Module 4: The Buying Process. Lesson 1 Determine the needs and wants of retailers
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- Slide 1
- Module 4: The Buying Process
- Slide 2
- Lesson 1 Determine the needs and wants of retailers
- Slide 3
- Controlling the Flow of Goods A retail business exists to make
a profit for its owner Retailers must determine the right time and
the right price for purchasing goods to resell A balanced inventory
of goods must be available
- Slide 4
- Buying Goods In a small, independently owned store, the buying
function is performed by the owner Sometimes small independent
stores unite to form a voluntary chain (like IGA or Home Hardware)
in order to place large combined orders with suppliers In large,
independently owned or corporate chain stores, the individual
department head usually does the buying Sometimes these stores
assign specialized buyers to be responsible for goods sold in two
or more related departments
- Slide 5
- Buying Goods When a corporate or franchised chain is closely
controlled from a central office, merchandise is usually selected
by a central buyer or buying department Goods are shipped to local
stores directly from either a producer or wholesaler or from a
central warehouse owned by the retail chain The type of merchandise
stocked by the store can determine who a buyer will be A
high-priced fashion store might employ a resident buyer A resident
buyer (usually located primarily in Montreal, Toronto and
Vancouver) acts as an intermediary for the store and provides the
retailer with regular market info on style trends and new colours
or models
- Slide 6
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- Duties of a Buyer One of the most exciting and demanding jobs
in merchandising The buyer must constantly share info and views
with the person responsible for selling (usually the sales
manager)
- Slide 8
- Product Planning Begins with the choice of products to offer
its targeted customer group Pricing, advertising and all other
variables affecting sales are influenced by product planning A
buyer: accurately forecasts the type and quantity of merchandise
that a stores customers want, prepares a merchandising budget to
determine how much the store can afford to spend to meet customers
demands and makes merchandise mix decisions
- Slide 9
- Merchandise mix refers to the type, quality, assortment, and
number of merchandise lines carried by the store Buyers think in
terms of product lines in terms of a series of related goods
Purchasing a buyer actually purchases on the stores behalf Buyers
find and evaluate various merchandise sources; Decide which
suppliers to buy from; Negotiate price, credit, shipping
arrangements and return privileges; and Sign the contracts
outlining agreements with suppliers
- Slide 10
- Pricing buyers may be asked to establish prices of goods for
resale and to identify the need for price adjustments on current
stock A buyer continually monitors the speed at which items are
selling Slow-selling merchandise may be cleared through a sequence
of price reductions
- Slide 11
- Sale Promotion Planning buyers frequently select items to be
featured in the retail businesss advertisements buyers work with
advertising and sales promotion staff to plan displays and to carry
out special sales events A buyer provides sales personnel with P.O.
P. (Point of Purchase) advertising materials and literature
received from suppliers
- Slide 12
- Record-keeping and Analysis all records related to merchandise,
such as purchase orders, are the buyers responsibility The buyer
continuously monitors merchandise sales and examines related
records to be certain that merchandise mix and promotional goals
are being met
- Slide 13
- Supervising a buyer might be responsible for selecting,
training and supervising various staff members Assistant buyers
Stock clerks Sales personnel A buyer might be responsible for
periodic physical inventory counts and the presentation of new
products or product lines to those involved in sales A buyer is
usually involved in setting central policies for the store
- Slide 14
- Sources of Buyer Information Customer profiles Past records and
statements Information supplied by customers Surveys and pretesting
new products Focus groups Customer evaluation cards Salespersons
experience with customers Wholesalers sales representatives and
producers agents Resident buyers and other buyers
- Slide 15
- Sources of Buyer Information Attendance at special events Trade
shows Suppliers showrooms Preseason showings Tours of producers
facilities Comparison shopping Continued formal education
Conferences, seminars,and courses Trade journals
- Slide 16
- Focus on Retailing Assignment 1. Create an organizer to
identify the types of information provided to the store buyer from
each of the sources listed. Sources of Buyer Information Type of
Information Provided Customer profile Past records and statements
Wholesaler and producer Sales representative Trade shows Tours of
producers facilities Trade journals
- Slide 17
- Determining Merchandise Mix (text page 373provide a
definition/examples for each bullet) Types of Goods Convenience
Goods Staple Goods Impulse Goods Shopping Goods Speciality Goods
Product Mix: includes research, product development, packaging and
branding. To identify it as part of the McDonalds product mix, all
products have Mc in the name. Promotion Mix: consists of
advertising, sales promotion, and publicity. Pricing Mix: price
charged for product Place Mix: includes physical distribution,
storage, inventory management, and channel selection.
- Slide 18
- Branding (text page 374provide a definition/example for each
bulleted item) Brand name National Brands Private (Store) Brands
Generic Brands
- Slide 19
- Branding Assignments Assignment #1 Assignment #2 Assignment #3
Assignment #4
- Slide 20
- Product Style (text page 377-78provide a definition/example for
the bulleted terms) Fashion Fad Assignment