The Buying Plan

One of the most important aspects of market penetration is to have the items in stock when the customers want to buy them. This implies going into the market to buy the goods early enough to ensure delivery to the store at the proper time. For example, to ensure on-time delivery of children's Easter clothes, you must place the orders and commit the resources in the previous September. So buying for a retail store requires advance planning to determine the merchandise needs for each month and then placing the commitments without procrastination. Since retailers offer for sale the new items months before the actual calendar date for the beginning of the new season, it is imperative that buying plans be formulated early enough to allow for intelligent buying without any last minute panic purchases. The main reason for this early offering for sale of new items is that the retailer regards the calendar date for the beginning of the new season as the merchandise date for the end of the old season. For example, March 21st, from a merchandising viewpoint, is the end of spring while June 21st is the end of summer and December 21st the end of winter.

The period following the calendar date for the beginning of the season is used by the retailer to sell closeouts, job lots, imperfects, irregulars, seconds, distress merchandise, off-price purchases and markdowns from regular stock.

In summary the Buying Plan should detail:

When the market should be visited to see, examine, and study the new offerings for the coming season;

When commitments should be placed; and

When the first delivery should be received at the store.

The Selling Plan

The Selling Plan is closely allied to the buying plan. Once the merchandise has been purchased, plans must be formulated to ensure the sale of the greatest number of units during the period of customer acceptance. The Selling Plan should detail:

a) When the items should be promoted through advertising, window and interior displays, etc.;

b) When the inventory should be peaked;

c) When reorders should no longer be placed;

d) When markdowns from regular stock should be taken; and

e) When the item should no longer be in stock.

The buyer for the retail store must determine at the time the merchandise is purchased when the item should be introduced, when it should be reordered, when it should be marked down, and when it should be removed from stock. This procedure can be compared to the tides - low and high. In merchandising terms it is referred to as the ebb and flow of merchandise. The old must go and the new must take its place.

The Unit Control Plan

To maintain an in-stock position of wanted items and to dispose of unwanted items, it is necessary to establish an adequate form of control over the merchandise on order and the merchandise in stock. For the small retailer there are many simple, inexpensive forms of unit control. They are:

Visual or eyeball control enabling the retailer to examine the inventory visually to determine if additional inventory is required;

Tickler control enables the retailer to physically count a small portion of the inventory each day so that each segment of the inventory is counted every so many days on a regular basis;

Stub control enables the retailer to retain a portion of the price ticket when the item is sold. The retailer can then use the stub to record the items that were sold; and finally, a

Click sheet control enables the retailer to record the item sold (at the cash register) on a sheet of paper, such information is then used for reorder purposes.

For the large retailer more technical and sophisticated forms of unit control are used. They include:

Point-of-sale terminals which relay to the computer the information of the item sold. The buyer receives information printouts at regular intervals for review and action;

Off-line point-of-sale terminals relay information directly to the supplier's computer which uses the information to to ship additional merchandise automatically to the retailer; and

A manufacturer's representative visits the large retailer on a scheduled basis and takes the stock count and writes the reorder. Unwanted merchandise is removed from stock and returned to the manufacturer through the procedure of an authorized level.

A sound unit control must include control over open orders so that delivery dates are adhered to and to ensure that stores do no receive goods they did not order.

Selection Of Merchandise

This section concerns itself with merchandise retail management which involves:

what merchandise to carry in stock

how much to buy and stock of each item

how much selling space to give each item

what price to charge for each item

how to display, advertise and promote each item

Merchandise retail management is sometimes mistaken with merchandising. Merchandising refers to good in-store display and promotion of merchandise. Merchandise management, as described above, is much more, as will be seen in the discussion to follow.

Selection Of Merchandise

What merchandise should be carried in stock is basic to good merchandise management. For this reason, much thought and research must be given to selecting merchandise appropriate for your store. In initiating a new store, as well as during periodic merchandise reviews in an established store, you need to think about your market. What are the people like, who shop in your area? Are they young married with children, or elderly couples, blue or white collar, high or low income? What are their leisure activities, and wants and needs, etc.? Each of these factors has impact upon the type of merchandise you would select.

Other ways for obtaining ideas for merchandise selection include:

Studying other stores in the area, watching closely the merchandise they do and do not offer. Determining whether merchandise not offered may have potential.

Obtaining suggestions from salespeople in similar stores.

Carefully listening and speaking to customers in general about what they like about other stores.

Reading the trade literature.

Following advertisements of chains and department stores.

In general, knowing your customers and their needs is crucial in merchandise selection.

Everyone needs To be familiar with the Decision Making Process. All of us rely on information, and tools or techniques, to assist
us in our daily lives.

When we head out To consume, the restaurant menu is the instrument which supplies us with the information needed to choose what to
purchase and how much to invest.

Operating a Business also needs making decisions using information and techniques - how much inventory to maintain, what price to
sell it in, what credit agreements to offer, how many people to employ.

Decision Making Procedure in company is the systematic process of identifying and solving issues, of asking questions and finding
answers. Decisions usually are made under conditions of uncertainty. The future is not understood and sometimes even the past is
suspect. This guide opens the door for company owners and managers to learn about the selection of techniques that can be used to
improve your decision making process in a world of doubt, change, and uncontrollable circumstances.

A General Approach to Decision Making Process. If or not a scientist, an executive of a significant corporation, or a small
business owner you are able to benefit from boosting your decision making abilities. The overall solution to systematically
solving issues is exactly the same. The next 7 step approach to enhance management decision making can be used to examine
virtually all issues faced by a business.

State the problem. A problem first must exist and be realized. What's the issue and why is it a problem. What is ideal and how do
present operations vary from this ideal. Describe why the symptoms (what is going wrong) and the causes (why is it likely wrong).
Try to define all terms, theories, factors, and relationships. Quantify the issue to the extent possible. If the problem, not
correctly and quickly fulfilling customer orders, attempt to ascertain just how many orders were incorrectly filled and how long
it took to fulfill them.

Define the Objectives. What are the goals of the analysis. Which goals are the most critical. Objectives usually are said by means
of an action verb like to decrease, to grow, or to improve. Returning to the customer dictate problem, the major goals would be:
1) to raise the percentage of orders filled properly, and 2) to decrease the time it takes to order and process. A sub-objective
could comprise to simplify and streamline the order filling process.

Grow a Diagnostic Framework. Next set a diagnostic framework, which is, decide what methods are going to be utilized, what types
of information are needed, and how and where the info is available. Is there likely to be a consumer survey, a review of company
records, time and motion tests, or something else. What are the assumptions (facts assumed to be right ) of the study. Which would
be the criteria used to evaluate the study. What time, funding, or other limitations are there. What type of qualitative or other
special processes will be used to analyze the data. (Some of that will be covered shortly). To put it differently, the diagnostic
frame establishes the extent and processes of the whole study.

Collect and Analyze the Data. The next step is to gather the data (by following the methods established in Step 3. Raw data is
then tabulated and organized to ease analysis. Tables, graphs, charts, indicators and matrices are a number of the conventional
ways to arrange raw data. Analysis is your important prerequisite of sound business decision making. What does the data show. What
facts, patterns, and trends can be seen from the information. Many of the qualitative methods covered below can be used during the
step to ascertain details, patterns, and trends in data. Of course, computers have been used extensively during this step.

Generate Alternative Solutions. After the analysis was finished, some specific decisions about the character of the issue and its
resolution must have been achieved. The next step is to develop alternative solutions to the problem and position them in order of
their net benefits. But how are choices best generated. Again, there are several well established techniques like the Nominal
Group Method, the Delphi Method and Brainstorming, among others. In all these methods a group is included, all people who have
examined the data and analysis. The approach will be to get an informed group indicating many different feasible solutions.

Develop an Action Plan and Implement. Select the best solution to this problem but be certain to understand clearly why it is
best, that is, how it achieves the goals established in Step 2 greater than its alternatives. Then develop a productive method
(Action Plan) to execute the solution. At this point a significant organizational consideration arises - who is going to be
responsible for seeing the implementation through and what authority does he have. The chosen manager ought to be responsible for
seeing that all tasks, deadlines, and reports are performed, fulfilled, and composed. Details are all important in this measure:
schedules, reports, tasks, and communication will be the key elements of any activity plan. There are several techniques available
to decision makers implementing an action plan. The PERT method is a method of laying out an entire period like an action plan.
PERT is going to be covered shortly.

Evaluate, Obtain Feedback and Monitor. After the Action Plan was implemented to Fix a issue, management must evaluate its
effectiveness. Evaluation Criteria have to be ascertained, feedback stations developed, and monitoring performed. This Measure
ought to be done after 3 to 5 weeks and at 6 weeks. The goal is to answer the bottom line question. Has the problem been solved?

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