Lesson 2-Merchandising Terminology, Marketing vs Merchandising

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FASHION MERCHANDISING LESSON 2: MERCHANDISING TERMINOLOGY MARKETING VS MERCHANDISING

Transcript of Lesson 2-Merchandising Terminology, Marketing vs Merchandising

Page 1: Lesson 2-Merchandising Terminology, Marketing vs Merchandising

FASHION MERCHANDISINGLESSON 2:

MERCHANDISING TERMINOLOGY

MARKETING VS MERCHANDISING

Page 2: Lesson 2-Merchandising Terminology, Marketing vs Merchandising

LEARNING OUTCOMES

• TO PROPERLY LEARN TO DEFINE AND UNDERSTAND BASIC MERCHANDISING CONCEPTS AND TERMINOLOGY

• UNDERSTAND THE DIFFERENCE BETWEEN MARKETING AND MERCHANDISING

Page 3: Lesson 2-Merchandising Terminology, Marketing vs Merchandising

Merchandising or Marketing??Remember.. The root word of

“Merchandising” is “Merchandise”.

Merchandise= Product

Therefore, Merchandising has everything to do with

PRODUCT

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Merchandising or Marketing??

Merchandising is used in different areas (e.g.): • Design• Sales and Planning (Wholesale Merchandise Planning,

Retail Merchandise Planning and Store Buyers)• Visual

The purpose of merchandising is to create a complete customer experience… to show them a cohesive presentation of that product.

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Merchandising or Marketing?Merchandisers (on the wholesale side) …

• Work with design teams to coordinate colors palettes and fabrics per season/group

• Work with design and sales to coordinate how many styles are presented and offered in each season per

group• Work with design and sales to decide product

classification ratios (e.g. how many tops to bottoms will be incorporated in each season per group)

• Work with sales to determine wholesale and retail costs per style/item to ensure corporate mark ups are met and

pricing is consistent (e.g. with brand and the market)

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Merchandising or Marketing?Merchandisers (on the retail side) …

• Work with wholesalers to determine their monthly/ quarterly and yearly plans (e.g. their budget- how much

$ they are allowed to spend on your line!)

• Determine the ratio of product categories they will carry in their stores (e.g. total quantity, then by “door”)

• Work with wholesalers to determine wholesale and retail costs per style/item to ensure pricing is consistent

(e.g. with brand and the market) and work out any promotional incentives

• Work with wholesale team to determine ad budget

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Merchandising or Marketing?Once final buys are made on that season’s line both

wholesale and retail are involved in:

• Revising and Finalizing their plans (based on current selling trends)

• Revising and Finalizing advertising/marketing budgets and plans for promotion strategies ( including

cooperative advertising, in store sales promotions, etc)

• Visual Merchandising (Fixtures, T- Stands, Signage, etc)

Page 8: Lesson 2-Merchandising Terminology, Marketing vs Merchandising

Merchandising or Marketing?Merchandising has to do with PRODUCT.

But it also has a lot more to do with NUMBERS and SALES than you may think!

Most merchandisers (on both the wholesale and retail end) spend just as much time working out pricing, costs, sales (losses and profits) than they do putting together their

ASSORTMENT.

The entire reason merchandising is about product and creating that customer experience….. Is so that the

product assortment is put together in an attractive way making it ….. SALEABLE!!!!!!

Page 9: Lesson 2-Merchandising Terminology, Marketing vs Merchandising

Merchandising or Marketing?So…

Now that you have a better understanding of merchandising……

You are all Fashion Marketing students….

What is the difference between Merchandising and Marketing???

What is Marketing??

Page 10: Lesson 2-Merchandising Terminology, Marketing vs Merchandising

Merchandising or Marketing?

Merchandising and Marketing work very closely together.

Once clear form of marketing a product is in the PRODUCT ITSELF!

The product itself is a marketing tool… but– products don’t sell themselves.

We need all forms of marketing efforts (advertising, PR, Promotions, Events, On Line, etc) to ensure we all reach

our common goal…. SELL SELL SELL.

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Terminology

We’ve thrown out some words today that you may or may not be familiar with, let’s

review them and include a few others

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Terminology

• Product Line: Line created and styled for wholesale presentation several times a year (market week).

Usually refers to moderate or better price points (“Collection” is the same as a “Line” but refers to high fashion/designer product line)

• Fashion Week/Market Week: industry event when designers or apparel brands show next season’s line to their buyers.

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Terminology Product Lines are by season and divided in

to groups (usually by color story and delivery month)

Example: Spring 2010 (PRODUCT LINE) February (Group 1- DELIVERY 1) March (Group 2- DELIVERY 2) April (Group 3- DELIVERY 3)

Each month is a delivery or group within each season’s (product) line.

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Terminology Each style is assigned a style number used to

identify each style on the line (e.g. style number for this jacket is # UD164C071).

This identification number is used for

manufacturing, ordering, inventorying and selling purposes.

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Terminology• (Wholesale) Assortment: Number of different product items (or styles) the wholesaler

will manufacture that make up the product line.

• Mark -Up- The difference between the cost price added to calculate the selling price (e.g. cost is $8, selling price is $10, mark up is $2)

• (Retail) Assortment: Number of different product items (or styles) the retailer stocks within a particular product line (the selection of items chosen from that particular line)

• (Retail) Assortment Plan (or “Buy” Plan): Aligns the product assortment with the buyers financial goals.

• • Open to Buy (OTB): the dollar amount budgeted for a retail buyer for inventory

purchases for a specific time period. (Once the buyer has made their assortment plan, they can figure out what they are still allowed to buy based on their OTB)

• Door: refers to a specific store location for a retailer. (e.g. the Sephora “door” on Huai Hai Lu showed a 10% increase in sales last month).

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Buyer for a day!

You are a buyer of ladies’ suits.It is market week (spring 2011) and you are currently working in the showroom preparing your assortment.

Based on your open-to-buy, you need to buy 4-6 six styles for February delivery….

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Buyer for a day!These are the styles being offered for this group

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Which group looks more cohesive or appealing? #1

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Which group looks more cohesive or appealing? #2

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Which group looks more cohesive or appealing? #3