Merchandise Management

The Power of Optimization

Your Experience- Buyers rejects you. They do not understand or appreciate your products.

Your Solution- Learn to understand and use Category Management to your advantage and earn money.

Category Management is the process of managing a retail business with the objective of maximising the sales and profits of a category. -To help retailers and suppliers implement Category Management quickly and effectively, or improve their existing processes RETAIL VISION is required.

Basically, Molton Brown has broken down their products into the categories as follow:

1. Gifts
2. Men
3. Bath & Body
4. Hair
5. Make-up
6. Skin care
7. Hand Wash & Lotion
8. Candles & Scent
9. Travel
10. Old Friends

Where does my product fit in?

we suggest-

zero in on the category your product belongs to by undertaking field research at the stores that belong to the chains you want to contact

then

register ALL the products and their street prices that the selected retailer has in the assortment that could be in the category

after

start focusing on the chains with the largest number of products in your category as they(the stores) obviously understand your product best and are more likely to test your product

Developing your Category strategy

Once you know which category (and cell within the category) your product belongs, you can start developing your strategy.
Focus on one of the following 3 strategies:

1. Pushing out competing product-

Evaluate the strengths and weaknesses of your product compared to a specific competing product, in Molten Brown's case, compare the sales of the different scent and flavours in the category that the customer prefers.-All retailers are looking for category killers. A category killer is a product that generates almost all the sales in a category.

2. Expanding a cell (on behalf of another cell)

not all perfumes and scents and body care products will go in the store, hence we can increase the hype on a certain non-moving item and make it seem as a whole collection in itself.

3. Establishing a new type of product (and category).

some products after certain time do not really fit into the existing category they were originally placed in. Selling-up strategy is an old trick where retail attracts customers with low prices that often mean lower profits.

Category ambassadors

So even though it is still the retail chain that will decide if your product will be part of the assortment a category ambassador can actually help by becomming YOUR ambassador.

all about saving cost!!!

By analyzing detailed spending, transactional and pricing data, and continuously monitoring the supply markets, we can

1. routinely identify and implement solutions to further reduce maverick purchasing
2. drive incremental unit-cost reductions through additional sourcing, appropriate specification changes, substitution, better demand management
3. actively target cost-avoidance opportunities in appropriate commodities.

Rationale behind the category management

• Due to customer fragmentation, category management can tuned to various customer needs
• Ease of searching a product
• Creating a pleasant atmosphere so that customers will stay longer
• Assist promotions planning
• Assistance with consumer behavioral/shopping research

at the end it is all about the categories being defined by the customers and making it easier for the customers to get an overview of the products available.

3 Elements in Retail Strategy Target Market

Target Market

To define a target market for your business plan, you should research the potential buying audience for your product. This could range from millions of people if you are starting an online business, to a few thousand individuals if you are opening a retail store in a small town.

1. Study your product or service and determine the most likely consumer.
2. Define the age range, gender, marital status, and income level of the individual most likely to be your customer. 3. Explain the motivations for purchasing your product or service.
4. Is it a necessity or luxury?
5. What value does this product bring?

It's best not to assume or guess.

this is what we decided are the target markets of molten brown.

• Both gender aged 21 & above with a steady income
• We feel that they are targeting individuals who are self-conscious
  

We feel that the target market is expanding due to the growing interest in going green as well as being health conscious. Molton Brown also faces little competition in the industry (body shop, l'occitane, crabtree and evelyn) therefore being able to have more profits.

Retail Format

Basically in a retail format the retailers make their products available to customers in numerous ways at the ease of satisfying a need by the consumer.

In our perspectives, Molton Brown is trying to potray a premium body care product image, by enabling their customers to have ease to choose from a huge array of items at their comfort or even their own home.

• Molton Brown is a specialty store and is located at Raffles Hotel lobby and Takashimaya Shopping Center to uphold an premium brand image
• Molton has a online store for e-buying and home delivery of products.

Bases for Building Sustainable Competitive Advantages

• Exclusive merchandise - They endeavour to use as many naturally derived ingredients as possible, sourced from sustainable sources around the world.

• Their range of products is unique and therefore our ingredients are unique as well. Using the finest ingredients that they source from all over the world depending on the kind of product we want to create (eg: inspiring wild indigo from the Himalaya mountains, relaxing yuan zhi root from China or maracuja passion flower seed oil from the Amazon)

• They have very committed staff with experience and ready to help with any difficulties, are very friendly and warming when it comes to serving us - being consistent with every customer.

• They have a very well organised supply chain back in London, making their supply arrive on time and always available.

• Molton Brown's iconic bottle is fully recyclable, and will be launching ranges in 2008 taking advantage of the most recent environmental advances in packaging. As a business they are currently constructing

1. A five-year plan to become a market leader in environmental ethics

2. Focussed on the reduction of carbon emissions and waste.

• Molten Brown supported during 2008 Cancer Research UK and ChildLine, making it to have a long history of supporting many worthwhile causes.

The Retailing Environment

To discuss more about the retailing environment, we chose Molton Brown as our example.

Molton Brown is a specialty store which started out as hair salon in London, 1973.


By 1980s, Molton Brown began selling plant-based make-up, hair, body, skin and grooming products. As they became famous, they were approached to supply top-end stores,airlines, and hotels in cities around the world.

Their aim is to produce natural products using plants, flowers and marine products and have been against animal testing. Their mild products enable them to be used by people who have sensitve skin

Now you can experience their creations in more than 70 countries world-wide, in their emporium, spas, online and in world's leading luxury hotels and airlines.


Variety & Assortments

They have a wide range of products from

• Men's Grooming - shaving, body wash, cologne, hair wash etc
  
• Bath & Body - body shower, body soother, body cream, body shimmer, body lotion etc.
  
• Hair - hairwash, hair condition, hair treatment
  
• Make Up - face, lipstick & gloss, eye make-up
  
• Skincare - cleansers and moisturiser
  
• Hand Wash & Lotion - hand wash and hand lotion
  
• Candles & Scent - candles and roomspray
  
• Travel packs - travel kits and leather bags

Two Challenges faced by Molton Brown

Not well-known among most Singaporeans and they are only located at Takashimaya and Raffles Hotel.

High competition in the industry e.g. Body Shop, Crabtree & Evelyn

• Doing a market research finding out the consumers' behaviour in Singapore
• Creating brand awareness to the public through roadshows or advertising highlighting the Point-Of-Difference.
• Using celebrities to create buying intention among the consumers.

THIS BLOG WILL BE DEDICATED TO DISCUSS LEARNING POINTS on

Retail Store Operations & Management