1. Terminology

8/3/2019 1. Terminology

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Advertising

is persuasive and/or informative non-personalcommunications paid for by a clearlyidentifiable sponsor

Agile manufacturing is a new technology that incorporates modular production rather than the traditional piece

goods line method and allows for special ordersat the last minute without disruption.

Assortment

is the selection of merchandise offered in astore at any given time

Description of assortments is often presentedin terms of breadth (i.e. number of styles) and

depth (i.e. number of sizes and colors availablefor each style).

Brand is a known name associated with aspecific product or group of products carrying

with it an expectation of such perceived valuesas style and image, quality, price, fit, reliability,consistency, and confidence that you'll look

Breadth is a term used to refer to the number of different product lines, styles, or brands that

are carried in a retailing establishment.

Bridgeis a merchandise level price pointbetween designer or couture and better goods

Concessions also known as shops-within-shops, can be defi ned as space leased by thehost retailer to another retailer, wholesaler or

manufacturer from which to sell its merchandise

Category is a major grouping of merchandisethat includes al types of departments,

classifications, and sub-classifications that aparticular type of customer would shop, for example, women's or men's apparel.

Corporation is a firm owned by one or morepersons, each of whom has a financial interest.corporation allows capital to be raised throughthe sale of company stock and does not allowlegal claims against individuals, as in the casewith sole proprietorships and partnerships

Counterfeit is a type of merchandise thatviolates a company‟s intellectual property

rights. The law states that a protectedtrademark or copyright cannot be copied andoffered for sale by another company

Credit is an alternate to paying cash

› It allows the customer to buy merchandise now,and pay for it later

› Even though the stores do not benefitfinancially from the interest charged on theseaccounts (they do with charge cards),acceptance of those cards is a convenienceafford to their customers that can ultimatelyincrease patronage and sales

Cross merchandising – Selling complementary goods in order to

encourage customers to buy more

Ethical sourcing – A philosophy and act of

selecting and retaining only those suppliersthat follow good business ethics and adhere tofair treatment of workers.

Electric data interchange (EDI) is communication system that electronically

transfers information from one point toanother via computer

An important application is the transfer of purchase orders between manufacturersand retailers

This is one way that vendors and retailerscan respond instantaneously to quicklychanging consumer demands

Electronic mail (e-mail) is a technology that canhelp companies to effortlessly communicate

with headquarters or other companies todetermine exact availability of goods (i.e.,quantities, styles, and sizes for each ship date)and lock in and guarantee an order on the spotwhen working with customers

Electronic retailing offers products through suchelectronic media as computers and television

› Shopping on the Internet is the newesttechnological retail format of on-line retailing.

Floor – ready merchandise – ›

Goods are shipped to the retail store incondition ready to be displayed on the salesfloor, without further preparation by storeworkers

FOB (specified location) - Free on Board.› This price includes the price of the product

itself plus all shipping costs to the locationspecified, usually the port from which theproduct is shipped.

Generic product – ›

Product sold in simple (usually black and white)packaging, with no brand name or advertising.Generic products are designed to sell at a lower price by eliminating expense

House brand – › A brand name owned by a retail company, sold

only within its retail outlets; may also be calleda private label .

Intellectual property – › Ownership conferring the right to possess, use,

or dispose of products created by humaningenuity, including patents, trademarks, andcopyrights.

› These rights are protected when properlyregistered, but registration in one country doesnot create rights in another country

Joint venture – A company owned by two or more companies, often from different countries

Innovation is anything the consumer perceivesto be new, and could include an „old‟ product

introduced into a new market.

Just in time (JIT) – › A philosophy and method of manufacturing that

minimizes production costs by minimizing rawmaterials and components inventories throughrequiring that such materials be delivered whereneeded in the production process “just in time,”or just before needed in the productionprocess.

JIT also increases flexibility, allowing retailersto react more easily and quickly to changes infashion and consumer demand, because largeinventories are not built during themanufacturing process.

Interior product displays help customer locatemerchandise and can illustrate how the

merchandise is used or worn

› They include counter top or point-of-purchasedisplays, showcase displays, wall or ledgedisplays, aisle displays, open selling displays,and closed island displays.

International source/sourcing is the process of buying of goods offshore, from other countries.

Inventory planning entails the determination of the stock levels necessary to meet the sales

plan. Note: the terms inventory and stock areused interchangeably

Management is the process of getting activitiescompeted efficiently and effectively with and

through other people. A business usually hasat least three management aspects: 1) thebusiness 2) the employees and 3) theoperations

Merchandise planning is a broad term thatdescribes those retiling activities that arebased in planning.

› It directly involves the five "rights" of

merchandising that Mazur brought to our attention

These are: purchasing the rightmerchandise, at the right time, at the rightplace, in the right quantity, and at the rightprice.

divides retail activities into four divisional areas

Mazur plan divides retail activities into four divisional areas.

1) merchandising which is buying and selling of goods andservices for a profit. This includes the planning, pricing, and

control of sales and inventory; 2) publicity, which is concerned with promotion and advertising,

display, special events, and public relations;

3) store ( operations) management, which involves theoperations of the retail store, selling, customer service, and allsuch physical concerns for the store as maintenance andsecurity

4) accounting and control (finance), which is concerned with allthe financial aspects of the business, including credit, collection,budgets, control, and bookkeeping.

Some retailers may also have a fifth divisionalarea to account for and handle their branchstores

Others may be organized according to regionsand/or divisions

All retailers, however, must have at least twofunctional areas merchandising and storeoperations management-to run the business

Niche is a term used to describe a narrowly

defined customer segment

› Because niches have very specific needs, nicheretailers offer deep assortments of one particular type of merchandise

› A company could also serve a niche by defining itsmarket in narrow geographic terms; that is, a retailer might serve only one small neighborhood, meeting many of its needs.

Negotiation can result in a settlement and mutualagreement between two or more parties on anymatter.

› This settlement is based on communication and

the satisfaction of a goal of one or more of theparties

From a retailer's or manufacturer's perspective,negotiations are often undertaken to solveproblems, resolve conflicts, reduce costs,and/or improve profit.

Merchandising

› Often refers to the way in which goods aredisplayed in a retail store, to make them morevisually enticing to customers, with the intention

of increasing sales

› Merchandising includes careful selection of theassortment of goods, and determining which goods will be sold in close proximity to oneanother

Offshore assembly – Assembling garments in

one country from components cut in another

Planogram – A visual plan of a section of theretail floor, or a section of a retail sales shelf,indicating precisely where each unit of merchandise will be displayed

Point of purchase (POP) display – ›

a merchandise display located where customerspurchase store merchandise, strategicallyplaced to encourage customers to make last – minute impulse purchases of additional or high –

profit products

› Sourcing – Searching around the world for the

available suppliers / goods that meet acommercial buyer‟s criteria.

Strategic alliance – A partnership between

two or more noncompeting companies for thepurposes of creating a synergistic or mutuallybeneficial business relationship that either partner would be unable to create as efficientlyon its own

Supply chain – The logistics activities that,when linked together, provide for theproduction and delivery of goods from rawmaterial to finished product, to retail outlet

Universal Product Code (UPC)

› A graphic code comprised of a uniquecombination of black and white bars of varying

widths, that when scanned by a computerizedbar code reader, identify the product and keyinformation such as product specifications andprice

› Also referred to as a Bar Code .

Vertical integration –

Linking the successive manufacturing processes from raw materials supply throughfinished product in a long - term business

relationship, generally within one company.

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