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Ch. 4: Merchandise Assortments • The different types of brand identification, their potential benefits & challenges • The importance of private-label 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 reserved Private-Label 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: second-rate, “off-brand” 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 reserved 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 reserved 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 high-end 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 reserved 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 reserved