MERCHANDISING

What does merchandising mean?

The term 'merchandising' is the result of combining the noun 'merchandise',

what does 'merchandise' mean and the root 'Ing.' which expresses theaction, that is, the
action by which theproductinpowerof theconsumer.

DEFINITION

It is the set of techniques aimed at putting theproductsat the disposal of

consumer, obtaining aprofitabilityto theinvestmentmade in the
establishment.
This means that, whenever there is retail sales, with the aim of obtaining certain
benefits, there is "merchandising."

OBJECTIVES OF MERCHANDISING
Your goal is to Attract, Interest the customer, awaken Desire, and Take action.
purchase. (A.I.D.A.) promotes impulsive buying, the seduction of the buyer with the
point of sale, but this is achieved by thoroughly understanding your product,
understanding your target market, meeting the needs and desires of your
clients and it will practically sell itself.

Merchandising is a complementary seller, as it is a companion of

work, that works 365 days a year and remains 24 hours at the point of
sales every day.

PRINCIPLES OF MERCHANDISING.
These principles are summarized in a very novel way by mentioning them in the
next way:

Profitability

Location

Impact

Availability

Price

Exhibition
BENEFITS OF MERCHANDISING:

There are many benefits that merchandising offers us from the point of
strategic view. Among them, the following stand out:

Change the concept of 'dispatching' products to 'selling'.

Reduction of purchase time.

Conversion of cold areas into places with life.

Enhancement of product rotation.

Replacement of the 'passive' presence with an 'active' presence.

Maximizing the point of sale, due to the following

aspects: the product meets the buyer, the buyer
find it pleasant at the point of sale, the atmosphere, the comfort of picking up
the products, the point of sale decoration, the 'service' in general
what it receives, the colors, the music, etc.

Enhance the "magnet products" at the point of sale (those that by their
peculiar characteristics have difficult rotation, but we are interested in its
sale).

ELEMENTS AND MOVING VARIABLES OF THE PRODUCT

Price
Advertising
Promotion
Image
Service

ELEMENTS
Attention
Presentation
Decoration
Placement
Prices
Guarantees

The fixed elements are very important, as our strategy and what
we want to communicate that it will be reflected in those elements.
Variables, although not easy, are quicker to modify. It will depend on
each point of sale has its own business philosophy, environment, and competition.

WHAT IS MERCHANDISING FOR?

In order to continue arguing and influencing the public consistently

even if the seller is not present or does not exist. The circles
current middle and upper middle social classes increasingly enjoy
independenceyfreedomat the time of purchase and especially at the moment of
purchase decision.

Tomorrow's businesses will tend to replace argumentation in sales.

verbal by the visual. A goodplanof "merchandising" allows the owner to
the product is presented and offered better toclientIt can be stated that the
"Merchandising" helps to sell more and better in a direct way.

WHERE IS MERCHANDISING APPLIED?

Merchandising is fundamentally applied to encourage impulse buying.

that is to say, it is aimed at seducing the buyer at the point of sale, which leads him
allow a broader understanding of your products and behavior of
the consumers. This would preserve and promote the good image of the company.

To achieve positive results from this, the following is needed:

A constant and creative action,

2.- A thorough analysis with knowledge of its profitability

3.- Factors that affect Merchandising such as: the rotation of products,
the attractive presentation, the type of consumer, and the exhibition furniture of the
products.

In general, Merchandising helps achieve the proper management of everything.

the image-carrying elements at the points of sale, where the variety is
the fundamental weapon of image and competitiveness, this allows us to optimize the
sales and improve the level of service to consumers, achieving thus the
idealization of customers and the increase in store profitability.

Remember that 80% of consumers' purchases are planned and the other
20% are due to impulse. (According to Alejos and Chico 1997).

MERCHANDISING ALWAYS APPLIES

Unfortunately not especially in businesses of a certain age, but it is

more regrettable than their owners, when informed about the topic, usually lack
ofinterestand they almost never apply it.

Whether a business has or lacksPersonalityit will largely depend on

whether an appropriate one is applied or notMarketing PlanVocabulary, presence of
sellerlightenvironmental, rest areasoundenvironmental and public address, and
decorative elements. These are some examples of elements where there are no
merchandising is applied.

TRADITIONAL CLASSIFICATION OF MERCHANDISING

Presentation merchandising:

It aims for the shelf to drive attraction towards the products more
profitable (addresses the senses). Means such as the jailhouse are used.
the location of the products. Also, an attempt is made to determine the arrangement
store internal layout to optimize customer circulation, so
how to establish the location and the allocated space for the
products on the shelf (selection, arrangement, and presentation of the assortment).

Seduction merchandising:

It is based on the Show store, specific furniture, schedules,

specialization, point of sale animation, live products (ecological,
light, etc.). It seeks to promote the image of the distributor itself, through a
good service and customer care, take care of the establishment's appearance and
try to create the best environment to influence the buying mood of the
consumer.
 Management or strategic merchandising:

It involves conducting a permanent analysis of the retail company's offerings.

with the idea of increasing the profitability and turnover of the products in the
point of sale through consumer satisfaction. They are used
instruments such as Market Studies, Occupancy Rate of
Soil (COS), Category Management, Assortment Management, Policies of
Price, positioning and placement of products on the shelf.
Collection of information generated at the point of sale. Use
technological devices such as: Scanner (barcode, management of
different establishments) and micro-informatics.

According to who carries out the merchandising actions:

1. Manufacturer's Merchandising: Actions at the point of sale, by the

manufacturer of a product, aimed both at the buyer and at the product itself
establishment or its personnel; to promote the product, or to
highlight it from the competition, with the aim of increasing its turnover.

2. Distributor Merchandising: Actions taken in the establishment

by the retailer, with the aim of increasing the sale of products, in order to
to optimize the profitability of the sales area.

According to the type of client it is aimed at:

1. Merchandising for the Opportunistic Customer: Also called Shopper, which

it is that person who, to define their intention to buy, observes the
alternatives offered by different market establishments:
Location, comfort, prestige and other factors that provide you with the
benefit that seeks, necessary to encourage him to consume. For them, it
You must apply a communication strategy aimed at attracting them, that is,
the techniques called Inbound Marketing.

2. Merchandising for the Buyer-Customer: Known as the customer

Buyer. These are the individuals who finalize the purchase transaction. The
that being at the point of sale they acquire the goods or services
depending on the factors and benefits that drive you to carry out the
purchase, such as: Price, quality, service, variety, etc. The strategy of
communication with this category of clients must be directed to
encourage, in addition to planned purchases, also impulsive purchases,
what is known as Outbound Marketing.

According to the product life:

 Products, in relation to time, go through four phases defined by their
sales rhythm, which are:
Introduction or Presentation
Growth or Acceptance
Maturity
Decay or Decline

Thus, marketing campaigns and especially actions

Merchandising must adapt to this rhythm, to these stages, giving rise to the
next classification:

1. Birth Merchandising: It relates to the agreements of

product coding or reference, with its implementation on the shelf
suitable. At the point of sale, actions are usually taken such as
tastings, demonstrations, distribution of brochures, informational stands,
launch offers, etc.

2. Attack Merchandising: It consists of obtaining a better placement in

the linear, as a consequence of the greater rotation and sales of the product,
with the aim not only of gaining more clients but also of retaining them
that are already available. Animation activities become important in the
point of sale and the promotional campaigns related to the item.

3. Maintenance Merchandising: These are the actions that are carried out
once the appropriate linear has been obtained according to the sales rhythm and rotation
of the product. Thus, in order to protect that location, they must
cultivate relationships with store managers and do not neglect
the animation and promotion activities.

4. Defense Merchandising: It is the intervention that is carried out with the aim
prolonging the product's decline phase, avoiding the loss of
positioning on the shelf and seeking to obtain the collaboration of the
distributor, who due to the drop in sales, loses interest in the
product defense.

Depending on the time:

Promotional Merchandising: Composed of a set of actions

carried out in a defined time, to boost the purchase

2. Permanent Merchandising: It is the continuous activity carried out on the shelf,

throughout the year.

3. Seasonal Merchandising: It is the one that is carried out by virtue of the relationship of
the products with the season of the year.
MERCHANDISING P.O.P.

It consists of the set of actions carried out on the external part of the
establishment such as the notices, in these notices comes the logo of the
product brand to attract the customer's attention and let them know that in that
That brand of product is sold there.

MERCHANDISING AT THE KIOSK

The advantages of the kiosk are:

exclusivity.

The sales volume it generates.

Advertising support for being a billboard.

TYPES OF PURCHASES
We classify types of purchases taking into account behavior of
consumer
Rational (or planned) purchases 42%:
Completed (20%): these are the ones carried out according to the initial forecast

product and brand.

oNecessary (17%): are those made by product without forecast of

brands; they adapt to the profile of consumers who seek offers.

o Modified (5%): they are those bought by product but modified.

the brand.

Irrational (or impulsive) purchases 58%:

oPlanned (12%): the consumer has the intention to purchase, but

wait for the right moment to carry it out (discounts, promotions,
etc.).

oRemembered (9%): the customer did not plan their purchase, but upon seeing the
product, remember that you need it.
 oSuggested (23%): they are produced when a customer, visualizing
a product on a shelf decides to try it.

o Puras (14%): it is the purchase that breaks the habits, that is,
completely unforeseen.

The planned purchases only represent 42% of the total made, which
consolidates the idea that the point of sale plays a crucial role when it comes to
increase sales volume, it will depend on the percentage of purchases
impulsive.

To facilitate the rotation of products in establishments, there exists a series

of sites, among which stand out:

Linear. Products are perfectly identified through the

surface of the shelf, so all companies compete to achieve
larger meters for its placement. The products are located at three levels:

o Eye level, products with the highest likelihood of turnover.

oHand level, everyday consumer products.

oGround level, heavy and regular use products.

Gondola headers. They are located at the ends of the shelves, and
due to its excellent location, it is the most in-demand space at the national level
promotional.

HOW MERCHANDISING INFLUENCES SALES

It is about selling more with lessexpensesAll the technique of 'merchandising' is

based on thePsychologyand makes the visitor become a customer.

All the elements of a business have their own individual message;

RedStrength, Passion,HeatHorizontal lines: Peace, Relaxation
Softness
Trust, Freedom, Correct Vocabulary: Attention,Education, Praise, Courtesy.

If these elements are combined properly, the message will be clear and
perceptible, if on the contrary, each element transmits different sensations, the
message will be incomprehensible. Thesocietiescurrent, like more and more every day
take care of yourimageand feeling flattered, regardless of the levels

economic. If one is able to show aatmcorrect atmosphere, that flatters the

the client's ego, the loyalty to the establishment will have been achieved, a phenomenon that,
As almost everyone knows, it is free of charge.

FACTORS AFFECTING SALES

Situation of the sections

The person in charge of the point of sale must establish the location of the different
sections, at first. But it should also take care of whether the
actions follow a logical and rational order that facilitates orientation and purchasing
of the customers of the establishment. These decisions are complicated by the
presence of various considerations:

Attraction products. They are the best sellers; they should be placed at a distance to
that the customer covers as much surface area of the establishment as possible.

Rational or irrational purchase products. Impulsive purchase ones are

better to place them in boxes, while those for more thoughtful buying
(appliances, for example) need a spacious and stress-free area.

Complementarity. Products and sections must be placed in such a way that

they complement each other (for example, battery-operated devices near the batteries).

Manipulation of the products. Special products such as the

heavy or bulky items require a placement that favors the
comfort of the establishment and the consumer.

Conservation of products. Certain sections of fresh products.

they must be located near the cutting and cleaning room
products.

The circulation

The itinerary. It depends on four factors:

oBoxes and front door.

oFurniture arrangement.

oPlacement of the products.

oInformation that guides the consumer.

 Circulation speed:

Hallways. They must facilitate smooth circulation and allow access to all the
sections.

Bottlenecks. They should be avoided as much as possible because they favor

the overcrowding that reflects poor management and presents a bad image to
client.

Information. If it is correct, it promotes the speed of circulation.

Duration of stay.

Time depends on the distance traveled and the speed of circulation;

generally the older you are, the more purchases you make. However,
it is not advisable for it to be excessive because queues and discomfort will form,
etc., that generate bad mood and dissatisfaction. The ideal duration will vary in
each establishment, the type of music, the temperature and other factors
they vary the speed.

Cold and hot sales areas and points

One of the main functions that the department has to perform

Marketing is about locating strategic places on the street to establish a new point.
for sale or detect the ideal locations within the surfaces
commercial. Those points of sale where the flow is referred to as 'hot'
of the people is higher than the average for the area; on the contrary, the 'cold' are
those points with lower customer traffic than the area average.

The policy that should be followed is to maintain the hotspots and transform
the cold. For this, there are animation techniques that consist of:

Put basic products in cold areas: sugar.

Illuminate that area more intensely.

Set up a stand with tastings.

Cover that area of mirrors.

Post a promotion regularly.

Etcetera.
 Elements outside the establishment

Labels. They allow identifying establishments through a name,

logo or symbol according to the image that is desired to be projected.

Entrance to the establishment. It constitutes an element that separates the customer.

from inside the store. In this sense, it is essential that it enhances the
ease of access and invitation to enter.

Display windows. It will be basic in all types of businesses. There are trends that
they change over time but it is advisable not to exceed 15 days without
vary a showcase and adapt it to different events over time.

THE VALUE OF LEVELS

There are three types of levels in the gondolas which are:

Upper Level (eyes): it is also referred to as the level of perception as its

The objective is to attract and retain the consumer's attention.

Medium level (hands): it is a more comfortable reach for the customer.

Lower level: It has little or no perception for the client as it involves a

wear and tear when bending down to pick up the product.

Within this, we will mention the horizontal and vertical presence of the products
within the gondola, which has more advantages is the vertical sale in the gondolas
because the human being tends to follow the movement of the head on the horizon and
it also makes it easier to find the product.

EXTERNAL MERCHANDISING

Accessibility and Entry, this aspect is important because it will allow more
customers enter our store, access must be facilitated and clearly defined
local, and above all create a psychological feeling so that they can enter the
clients. For example, a black door gives a sense of resistance to
entrance, on the contrary, a glass door or another color invites to access the
establishment. The facade could be used to differentiate itself from the
Competition. Outdoor advertising should guide traffic towards the
establishment and invite to enter.

INTERNAL MERCHANDISING

Identify the areas where there is more consumer traffic, in order to

manage the placement of products well, in low traffic areas they can be
to place reflection products, so that consumers spend more time in
that side and create a shopping environment. And in high traffic areas,
Then placing impulse buying products would be a good option. The time
the consumer in the establishment is important, if the time is short the
The purchase is small; if the time is too long, it generates a crowd, that's what it is for.
It is necessary to facilitate circulation, reduce obstructions, and avoid setbacks.
The placement of the product on the shelves is important, the products located
at eye and chest level, these are the best sellers, they can be placed here
high-margin products, low turnover, products that need to be incentivized
its sale; those located in lower parts have lower sales levels, this
this area is ideal for promotions or offers or high-demand products.

IN WHICH COMPANY IS MERCHANDISING APPLIED

We can deduce that merchandising is applied by all those companies that

they have the financial means to invest in product exhibitions that
offered in the market.
Merchandising is applied by all leading companies in the market (family,
Nestlé, Colgate, etc.) that pay additional exhibitionism as points of
gondola, mammoth, and islands.
Gondola ends are found at the corners of supermarkets.
Many times to introduce a new product into the market or
simply when a product has good turnover or it is a special date.
Mammoths serve a very important function because they are exhibits
additional items that are outside of the shelves.
The shelves are where the products are found and this is located
divided.
Between layers: the two upper and the two lower are cold points since the
The customer often cannot reach where the product is.
The hot spots are those that are visible to the customers.
easily reached

ABOUT THE PURPOSE OF MERCHANDISING

It is important to know what is intended to be achieved with merchandising; for this, it must be
describe which marketing tools will help you with that
purpose.
What is being done in merchandising for the product attributes, a
new or lower price, a promotion, an advertisement message, a
personal sales presentation? The focus of communication should be defined.
before writing the segment in the marketing plan.
 HOW TO DEVELOP A MERCHANDISING PLAN

To establish a merchandising plan, two steps are required:

1. Set objectives: it must include

The number of merchandising materials produced or displayed at the location or

specific places in the market.
Geographic regions.
The weather.
Purpose of merchandising (communication approach).

2. Establish strategies: in the following areas

The method of production and exhibition that must be applied.

How to achieve the placement of merchandising elements.
Description of the creative parameters for the development of the materials
of merchandising

CONTROL INDICES IN MERCHANDISING CALCULATION:

Circulation index: measures the number of people who pass through a corridor or linear space and
express as %.
ICR=Customers who walk through the aisle or linear/customers who enter the
Attraction indices store: Measures the number of people who stop in a shelf or aisle.
determined about those who pass through it is expressed in %.

IA= Customers who stop in the aisle or corridor/ customers who stop in the aisle.

Purchase index: measures the customers who ultimately buy compared to those who only

it is expressed in % and calculated.

ICP = Customers who buy/customers who stop by the display.

Obtaining the necessary information to perform these calculations can be very

expensive as you need to have the proper technology. The novelty in the
information gathering is the shopping carts that register each
customer movement and this information is very relevant when it comes to
study the routes and preferences of consumers in the
establishments.

CALCULATION TABLE:

These control indices (circulation, attraction, and purchase) are used to achieve among
other these objectives:

1st to know, for example, which aisle is the most visited and which is the least,
those data try to improve the indices.

2nd knowing our customers' preferences, if they hesitate a lot before buying

3rd to know if our client is guided more by impulse than by what was planned.
4th to see if we are well structured
5th ultimately to improve.
CLIENT CLIENT
CLIENT WHAT WHAT
BY THE WAY PARAN PURCHASE CIRCULATION ATTRACTION PURCHASE
LINEAR
1 15
30 14 10.35% 50% 93.22%
LINEAR
2 50 45 43 17% 90% 95.56%
LINEAR
3 90 50 20 31% 55.56% 40%
LINEAR
4 120 110 40 41.65% 91.64 36.36%