ITM332
IT Applications for Merchandising
Assignment - I
Assignment Code: 2015ITM332A1 Last Date of Submission: 15th April 2015
Maximum Marks:100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
Ques. 1 Explain the importance of sourcing in merchandise process.
Ques. 2 What is the difference between the four methods of dollar merchandise planning used
to determine the proper inventory stock levels needed to begin a merchandise selling
period?
Ques. 3 What do you understand by sales per square foot? Why do we use it in calculating
performance measure in merchandise category? Comment with relevant examples
Ques. 4 a. What is ECR ? Explain the scope of ECR.
b. Explain the information flow in ECR system.
Section-B
Marks & Spencer And Dewhirst
The partnership between Marks & Spencer and Dewhirst is perhaps one of the longest standing business partnerships of all time. It began in 1894 when Michael Marks, a stallholder in Leeds Market Hall, formed a partnership with Tom Spencer, who had previously worked as a cashier for a wholesale company I.J. Dewhirst. The two companies have continued to trade, and Dewhirst is now a world-class manufacturing company in its own right, as well as being the second largest non-food Marks & Spencer supplier.
Dewhirst has its roots in supplying textile products to M&S, but product expansion into areas such as toiletries has given Dewhirst the opportunity to diversify. In 1998, Marks & Spencer launched a salon-formulation hair-care range in response to the growing interest in healthy hair and consumers’ willingness to purchase upmarket hair products. The following account follows the introduction of the new product range, highlighting the relationship between supplier and retailer as they work together to bring a product idea to market.
Richard Fawdry, merchandiser for toiletries at Marks & Spencer, talks to his contact, Sales Director Lorraine Crosby at Dewhirst, everyday. Dewhirst is one of six suppliers to the toiletries department and has a toiletries product development team who work exclusively on Marks & Spencer products. In the spring of 1997, Lorraine suggested to Richard that marks & Spencer could develop a premium priced ‘salon formulation’ hair care range. Richard was interested and asked Dewhirst to make some proposals.
The initial stage of the product development was the generation of themed story boards, pulling together ideas on product ingredients and packaging designs including bottle shapes, caps, and openings, labels, colours and product textures. These were used in product brainstorming sessions involving designers, selectors and merchandisers from M&S and product designers and marketers from the Dewhirst organization.
The next stage involved intensive discussion on the size of the range and target price points. A few bottles of shampoo would not make an adequate presence, but space constraints within the store meant that a new product launch would result in less space for other products prototype began. For this, a product development representative from Dewhirst visited laboratories in California, where the best hair-care formulations are made, using all the latest ingredients and technology.
Marks & Spencer did not get heavily involved in the formulations of the hair products, trusting Dewhirst as the product experts to come up with a product suitable for the Marks & Spencer customer. Lorraine, meanwhile, kept Richard informed on all aspects of the product’s progress. When the formulation had been agreed between the toiletries technologist at M&S and Dewhirst technicians, it was blind tested with consumers. In the meantime, product features such as packaging and product information were considered in detail, with the aim of producing a product with worldwide appeal at price levels considered to be value for money, especially to the largest customer group, the UK. Exchange of design information were facilitated by an EDI/CAM link up between the two companies. Every detail of the product was discussed in depth, with the final selling price as a key influence in the negotiations.
Finally the Richard worked on a detailed sales estimate for the range. He considered how wide the gap in the market is for this range, how strong is the competition from other hair care brands and retailers, and how much market share Marks & Spencer could expect to take. Lorraine provided some information to Richard on the market structure and competing retailers to help with this task. Richard also needed to decide if all the M&S stores would take the hair-care range and, if they do, whether they would take all the different product variations. The final sales estimate was given to Dewhirst, so that they could start planning production in the factories to meet the delivery schedule.
Point of sale material to support the launch was generated by Marks & Spencer’s graphics department, using product prototypes supplied by Dewhirst in the photography. The finalized range planning was presented at a merchandise review and was endorsed by the Marks & Spencer board of directors. Once the product launch was successfully underway, Lorraine and Richard went for an after-work celebratory dink!
5. Questions:
a) Why is the type and assortment of merchandise give so much of importance in retailing?
b) Why is the target price points, packing and product information key deciding factor for product selection in retail outlet like Marks & Spencer?
ITM332
IT Applications for Merchandising
Assignment - II
Assignment Code: 2015ITM332A2 Last Date of Submission: 15th May 2015
Maximum Marks:100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
Ques. 1 Explain in details the Cost and Retail Methods of accounting for Inventory Valuation?
Use suitable examples and Data Tables to explain your understanding?
Ques. 2 Write short notes on any TWO from following giving suitable examples?
a).Merchandise Security & types of Inventory Shrinkage in Retailing
b).Re Order point in Inventory levels and the importance of EOQ
c).Compare Basic Stock Method to Percentage variation method in Inventory Planning
d).Planned Reductions and Planned Purchases in Inventory Planning by Retailer
Ques. 3 What are the key factors affecting vendor negotiation?
Ques. 4 What is Electronic point of scale (EPOS) system. How it is used in improving stock
control system?
Section-B
Read the case and answer the following questions:
Private Label
Private labels are products that are manufactured by the retailer itself, rather than a manufacturer who generally markets them through separate retailers. As is evident, private labels are mostly prevalent in organised retail. Europe is the largest market for private label products globally. Within Europe, the United Kingdom is the largest private label market by size, followed by Germany. Private label penetration in the United Kingdom is close to 37 per cent currently, and is forecast to exceed 40 per cent by 2011. Should manufacturers really lose sleep over what the retailer is doing? Well, private labels are large in developing markets — they account for 40 per cent of Wal-Mart sales ($126 billion or Rs 5,16,600 crore), 50 per cent for Tesco ($36 billion or Rs 1,47,600) and are eating into a larger chunk of the organised retail sale in developed markets. In Germany, for instance, private label has shot up from 12 per cent of sales to 34 per cent. This has, in effect, changed the balance of power between brand manufacturers and retailers, giving the latter a decided advantage when negotiating terms with the brand manufacturers. And apart from the multibrand retailers, a category of private label-only retailers has also been created — Ikea, Toys ‘R’ Us, Zara — who sell only private label brands.
The writing is on the wall: private labels are growing faster than manufacturer brands. They are ubiquitous across categories and they now compete on quality — in fact, they are now brands! Private label share is expected to grab almost 22 per cent of sales in developed markets by 2010.
Private labels have evolved from ‘cheap and nasty substitutes’ to the real thing. Indeed, ‘copycat’ private labels still remain a strong strategy for retailers. However, the copycat no longer depends on the price advantage to fight the branded product; it has improved on quality and offers a value proposition to the consumer. Similarly, the earlier theory that that recessions fuelled private labels while an economic boom resulted in growth of brands no longer holds good.
Among the leading retailers of private labels is Tesco, which has a large portfolio spanning the entire price range. So from a ‘pile it high, sell it cheap’ approach, Tesco has moved into a more consumer-focused chain where private label offerings are the core of the strategy.
Wal-Mart, on the other hand, casts the net wider on private labels to create a ‘house of brands’. The only caution for retailers is that there should be a judicious mix of private labels and brands.
With India on the cusp of a retail revolution, some of the case studies should provide food for thought. In an ACNielsen consumer survey in 2008, only 56 per cent Indians agreed that private labels are a good option in comparison with brands – as against four in five consumers in developed countries. Further, the same survey also concluded that a majority of Indian consumers associate private labels with low cost, and are, therefore, apprehensive about compromising on quality. The target segment for organised retail in India is still predominantly urban, and in the context of private labels, it is more inclined towards ‘upwardly mobile' urban consumers. This segment gives high priority to quality, and the ‘budget label' perception does not help at all.
Further, Indian retailers have not been able to develop a bond with consumers. Consumer loyalty has been seen to provide impetus to private label growth in developed countries such as the United Kingdom. The lack of this bonding and loyalty could hamper private label penetration in coming years.
With the entrance of several corporate majors such as Reliance, Birla, Pantaloon there is intense store-level competition in the current Indian retail scenario. However, if Indian retailers were to follow the UK model, this could actually turn out to be a boon for private label growth. Major UK retailers such as Sainsbury and Tesco have successfully used private labels to differentiate themselves. This scenario could be replicated in India in the near future. At the same time, though, the Indian consumer's psyche also provides an opportunity for retailers. The Indian urban consumer is price-conscious, but also expects high quality.
Questions:
1. What are private labels? What is the share of private labels for a) Shopper Stop b) Westside c) Pantaloon?
2. Suggest the strategies by which the potential of Private label can be tapped in Indian Market.
3. What are the categories in which Private labels likely to exhibit maximum penetration? Justify. Why ?
IT Applications for Merchandising
Assignment - I
Assignment Code: 2015ITM332A1 Last Date of Submission: 15th April 2015
Maximum Marks:100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
Ques. 1 Explain the importance of sourcing in merchandise process.
Ques. 2 What is the difference between the four methods of dollar merchandise planning used
to determine the proper inventory stock levels needed to begin a merchandise selling
period?
Ques. 3 What do you understand by sales per square foot? Why do we use it in calculating
performance measure in merchandise category? Comment with relevant examples
Ques. 4 a. What is ECR ? Explain the scope of ECR.
b. Explain the information flow in ECR system.
Section-B
Marks & Spencer And Dewhirst
The partnership between Marks & Spencer and Dewhirst is perhaps one of the longest standing business partnerships of all time. It began in 1894 when Michael Marks, a stallholder in Leeds Market Hall, formed a partnership with Tom Spencer, who had previously worked as a cashier for a wholesale company I.J. Dewhirst. The two companies have continued to trade, and Dewhirst is now a world-class manufacturing company in its own right, as well as being the second largest non-food Marks & Spencer supplier.
Dewhirst has its roots in supplying textile products to M&S, but product expansion into areas such as toiletries has given Dewhirst the opportunity to diversify. In 1998, Marks & Spencer launched a salon-formulation hair-care range in response to the growing interest in healthy hair and consumers’ willingness to purchase upmarket hair products. The following account follows the introduction of the new product range, highlighting the relationship between supplier and retailer as they work together to bring a product idea to market.
Richard Fawdry, merchandiser for toiletries at Marks & Spencer, talks to his contact, Sales Director Lorraine Crosby at Dewhirst, everyday. Dewhirst is one of six suppliers to the toiletries department and has a toiletries product development team who work exclusively on Marks & Spencer products. In the spring of 1997, Lorraine suggested to Richard that marks & Spencer could develop a premium priced ‘salon formulation’ hair care range. Richard was interested and asked Dewhirst to make some proposals.
The initial stage of the product development was the generation of themed story boards, pulling together ideas on product ingredients and packaging designs including bottle shapes, caps, and openings, labels, colours and product textures. These were used in product brainstorming sessions involving designers, selectors and merchandisers from M&S and product designers and marketers from the Dewhirst organization.
The next stage involved intensive discussion on the size of the range and target price points. A few bottles of shampoo would not make an adequate presence, but space constraints within the store meant that a new product launch would result in less space for other products prototype began. For this, a product development representative from Dewhirst visited laboratories in California, where the best hair-care formulations are made, using all the latest ingredients and technology.
Marks & Spencer did not get heavily involved in the formulations of the hair products, trusting Dewhirst as the product experts to come up with a product suitable for the Marks & Spencer customer. Lorraine, meanwhile, kept Richard informed on all aspects of the product’s progress. When the formulation had been agreed between the toiletries technologist at M&S and Dewhirst technicians, it was blind tested with consumers. In the meantime, product features such as packaging and product information were considered in detail, with the aim of producing a product with worldwide appeal at price levels considered to be value for money, especially to the largest customer group, the UK. Exchange of design information were facilitated by an EDI/CAM link up between the two companies. Every detail of the product was discussed in depth, with the final selling price as a key influence in the negotiations.
Finally the Richard worked on a detailed sales estimate for the range. He considered how wide the gap in the market is for this range, how strong is the competition from other hair care brands and retailers, and how much market share Marks & Spencer could expect to take. Lorraine provided some information to Richard on the market structure and competing retailers to help with this task. Richard also needed to decide if all the M&S stores would take the hair-care range and, if they do, whether they would take all the different product variations. The final sales estimate was given to Dewhirst, so that they could start planning production in the factories to meet the delivery schedule.
Point of sale material to support the launch was generated by Marks & Spencer’s graphics department, using product prototypes supplied by Dewhirst in the photography. The finalized range planning was presented at a merchandise review and was endorsed by the Marks & Spencer board of directors. Once the product launch was successfully underway, Lorraine and Richard went for an after-work celebratory dink!
5. Questions:
a) Why is the type and assortment of merchandise give so much of importance in retailing?
b) Why is the target price points, packing and product information key deciding factor for product selection in retail outlet like Marks & Spencer?
ITM332
IT Applications for Merchandising
Assignment - II
Assignment Code: 2015ITM332A2 Last Date of Submission: 15th May 2015
Maximum Marks:100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
Ques. 1 Explain in details the Cost and Retail Methods of accounting for Inventory Valuation?
Use suitable examples and Data Tables to explain your understanding?
Ques. 2 Write short notes on any TWO from following giving suitable examples?
a).Merchandise Security & types of Inventory Shrinkage in Retailing
b).Re Order point in Inventory levels and the importance of EOQ
c).Compare Basic Stock Method to Percentage variation method in Inventory Planning
d).Planned Reductions and Planned Purchases in Inventory Planning by Retailer
Ques. 3 What are the key factors affecting vendor negotiation?
Ques. 4 What is Electronic point of scale (EPOS) system. How it is used in improving stock
control system?
Section-B
Read the case and answer the following questions:
Private Label
Private labels are products that are manufactured by the retailer itself, rather than a manufacturer who generally markets them through separate retailers. As is evident, private labels are mostly prevalent in organised retail. Europe is the largest market for private label products globally. Within Europe, the United Kingdom is the largest private label market by size, followed by Germany. Private label penetration in the United Kingdom is close to 37 per cent currently, and is forecast to exceed 40 per cent by 2011. Should manufacturers really lose sleep over what the retailer is doing? Well, private labels are large in developing markets — they account for 40 per cent of Wal-Mart sales ($126 billion or Rs 5,16,600 crore), 50 per cent for Tesco ($36 billion or Rs 1,47,600) and are eating into a larger chunk of the organised retail sale in developed markets. In Germany, for instance, private label has shot up from 12 per cent of sales to 34 per cent. This has, in effect, changed the balance of power between brand manufacturers and retailers, giving the latter a decided advantage when negotiating terms with the brand manufacturers. And apart from the multibrand retailers, a category of private label-only retailers has also been created — Ikea, Toys ‘R’ Us, Zara — who sell only private label brands.
The writing is on the wall: private labels are growing faster than manufacturer brands. They are ubiquitous across categories and they now compete on quality — in fact, they are now brands! Private label share is expected to grab almost 22 per cent of sales in developed markets by 2010.
Private labels have evolved from ‘cheap and nasty substitutes’ to the real thing. Indeed, ‘copycat’ private labels still remain a strong strategy for retailers. However, the copycat no longer depends on the price advantage to fight the branded product; it has improved on quality and offers a value proposition to the consumer. Similarly, the earlier theory that that recessions fuelled private labels while an economic boom resulted in growth of brands no longer holds good.
Among the leading retailers of private labels is Tesco, which has a large portfolio spanning the entire price range. So from a ‘pile it high, sell it cheap’ approach, Tesco has moved into a more consumer-focused chain where private label offerings are the core of the strategy.
Wal-Mart, on the other hand, casts the net wider on private labels to create a ‘house of brands’. The only caution for retailers is that there should be a judicious mix of private labels and brands.
With India on the cusp of a retail revolution, some of the case studies should provide food for thought. In an ACNielsen consumer survey in 2008, only 56 per cent Indians agreed that private labels are a good option in comparison with brands – as against four in five consumers in developed countries. Further, the same survey also concluded that a majority of Indian consumers associate private labels with low cost, and are, therefore, apprehensive about compromising on quality. The target segment for organised retail in India is still predominantly urban, and in the context of private labels, it is more inclined towards ‘upwardly mobile' urban consumers. This segment gives high priority to quality, and the ‘budget label' perception does not help at all.
Further, Indian retailers have not been able to develop a bond with consumers. Consumer loyalty has been seen to provide impetus to private label growth in developed countries such as the United Kingdom. The lack of this bonding and loyalty could hamper private label penetration in coming years.
With the entrance of several corporate majors such as Reliance, Birla, Pantaloon there is intense store-level competition in the current Indian retail scenario. However, if Indian retailers were to follow the UK model, this could actually turn out to be a boon for private label growth. Major UK retailers such as Sainsbury and Tesco have successfully used private labels to differentiate themselves. This scenario could be replicated in India in the near future. At the same time, though, the Indian consumer's psyche also provides an opportunity for retailers. The Indian urban consumer is price-conscious, but also expects high quality.
Questions:
1. What are private labels? What is the share of private labels for a) Shopper Stop b) Westside c) Pantaloon?
2. Suggest the strategies by which the potential of Private label can be tapped in Indian Market.
3. What are the categories in which Private labels likely to exhibit maximum penetration? Justify. Why ?
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