wants” that, if 
necessary, may be substituted.
• Purchase habits typical of this type of product 
– Is it a convenience or a necessity?
• Price lines – Both high­end and bargain 

prices are considerations here.
• Urgency – How soon is it needed? This 
determines how selective the shopper can be.

Copyright © 2006 by John Wiley & Sons, Inc. All rights rese


Setting Assortment Policy
• The nature of merchandise carried in the 
store
• Characteristics of the trading area
• Community needs and special attributes that 
might meet them
• Comparisons to competitors
• A price line that fits the target customers
• Availability of capital
• Realistic view of merchant’s capabilities

Copyright © 2006 by John Wiley & Sons, Inc. All rights rese